Proving the value of a SAP S/4 HANA project is clear if you focus on Finance, and more importantly Treasury. Learn from the experts in SAP Treasury, Bramasol, how you can save money on banking fees, lower compensating balances, higher yields on cash and lower borrowing rates by focusing your S/4HANA project on Treasury.
Are you grappling with the challenges of moving to S/4HANA? Everyone in the SAP ecosystem knows that S/4 is coming but many companies are struggling to figure out where and how to get started - often resulting in "analysis paralysis".
In-House Cash Management Reduces External Bank Accounts, Improves Visibility and Boosts Productivity
All companies need to carefully manage their cash in order to ensure that sufficient funds are always available to support business operations, however, in today’s global enterprises, it can be difficult to maintain clear visibility and management of diverse cash repositories. This can be especially challenging when subsidiaries and other operating units maintain separate external banking relationships within their regional or local environments.
I’ve previously touched on related issues in blog posts on Working Capital Management and the need for a Global Approach to Cash Management. In this post, we are going to take a closer look at another key tool which is called In-House Cash Management.
If you are a CFO or treasury executive in a globally diverse company, then you're probably already aware of the complexities regarding cash management across multiple business units in many different countries.
Working capital is the lifeblood of most organizations and, as such, it needs to be watched closely and managed in a comprehensive, real-time, and proactive manner.
All finance departments must manage working capital to keep their business operations running, while maintaining the agility to support the strategic goals and growth objectives of their business. Working capital management and optimization are key to assuring a business can maintain production, cover the cost of wages and supplies – and also have enough liquidity on hand to service their short-term credit obligations.
Any gaps are likely to be filled by external capital – usually at a higher cost than internally available funding. Being able to accurately measure and manage working capital, and avoid expensive external financing, can provide companies with an important competitive advantage.
Most CFOs use working capital as a key indicator of the operating health of the business. They focus on questions such as: Are we collecting our bills in a timely manner? Are we taking all the discounts that we are entitled to? Are we carrying too much inventory in our warehouses?
These basic metrics all have a direct impact on liquidity. However, the answers to these key working capital questions are inherently dynamic and constantly changing.
Choosing Treasury Solutions for Sustained Success: Understanding the Trade-offs of Standalone vs Integrated Approaches
Treasury functions are not easily isolated from the rest of operational applications that are typically spread throughout an organization – nor should they be. In fact, almost all treasury processes can benefit greatly from becoming more integrated with other business processes.
However, all too often, companies are enticed by the promises of standalone treasury and risk management applications that claim to be inter-operable but fall short of providing true seamless integration with core ERP business and finance applications.
The strategic importance of treasury has been increasing steadily in recent years, thereby leading to a proliferation of new capabilities from both standalone application vendors and broad-based ERP/finance systems providers.
Companies are also coming under more pressure from shareholders and regulators to increase their transparency and improve financial performance. These expectations are leading to significant changes to the treasury functions as activities are increasingly being centralized.
At the same time, most companies are experiencing more complexity with regard to changing compliance requirements, diverse global operations, regional and local regulatory mandates, international trade and foreign currency issues, geographically diverse banking relationships and escalating risk factors in the financial arena.
So, the key question that now arises is “what is the best approach for both today and for tomorrow?”
Two Fortune 500 companies recently reported saving between 5 and 10 percent on inventory carrying costs while others gained millions in cash flow from a focus collections and payables.
The latest Association for Financial Professionals® (AFP) 2019 AFP Risk Survey - The Evolving Treasury Ecosystem, examines the challenges that companies are facing regarding their treasury operations, with an emphasis on how they are looking to leverage new technologies.
A IFRS 9 Financial Instruments is the IASB’s replacement of IAS 39 Financial Instruments: Recognition and Measurement. The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.