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Cash management optimization Anastasia Medvedeva/Swissgenia
Vincent Manti/Mediterranean Shipping Company
June 18th , 2015
© 2015 SAP (Schweiz) AG. All rights reserved. 2
Agenda
Business requirements and key points
SAP environment
Cash pooling and Payment factory
Expectations and results
© 2015 SAP (Schweiz) AG. All rights reserved. 3
Privately owned shipping line, founded in 1970, nowadays the world’s second largest container shipping line.
Privately owned and managed by Chairman Captain Gianluigi Aponte, Diego Aponte as CEO/Alexa Aponte as VP
Finance. We offer global container services on a network of 200 trade routes, taking in 340 container ports.
MSC – a passion for Shipping
479 offices
45000 staff
162 countries
340 container
ports
440 container vessels
© 2015 SAP (Schweiz) AG. All rights reserved. 4
No visibility, delays, no trusty forecast
Lack control, no insight into process
The existent cash management process was…
Head Quarter Central bank
accounts
time
Incoming
payments
175
50
Outgoing
payments
When?
How much?
Why?
Who?
To whom?
How?
Agent
AR
Incoming
payments
150
200
AP
Outgoing payments
Cash
balance
55
20
Outgoing
payments
© 2015 SAP (Schweiz) AG. All rights reserved. 5
Cash pooling
Control over the process
The target cash management process was…
Head Quarter Central bank
accounts
time
Incoming
payments
175
50
Outgoing
payments
Cash pooling
solution to retrieve
cash on central bank
accounts
Agent 1
AR
Incoming
payments
150
100
Outgoing
payments
Cash
balance
80
20
Outgoing
payments
Cash balance
5
Reduce bank fees
Optimize cash
transfers
Increase visibility
Control cash flows
inside group
Agent 2
Agent 3
Incoming
payments
50
200
Outgoing
payments
© 2015 SAP (Schweiz) AG. All rights reserved. 6
SAP environment and implementation strategy (2012 -> 2016)
Decentralized accounting systems
Lack of real time information for management
120 countries
Automatization and optimization
SAP implementation Project
Focus on Financial part -> FI-CO
back bone and Payment factory,
Treasury solutions are following
Pilot release FI-CO 2013
Pilot release In-House Cash 2014
Roll-out 92 countries till 2016
© 2015 SAP (Schweiz) AG. All rights reserved. 7
MSC key points and business requirements for cash management
Centralizing cash on central bank accounts by putting in place cash pooling structure
Optimize group
cash flow and
reduce bank fees
at the same time
Make worldwide payments to vendors from the central bank accounts
USD
GBP
EUR
Minimize the costs of bank transfers by using “low-value” payment methods
SEPA
BACS
Cross-border
Cash management optimisation strategy
© 2015 SAP (Schweiz) AG. All rights reserved. 8
Business process steps
Agency Weekly Cash request
Prepare payment proposal
Check payment postings,
AP/AR clearing
Financial analysis
team
Validate weekly cash request
Check weekly IHC payment
report
Validate and group agencies
proposals
HQ Treasury
Check cash request to
provide money
Prepare payment file for the HQ Central
bank
Adjust cash request in case
if needed
Bank accountant
Interaction with the HQ Central
bank,
Rejection/return
Check weekly IHC payment
report
© 2015 SAP (Schweiz) AG. All rights reserved. 9
Payment factory and Payment release List:
implementation overview
Scope Pilot
3 Europe countries, including UK
Payment release list (Accounts Payables)
In House-Cash (Payment factory in HQ)
EBS for HQ central bank accounts
Payment advice forms to Agency vendors
SEPA (EUR)
Weekly budgets
Cash control&management reporting
Scope after Pilot
5 more Europe countries, USA center
Processing of returns/rejected payments
BACS (GBP)
Compliance management (USD)
© 2015 SAP (Schweiz) AG. All rights reserved. 10
Business process steps
Agency Weekly Cash request
Prepare payment proposal
Check payment postings,
AP/AR clearing
Financial analysis
team
Validate weekly cash request
Check weekly IHC payment
report
Validate and group agencies
proposals
HQ Treasury
Check cash request to
