At the heart of your company lies a massive data collection enterprise run by the central treasury. At work pulling together the finances of every subsidiary and every office, the treasury is charged with creating and maintaining strategies to ensure uninterrupted cash flow within your organisation – an absolutely critical role. Yet, on average, only one in four hours of the day is spent on these tasks.

A Gartner report from the mid-2000s once stated that 75 percent of the treasury’s time is spent on data collection – highly paid, highly skilled individuals are spending their time collecting data instead of managing it. How can your treasurer play a role on a strategic level within the company if their time is consumed in data collection? This leaves the central treasury with limited options for strategic
planning and analysis.

But this is a problem for more than just the central treasury: for many subsidiaries, day-to-day operations include spending large volumes of time building reports to pass to central treasury, which the treasury then processes and uses in its own analysis. This process is fraught with difficulties: subsidiaries often have no interest in producing such reports, which take time away from their everyday tasks; disinterested work makes for erroneous reports that require verification and correction by central treasury; and reports end up filled with what subsidiaries think the central treasury wants to hear. Essentially, the process is a burden for subsidiaries – it does not benefit them, so they spend only as much time as they need to on doing it.

Systems and control
The solution to this problem almost seems trivial, such is its simplicity: create a centralised platform, available to every subsidiary, which helps them perform their day-to-day tasks. Once that is available, the treasury can pull the information directly into its own work, with no need for intense reporting. With this in mind, it is funny to think that the alternative solution the IT sector came up with was to have treasury workstations.

These complex, central systems were supposed to provide solutions for treasury management, but instead provided minimally better ways to calculate the same data. They were installed locally, often at a high cost, and user access was limited, leaving treasurers to take reports from their subsidiaries and plug them into these computers – sometimes manually. In essence, treasury workstations were meant to increase productivity, but they were not designed with consideration of the laboriousness of collecting data from subsidiaries.

Since these workstations were not also available to subsidiaries, they often were not able to produce compatible documents – or if they could (for instance, if the workstation could import comma-separated values) the process of ensuring compatible formatting could be almost as much work as entering the data manually. So instead, many treasury departments just stuck with Microsoft Excel; it was much cheaper, easier and (in some cases) better.

In 2000, BELLIN launched the first web-based treasury management system, followed by the first software-as-a-service (SaaS) system for treasury management – a logical progression. We figured that if we could make the tools useful to the subsidiaries – not just the central treasury – then they would have an active interest in doing things right. In this scenario, subsidiaries are not reporting – they are using a purpose-made tool. The data they input is available to the central treasury whenever it is needed, not just as a report once a month. Since it is not a report made by an unwilling subsidiary, there is less worry about erroneous reporting and fewer back-and-forth communications – just higher quality data. This leads to happier subsidiaries, because they waste far less time doing reports. Meanwhile,the treasury is getting more accurate data, because it is relying on the actual usage data of each subsidiary. Everyone wins.

We thought this would be the model that all treasury management systems would use, especially after they all switched to SaaS. But then SaaS providers started doing unexpected things, including charging per user or per action through the system. This perplexed us. If your treasury management system is supposed to give the customer global visibility, surely you should have every relevant user and every transaction going through the system. Why would you inhibit that by putting an economic disincentive in the way of doing so – especially if adding another user costs the provider nothing?

Subsidiary involvement
If the goal is to have everyone working from within the system, then you need to have solutions that appeal to subsidiaries. It’s not enough to just provide a tool and tell them to use it; you need to build in functions that improve their day-to-day lives. An obvious one for us was payments.

The account statement really is the starting point for everyday cash management. This makes payments a natural next step, if you want to reduce the time spent on data collection. Yet, if you were to go back even just 10 years, no corporation would even think about payments in a treasury system. They would probably not even expect it would be feasible.

So, we built a payment system, first for UBS, then for Austrian banks. Initially, German banks did not want to work with it, as they were afraid of the control it took away from them, but eventually pressure from customers turned them too. Now, for many companies, this means a single interface that manages signing for payments across the entire set of banks the corporate group uses – a nice bonus for anyone who knows the pain of logging in to multiple banking systems – and, at the very least, it means you do not have to provide another report. All of that payment data goes through the system, which means the central treasurer has visibility over all account balances daily, instead of from a set of monthly reports.

The other effect of this is the central treasury now has the ability to monitor for fraud. If cash is drained out of the company for fraudulent purposes, from even the smallest subsidiary around the world, the treasury can detect it. The central treasury now has visibility and control over all of the signatures for every payment across the world. The treasurer’s role, therefore, becomes more important within the company, as they are responsible for ensuring no cash leaves the organisation without proper control.

