Multi-location, multi-currency cash management for Shared services-Bridge the gap between TMS/ERP and spreadsheets!

administering cross border cash operations

Running a multi-location, multi-currency cash management for shared services can be a daunting task for any treasury or finance team. Is there a simple solution?

Multi-location and multi-currency shared service has numerous challenges, and cash management is certainly one of these.

One of which is assuming that different locations have similar banking or operating procedures as the traditional head office. This can lead to tensions and miscommunication between teams and endless back and forth messages and emails.

In the case of cash management, some organizations utilize TMS and related solutions to co-ordinate cash forecasting and cash allocation/ investments. Where certain global banking opportunities are available and country regulations permit, organizations can take advantage of cash pooling (whether physical, notional or multi-currency)

Based on a real-world example:

A global multinational in the media industry with operations in North America, Europe and Africa and Apac ran a centralized/decentralized treasury from Singapore.

Each country has its own finance operation and each country had its own nomenclature and regulations around cash (for example, in Singapore, a term deposit is called a Fixed Deposit, whereas in the USA, it would be called a CD). Each country would be accountable for their cash management and forecast, and each day this was collated. The result was each operating entity would submit a daily update on cash position and request approval how to invest any surplus cash.

Whilst some countries were adept at the process, many of the operations would not update regularly resulting in millions of dollars sitting idle in a zero-interest transaction account. The nature of the business meant that cash flows were often in tens of millions in USD, and when placed in zero yield accounts, cost the organization millions annually.

Moreover, the treasury team did not know what their counterparty exposures and limits were.

By deploying Likwidity, each country and operation would now be able to have insight and have automated price discovery and automation and the centralized treasury team would have visibility and evidence that each country and team was efficiently and optimally deploying surplus cash.

Simpler. Better. Faster. Profitable

But what about the situations where no TMS/ ERP is used, and each location operates with a hybrid centralized/ decentralized environment.

That is where a tool like Likwidity can bridge the gap between a full-blown TMS, ERP and spreadsheet. It can deliver a range of solutions that meshes head office with the business units: These include:

• Embedding policies and risk measurement

• Suitable for multi-currency/ multi-bank deployment

• Easy to use for non-treasury staff

• Can be deployed in a white label configuration

• Ensures appropriate and auditable cash investment process with multiple quotes and achieving best yield

• Visibility and automated reporting

All of this results in:

Key Benefits for Shared Services:

• Cost Reduction: Lower transaction costs and optimized interest.

• Efficiency Gains: Automation reduces manual errors and processing time.

• Risk Mitigation: Fraud prevention and compliance adherence.

• Improved Liquidity: Better cash visibility leads to smarter investment decisions.

Implementation Considerations:

• Global vs. Regional Needs: Solutions should align with jurisdictional regulations

• Scalability: Cloud-based solutions allow for growth and M&A flexibility.

• Stakeholder Alignment: Ensure buy-in from finance, treasury, and IT teams.