In one of my previous blogs, I had spoken about how Treasury departments are being forced to position themselves as internal service departments that add value to the broader organization rather than existing as black boxes within Finance to perform a set of specialized functions in relative isolation!
Background of the organization
In this blog, I will talk about how we recently helped the treasury department of a corporate client to better collaborate with and service the regional finance teams.
Some quick facts to give perspective before we dive into the solution:
- The company had a strong global presence and various local subsidiaries were importing goods for which Letters of Credit, SBLC and Bank Guarantees frequently needed to be issued
- The process of managing these instruments was run locally by regional finance teams, but these were against delegation of a master limit that was centrally managed by treasury
- They were a highly leveraged company because of which Treasury kept a tight control on all credit instruments to ensure compliance with debt covenants
- The local finance teams were often complaining that treasury’s involvement in the process was acting as a bottleneck and making the process inefficient – adversely impacting procurement and production cycles!
- Treasury did not have an effective way of keeping track of updated statuses of these instruments – number and $ value of outstanding instruments, amounts drawn under active L/C, etc. This also posed a challenge in validating charges associated with these instruments as these were paid centrally from the treasury budget
- The controllership team did not have a “single source of truth” for disclosure of such instruments in the disclosures for contingent liabilities.
- The SOX auditors also expressed concerns around proper transparency in the process – since there wasn’t a seamless trail to link each individual instrument to the underlying approvals and the associated documentation.
The Solution – “I Need It”
To provide a solution for the client, we used our integrated business process management platform “I Need It”. Let’s briefly speak about the various integrated functionalities of the platform and how they were used in this situation.
The first (and the most critical!) step was to design a streamlined and efficient workflow to be used to manage the requisition, approval and execution processes. A quick look at some of the value added features that the I Need It workflow functionality offers.
- Collaborative design – we worked closely with various functional stakeholders in the process to design the structure and flow for the workflow as well as the data elements to be incorporated. Internal policies, guidelines on roles and responsibilities, approval matrices are also incorporated within the
- Smart forms – intuitive and interactive input screens that ensure a simple and delightful user experience while ensuring and enforcing completeness and quality of input data and documents. Some of the key components include conditional logic and data validation.
- SSO enablement – access to the workflows (and platform) was integrated with the standard Single Sign On platform being used by the client.
- Audit Trail – each workflow is backed by a detailed log of every action along the way – which can be traced all the way to the associated records and document sets
- Inbuilt communication channels – providing an efficient and trackable platform for stakeholders to seek information and/or provide updates amongst each other
- Alerts and notifications – programmable alerts and notifications to alert relevant users on new workflows, action updates, overdue workflows, etc.
The I Need It platform comes with an integrated reporting solution that provides visibility into various components related to the underlying processes.
- Our client was able to run various reports around L/C, SBLC and Bank Guarantees – list of all outstanding instruments at any point of time (grouped by region, currency, bank, etc.), periodic activity metrics – # of L/C, BG issued by quarter, etc. These reports can be customized to serve different groups – treasury, controllership, technical accounting, internal audit, etc.
- The reporting database also provides reports highlighting performance metrics for the underlying processes – average lead time for treasury approvals, end to end cycle time metrics, etc.
As a side note, if needed, our solution can also run more advanced reports, like performing quarter end marked to market valuations for these instruments using market data feeds – we had proposed this to our client in this case but this wasn’t a requirement for them!
Integrated document management system
The solution also offers a fully integrated document library that stores various documents collected and generated within the underlying processes – and each document can be linked back to the original workflow(s). Documents are well catalogued using relevant tags making it easy to search and retrieve documents as and when needed.
The I Need It solution also comes with a bunch of collaboration tools – couple of items that we implemented for our client:
- At the end of the month, local finance managers were required to provide a confirmation on outstanding L/C, B/G, SBLC as well as provide updates on utilized/unutilized portion of their open L/C. This was accomplished by creating a submission form – this form pulled data directly from the Reporting database to display the relevant records that local finance managers would use to confirm and update details – these submissions are automatically associated with the original records that are updated.
- Treasury is also using the platform to collect feedback from the local finance team, so they can better serve the needs of their internal customers and track/improve their processes. This is done via a feedback form provided to applicants and functional approvers at the end of each workflow where users rate their satisfaction levels on a scale of 1 to 5 – in addition once a year a survey is sent to all finance leads seeking inputs and suggestions to improve the process. Outputs from these feedback tools are meaningfully analyzed and presented by the reporting module.
Smart and intuitive Front End and Mobile access
The various functionalities of the platform – workflows, approvals, reports, documents - are accessible from an easy to use standardized front end. The idea is to have a central place from where all the processes and functionalities can be accessed – convenience, transparency and a delightful user experience. In addition, this front end also acts as a Treasury portal where everyone comes for all their Treasury needs – and also a bulletin board where Treasury can publish updates or resources like currency rate charts, interest rate charts for business users to access and download!
Last, but not the least by any means – all of these features and processes can be accessed via a custom built mobile app that is extremely user friendly and as secure as using any desktop device.
Medullus Geek Speak
- Windows Active Directory was the Identity Service Provider (IdP) and SAML 2.0 was used as security token for the SSO portion
- This solution is designed on Microsoft stack using MVC design pattern and SQL database – the entire solution was hosted on the Amazon cloud (AWS)
- All interactions with the database was via WebAPI which we exposed for other applications for integration purposes
- Currently we are working on some AI algorithms to reduce the wait times (see how we leveraged AI for our LeanCash™ forecasting solution)
- Agile development with DevOps (CICD) rubbed on it is enabling us to deliver smaller changes quickly in production – this enabled the client to get a best ROI.
iNeedIt – a LeanCash™ solution for workflow management
iNeedIT™ is highly scalable and customizable
Even though the solution addressed in this blog refers to a specific implementation we did for a client around their L/C, B/G, SBLC, the I Need It platform is extremely flexible and scalable to be able to handle a host of other internal and external processes and collaboration protocols – using all the above mentioned features.
To list out a few other use cases we have implemented for other clients:
- Bank account administration processes and records maintenance – please see my blog Integrated Bank Admin solutions
- Cross functional processes include funding requests from business units, FX trade requests, dividends and capital contributions requiring treasury and tax approvals, etc.
- Internal treasury processes such as payment approvals, FX trade approvals that are often handled via signed paper forms
- External collaboration processes with parties like banks that are standard and repeatable in nature ex. Payment queries, details on unidentified transactions
Medullus LeanCash™ is a tried-and-tested solution that draws upon lean concepts to streamline Corporate Treasury by eliminating waste in processes and functions which helps to manage liquidity and risks in the most optimal way.
Our products and services are geared towards making improvements in Treasury & Finance processes to bring big gains with minimal impact. The low hanging fruit is sometimes difficult to find in a large organization with myriad of processes and systems. Take the 1st step in identifying these high value/low risk improvements – get your LeanCash score, benchmark against other organizations that have obtained their score and improved them. It does not cost anything to find out where you are as compared to industry-best-practices!
Blog post by: Tejnain Singh. Reach Tej @ email@example.com
Tej is a seasoned treasury and finance professional with over 17 years of extensive experience across organizations like GE, Deloitte, SABIC and Valeant Pharma. He has held senior positions in treasury operations and cash management and has led multiple strategic initiatives in the areas of payment automation, treasury system implementations, business process simplification and shared financial services among many others. Tej is a Chartered Accountant from India.