provide money
Prepare payment file for the HQ Central
bank
Adjust cash request in case
if needed
Bank accountant
Interaction with the HQ Central
bank,
Rejection/return
Check weekly IHC payment
report
© 2015 SAP (Schweiz) AG. All rights reserved. 11
SAP Cash and liquidity management
Cash management control report for Payment
factory
• History and archiving
• Cash position report
Weekly budget
Cash and liquidity management functionality
• Excel integration (SAP upload)
© 2015 SAP (Schweiz) AG. All rights reserved. 12
Business process steps
Agency Weekly Cash request
Prepare payment proposal
Check payment postings,
AP/AR clearing
Financial analysis
team
Validate weekly cash request
Check weekly IHC payment
report
Validate and group agencies
proposals
HQ Treasury
Check cash request to
provide money
Prepare payment file for the HQ Central
bank
Adjust cash request in case
if needed
Bank accountant
Interaction with the HQ Central
bank,
Rejection/return
Check weekly IHC payment
report
© 2015 SAP (Schweiz) AG. All rights reserved. 13
Preparing of payment proposal (Agency side)
Preparation of proposal on the Agency side (standard
F110 payment program)
Payment release list for each Agency and for Head
Quarters for final approval and Payment
• Multi-currency
• Multi-Company codes
• Payment Approval schema for Agency and HQ
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Payment release list main features
•Create a list / Change list attributes / Change the processor responsible / Close a list
Actions relevant for lists (header area only)
•Dynamic Selections (the system retains your selection criteria) / Assign and unassigned items to a list / Approve and Refuse items for payment / Reset the approval / Send items to Bank
Actions for processing items
•Display the approvers of an item / Display an item log
•Display the document line item / Display the payment document / Display the proposal log / Display the payment run
Actions for monitoring and navigation
© 2015 SAP (Schweiz) AG. All rights reserved. 15
Business process steps
Agency Weekly Cash request
Prepare payment proposal
Check payment postings,
AP/AR clearing
Financial analysis
team
Validate weekly cash request
Check weekly IHC payment
report
Validate and group agencies
proposals
HQ Treasury
Check cash request to
provide money
Prepare payment file for the HQ Central
bank
Adjust cash request in case
if needed
Bank accountant
Interaction with the HQ Central
bank,
Rejection/return
Check weekly IHC payment
report
© 2015 SAP (Schweiz) AG. All rights reserved. 16
In-House Cash (Payment Factory)
IHC EBS: Automatic Clearing
IHC payment Order monitor
© 2015 SAP (Schweiz) AG. All rights reserved. 17
Expectation and results: average number of Invoices paid monthly
Achieved results
• Cash pooling solution to retrieve cash on central bank accounts (One Bank, 8 countries)
• Reduce bank fees
• Visibility of planning
• Control cash flows inside group
• Standardization (SEPA (EUR), BACS)
17093 open items
(99%)
23
local
17070
IHC
47118 open items
(91%)
4240
42878 IHC
All 8 Europe countries
Germany (one of the Pilot countries)
© 2015 SAP (Schweiz) AG. All rights reserved. 18
Main benefits of the solution provided
Fast implementation
(from 12 weeks)
Easily built upon existent SAP solution
Reduced bank fees
Optimized group cash flow
Autorisation scenario is flexible (approval steps)
© 2015 SAP (Schweiz) AG. All rights reserved. 19
Service provider
• Founded in 2012, member of EUROGENIA Group (since april 2015)
• Active in Switzerland (location Lausanne & Nyon)
• SAP Services Partner / Open Text Partner
• Certified Senior consultants
• Focus on Public Sector, SME & Large Enterprise
• Business skills in Finance, Logistic, ECM
• Technical skills in SAP ECC6, S4/HANA, BPC, PSCD
© 2015 SAP (Schweiz) AG. All rights reserved.
Thank you Contact information:
Medvedeva Anastasia
Finance and Treasury principal consultant
Swissgenia SA
+41 21 546 36 01
Avenue Juste-Olivier 11
1006 Lausanne
Suisse