BankingTreasury Management

Finding a Remedy for Bank Account Pain: Centers of Excellence

By May 25, 2023No Comments

The benefits of one member’s journey to a center of excellence as it manages rapid growth in revenue and bank accounts.

Across roughly a decade, one NeuGroup member company tripled its revenue, partly through heavy M&A activity. But the core, global corporate treasury team remained at about 40 people—loading some of them with extra work, very little of it being the strategic initiatives today’s modern finance orgs want to focus on.

  • As acquisitions and bank accounts started to stack up, the treasury team needed help, and by pushing out manual and repetitive tasks to employees at a center of excellence (COE) in India, it has been able to adapt to the company’s fast-moving growth without expanding the size of the internal team.
  • An associate director of treasury and an assistant treasurer presented on the company’s COE journey at recent meetings of NeuGroup for Global Cash and Banking, sponsored by ION, and NeuGroup for European Treasury, sponsored by TIS, highlighting the project’s objectives, obstacles and outcomes.
  • “We need more insightful people on the treasury team. Not more staff to do the bread and butter, but more people with insight,” said the assistant treasurer. “We can’t add value if senior managers are looking at SAP every day and doing password resets.”

The problem. The company had been on what the associate director called a buying spree, acquiring a company a week at some points. “Guess what? That is a giant headache,” he said.

  • As the acquired companies added more bank accounts to manage and track, the existing business also continued to grow. What had been a consistent 300 or so “local” bank accounts rose close to 1,000 because of all the M&A accounts treasury swept up. These are accounts that by nature are not on systems or part of standard processes, posing the greatest risk to the company.
  • “The leadership realized that the size of the balances and number of accounts was big enough to cause some concerns and needed greater oversight. With possibly hundreds of millions sitting in accounts and a lack of visibility, it was a big concern,” he said.

First step: goals. The end-state desired by treasury was to continue managing the activities of the company’s six main banking partners, with four key objectives for the bank activities managed by the COE in India:

  1. Implementing state-of-the-art technology to facilitate bank account management, payments, bank connectivity and balance reporting on M&A accounts.
  2. Ability for the COE to make urgent, manual payments to reduce dependency on online portals.
  3. 100% real-time visibility to acquired accounts globally.
  4. Managing bank signers by improving the process to track and review signers.

Simplifying signers. One of the project’s most critical aspects was implementing a bank account management (BAM) system to address visibility and signer management issues.

  • Before the project, treasury had a master Excel sheet, updated monthly, to track signers for all accounts. Sometimes, an employee gone for weeks might still be reflected as a signer on the sheet.
  • The COE transitioned to using TIS to track global bank accounts and signers, centralizing and streamlining these processes. The tool has been linked to Workday, which manages employee information, enabling real-time updates on employee status and facilitating better planning for account closures and activity transitions.
  • Treasury and the COE also developed service level agreements to ensure defined timelines and accuracy. A collaborative approach to managing access rights and approvals across various banking platforms ensures efficient control and accountability.

TIS to centralize payments. TIS is also going to help alleviate the reliance on online bank portals, consolidating payment functionality, allowing central connectivity, controls and reporting.

  • The COE also adopted ServiceNow, which has integrations into TIS, as a workflow tool for general requests and payment requests.

Real-time visibility. Before this project, treasury was manually collecting month-end bank statements to view balances. The COE now collects daily statements, with daily reporting for accounts that consolidates the data in a central hub.

  • Through the improved visibility, the associate director said treasury gained better control over cash and could plan ahead for month-end and quarter-end activities, as well as reduce any potential fraud risks.

Of course, like every big project, there were bumps along the way. They included technology delays, people turnover and budget considerations. It’s still a work in progress, but as the COE matures, treasury continues to see benefits to using teams in low-cost locations.

  • “If your expectations are clear, if you are hesitant but hopeful, in the end, it’s worth it. Otherwise, I don’t know how we’d be able to manage all of the accounts,” the associate director said.
Justin Jones

Author Justin Jones

More posts by Justin Jones