The goal of any treasurer is to effectively gérer les flux de trésorerie and ensure funding is available when required to steer the organisation towards sustainable growth.
Funding typically relies on the utilisation of numerous credit facilities and, where this is the case, the cost of credit becomes a key driver in treasury operations.
Depending on the sector the business operates within, there are a number of strategies that can be employed to manage this cost, as well as more generic strategies regardless of industry.
All too common, however, is the fact that businesses of varying scales blindly accept bank charges as an inevitability of banking operations.
With increased cash visibility, these charges are often revealed to be unnecessary and avoidable.
Changing Banking Operations are Here
Viewed in isolation – an overdraft charge here, a late loan repayment fee there – the small costs seemingly synonymous with banking operations may seem like no big deal.
However, where these are commonplace throughout the financial year, and when the aggregated cost of them over this time is finally calculated, the term ‘no big deal’ can suddenly feel like a gross understatement.
The inability to view the movement of cash in real-time – and within one user-friendly interface – has meant that financial management in offices all around the world has been reduced to time-consuming workarounds, labour-intensive spreadsheet scrutiny, and blatant guesswork.
Times, though, are changing.
While innovations in financial technology (fintech) have traditionally focused on individual consumers, both start-ups and established brands are beginning to turn their attention to the world of business and commerce.
Just think, we can all check our bank accounts in seconds with a speedy scan of our thumb prints; unthinkable even a decade ago.
You’ve likely encountered brands such as Monzo, too – but disruptive alternatives to the rigmarole of corporate banking have been comparatively glacial in taking off.
The objective of innovations in banking operations is largely two-fold: make processes easier and make bottom lines look better.
Sounds simple, right? That’s because it is. But up until now, corporates have been so starved of effective banking simplification options that a simple call-to-action has been enough to turn the heads of many business leaders.
Turning Heads with Increased Cash Visibility
Il n'a pas fallu longtemps pour que l'équipe d'AccessPay Solution de gestion de trésorerie to catch the attention of corporates, no matter the sector.
One such company – a world leader in its sector – is a manufacturing company and subsidiary of a multi-national firm.
The nature of their business necessitated heavy reliance on inter-company lending and debt financing. Utilising the services of several transaction banks, an ongoing requirement was to ensure the conditions of terms were being met to avoid fees and penalties.
Unsurprisingly, the treasury team slipped into a cycle of concentrating energies into meeting criteria which would avoid, or at least reduce, the build-up of these fees and penalties.
Time dedicated to the more proactive and productive pursuit of discovering more cost-effective ways of financing their operations was proving difficult to find.
Après avoir exploré le potentiel que représente la possibilité de visualiser plusieurs banques dans plusieurs régions, l'entreprise a rapidement intégré la plateforme dans son système de gestion de l'information. ERP, TMS et infrastructure de back-office. Ils n'ont pas tardé à identifier le coût des transactions avec leurs banques de transaction.
De plus, leur nouvelle capacité à visualiser plusieurs comptes bancaires en temps réel leur a permis d'identifier qu'en déplaçant des fonds entre deux banques avant la fermeture des bureaux, ils ont pu couvrir partiellement les positions de découvert en utilisant des fonds disponibles d'environ 15 millions de livres, plutôt que de dépendre des facilités de crédit renouvelables ou de laisser des comptes à découvert.
The effect was that they were able to significantly reduce the overdraft charges on their accounts, which in turn led to savings of between £150k-250k per year.
The multi-bank cash visibility solution not only provided a clear, single-point view of funds across the globe, but it provided insights into charges which had previously been neglected. Equipped with this new knowledge, the company had enabled themselves to make informed decisions which helped achieve significant cost savings to the business.
The Time to Bring Banking Costs Down is Now
For far too long, organisations of all types have had to ruefully accept that bank fees and charges are part and parcel of monthly operations.
The reality is, though, that this doesn’t have to be the case.
For the company in the example above, the fees they thought normal amounted to a figure approaching a nail-biting quarter of a million pounds over the year.
Through the increased cash visibility granted by AccessPay’s Cash Management solution, they quickly realised the inefficiency of their processes, and were able to see, control, and optimise their cash.
The money saved through the transparency of our service could go a long way to advancing any business in all kinds of different ways.
Most notably, increased cash visibility allows for increased strategy in banking operations. With drastically reduced fees and company-wide liquidity, those in senior finance and treasury roles can reap the rewards of the elements of their job that too-often get left by the wayside.
Investments, forecasting that is data-driven rather than ‘guesstimation’, greater collaboration between various subsidiaries – all becomes possible, and holds the potential to unlock millions in working capital.
It’s this that is the beauty of real-time, multi-bank cash visibility.
Yes, it makes the job of treasurers considerably easier and allows them to use their time more productively, but it’s the generous returns it can deliver that makes it a solution too compelling to ignore.
We live in uncertain economic times, which only adds fuel to the existing inferno that is the contemporary hyper-competitive marketplace.
Costs such as unnecessary bank charges, from which zero value is derived, can become the difference between an organisation running comfortably or regarding the future with a sense of stomach-clenching unease.
And with the potential increase in cost of doing business in the UK following Brexit – such as having VAT charged upfront and higher credit card charges – it’s imperative for corporate and enterprise organisations to save now, so they aren’t stung later.
If you’d like to join the business mentioned here in uncovering working capital and modernising your banking operations with our cash management solution, get in touch today.