This is why we invested so much into working with SWIFT. The option to connect to SWIFT leaves us with the ability to connect to hundreds more banks, without the need for expensive infrastructure. BELLIN is hoping to soon celebrate its 100th customer on SWIFT – which, as far as we know, makes us the largest SWIFT connector in the world.

With SWIFT payments included, we now also have the capability to tackle more than just payments and account statements, and we have spent a lot of time considering how we can leverage this connection to transmit other types of bank communication. SWIFT lets you sign trade financing options such as guarantees and letters of credit – these can be transmitted the same way, with the same authorisation principles, using the same technology.

Again, this creates opportunities for the subsidiary and reduces the reporting requirements of the central treasury. The treasury must keep track of subsidiaries’ obligations, in order to ensure they have the available liquidity to fulfil them. Manually collecting these raises all the same problems as with any other data source. However, if executed from within the system, there is no need to report. Instead, everything is recorded in one central place: the treasury platform.

Outside assistance
Managing the process of data maintenance is a big first step for a treasury department, but, as we soon noticed, it was not really sufficient as an end goal for us. Treasurers want data, but they also want analysis, and that is a really big job. This led us to start looking at business process outsourcing.

Today, BELLIN is looking beyond just data collection, towards other options for improving the overall workflow of the corporate group. We started noticing it was not just companies that were increasingly trying to become leaner and more agile – it was treasuries too. While niche firms specialising in business process outsourcing have popped up in nearly every sector, little has occurred in the
treasury market.

One thing we do see with some frequency, usually in larger companies, is the effort to set up shared service centres in low-cost locations, intended only for a single corporate group. By doing this, companies shift the less strategic labour and day-to-day tasks from key central roles to offices in regions with low operating costs, such as India. This leaves the central treasury in a good place. With the excess work off their plates, they are available for strategic treasury management, giving their departments a big boost in terms of ability to deal with complex problems.

However, even for larger enterprises, such projects can be difficult. Not only do they require expensive, drawn-out processes, they often create scenarios in which subsidiary managers are left with hard choices about restructuring key offices. This creates difficult political situations for treasurers to manage. For small and medium-sized enterprises that fear large projects, it is nearly impossible. They do not have the staff to manage such service centres, or the money to invest up-front in systems to enable them. They are often scared off by the idea of large-scale IT projects alone.

Service provision
We recognised early on that SaaS was something small and medium-sized enterprises loved, and this led us to wonder whether we could produce something similar for treasuries. What would happen if we combined our knowledge and technology, and offered it as a service? We are treasurers, after all, and have the knowledge, the processes and practices to take over aspects of a treasury. We also create and manage the treasury management system.

So, we developed the concept of Treasury as a Service (TaaS), which allows for the outsourcing of specific or custom treasury tasks, reducing the workload of the treasury team. It is not handled by a low-paid team, but by treasury specialists in Europe. We set a company up with the software, produce reports, and enable the kind of optimised treasury management many companies are afraid to even begin planning.

The other great thing about TaaS is that it is tailored to the needs of your organisation. This is not a shared service centre in India absorbing the roles of local treasurers, but a tool for strategically freeing up specific roles to focus on strategic tasks.

Put all this together and you are really changing the day-to-day time spend of the treasurer; you are reducing the data collection workload by having everything in a central platform. With TaaS, you get everything available at a glance on your mobile phone, with reduced day-to-day effort from the treasury. But, more importantly, you are putting the treasurer, not to mention the CFO, in a role in which they are controlling processes and producing strategy. And, let’s face it, this is really why you hired them – not so they could gather reports.

Improving the time spend of the central treasury really takes a lot more than just providing a new computer system; it is about improving the working relationship between subsidiaries and the parent company.

You do this by providing subsidiaries, not just the central treasury, with tools that make their lives easier and reduce their workload. By doing so, you reduce the time spent in data gathering, you improve the quality of data, and you improve the happiness of all parties involved.

In German, subsidiaries are called Tochtergesellschaft, which literally translates as ‘daughter companies’. I like this word, because subsidiaries are a lot like daughters; they do not always listen to you, and they do not always behave, but regardless of what they do you always want to see them smile. The relationship between the central treasury and subsidiaries should be thought of the same way – you should find ways to make them happy, because when they are happy, you are going to be happier too.