In the previous issue of GAC Chat, we outlined the moves being made to bring our Treasury operations into the 21st century. Well, The TMS (Treasury Management System) has arrived along with an intensely dedicated project team. The team is fired up and ‘on mission’ to upgrade and optimise our cash management across the Group.
Alfred Dicdican – Treasury Assistant. Supports the project with data gathering & cleansing, scoping files, administration and much more.
Raquel Auddy, PA to Magnus Sjogren, plays a vital role in coordinating the team members.
Chris van Dijl – External Treasury Consultant from Dubai-based treasury & risk management consultancy Cugavadi. Chris brings to his role as project manager vast experience including TMS implementation for other organisations.
Group Treasurer Magnus Sjogren, who acts as the Business Owner for the project.
Pradeep Kumar V.P. – IT Project Coordinator in the implementation phase. Coordinates the IT resources, integration and technical handover to IT support and operations team.
After a thorough selection process, the task was assigned to Cashforce, headquartered in Belgium. Established in 2012, Cashforce offers a next-generation platform which gives users an interface and dashboards for flexible reporting. It has initially targeted cash-flow forecasting, cash management and working capital management, with a focus on automation and integration. Core functionality for day-to-day treasury operations such as in-house banking and FX deal management has also been developed.
Helena Lemon, Group IT Technology Business Manager – Management Information, played a key role coordinating Group IT’s involvement in the selection of the vendor for the project. She is now focusing on improving Group data and reporting.
payments per month
of which are inter-company payments
Cash visibility: Whether you are a warehouse manager, ship spares manager or the Group Treasurer, you need to know how much cash you’ve got in the bank. During the remainder of 2018, cash visibility will be the main focus of the TMS Task Force.
Cash-flow forecasting: Forecasting just two weeks ahead can be a challenge, so imagine how hard looking twelve months into the future can be. There is no such thing as 100% forecasting accuracy, but better system support can take us to the next level. Group cash-flow reporting will move away from Excel spread sheets and be consolidated in Cashforce’s intelligent simulation module. It’s a system that allows users to test their assumptions about the future and evaluate different scenarios.
Treasury Centre (TC): A Treasury Centre is a financial entity in the Group that acts as a central bank serving the other Group entities, enabling such services as virtual bank accounts where laws and regulations permit. Debit and credit interest can be automatically applied, just as with external bank accounts.
The aim is more efficient use of Group and company cash and automated cash management where possible, rather than taking on more bank financing. The TC will increase focus on the savings to be made on bank fees and foreign exchange deals.
Central database: The TMS can track things like:
Foreign exchange transactions
Money market transactions
The future is about being smarter in the way we handle our cash. The TMS Task Force has the job of leading us into this new way of handling our money and helping us get the most of the new suite of analytical tools that TMS brings with it.
GAC doesn’t have a dedicated software application to support its treasury activities and has relied instead on MS Excel, Dolphin and other sources. Efficient management of cash and working capital is crucial to any business. After all, the Group has 100+ banks and 730 bank accounts processing more than 300,000 payments a year, be it electronically or by cheque. You need an effective system to deal with that kind of volume.
The process started with a survey that all GAC entities took part in, reporting the number of payments, FX volumes, bank fees and so on. Meantime an “as is” and “to be” assessment of the operating treasury model was made, also seeking input from various stakeholders. Seven vendors competed for the job and were subject to an extensive selection process.
The chosen company, and its software, is called Cashforce (www.cashforce.com). It is a relatively new player based in Belgium. Key deciding factors were the strong cash-flow forecasting and working capital management modules, both very crucial areas to GAC. As well, Cashforce is strong in the provision of core treasury functionalities such as in-house banking, FX exposure and deal management.
Not all modules are in scope and some will initially be implemented only at GAC HQ level. Modules like working capital management will undergo a detailed “proof of concept” before global roll-out. The project will last several years and modules will be implemented in phases.
For any planning and decision-making, timely data and information are required. It is in everyone’s interest that GAC efficiently uses the cash it is holding for continued growth and investment, rather than leaving it idle or taking on more bank lending and paying fees and interest to the banks. Currently many companies have overdraft facilities with the bank that attract fees and interest. Is that necessary or can an overdraft limit be arranged via the Treasury Centre? The key point is to have money in the right place at the right time.
To make the flow of electronic bank statements and payments work, you need a strong bank connectivity partner that can act as a SWIFT service bureau. Fides is one of the largest and most experienced, with connections to 10,000+ banks and processing 160,000+ bank messages daily. They process a staggering USD 5.5 trillion in payments each year.
To mention some:
Change can be threatening and it’s true that many people just want things to stay the way they are. But we are now shifting to a world with stricter compliance rules and increasing transparency and openness when it comes to business. For these reasons, the TMS is a must for all GAC entities to be able to comply with internal reporting requirements and Group standards.
Yes. The initial target is:
You will get access to all Treasury and banking activities in your region. Cashforce will give you better insight and analysis capability covering:
We are just finishing the first scoping phase and will shortly begin implementation. Training will certainly be done for users and will be a combination of Webex and face-to-face training sessions.
Even more exciting stuff! To mention a few:
Yes, alongside a Steering Committee with people from both Group Finance and Group IT, the project organisation is as follows:
Magnus Sjogren, Group Treasurer
Chris van Dijl, External Consultant from Cugavadi
Pradeep Kumar V.P., Senior Project Manager,
IT Project Coordinator
Alfred Dicdican, Treasury Assistant
The project team liaises with reference groups such as Group Tax, Regional Controllers and local GAC offices as and when required.