Cash visibility that supports global growth


BDP International is a global logistics company in the midst of an incredible journey. Founded in 1966 as a freight forwarder and funded by a $ 1,200 home improvement loan, BDP is today one of the world’s leading logistics supply chain management companies, with more than $ 2.7 billion. dollars in annual sales. It is present in 136 offices and 38 countries, providing support to organizations doing business in these markets through transport services; import, export and national facilitation; support for regulatory compliance; warehousing and distribution; and much more.

The company’s rapid growth has resulted in a similar increase in the volume of its transactions and outgoing payments. “We don’t just make payments to our suppliers; we also make payments on behalf of our customers, such as customs duties, freight charges due to the arrival of a shipment and similar expenses ”, explains Lilian Burke, vice president and treasurer of the company . “Timing is very important, both for these payments themselves and for the delivery of payment confirmations to our counterparties, in order to facilitate the release of urgent shipments.”

BDP executes around 3 million transactions each year. A delay in any of them could have a negative impact on the reputation of the company and, possibly, on its position in the market.

However, when Burke joined the company two and a half years ago, it did not have a treasury department or extensive automation of financial processes. “All of the treasury functions were handled by the local finance and accounting teams, and they were largely manual,” she says. “The automation of payment processes would have been complex to implement as it would have had to take into account not only local practices and staff, but also country-specific banking protocols required to facilitate two-way communication with banks. “

That said, the lack of centralization, standardization or automation of payment processes has created a risk that payments, or payment confirmations, will be delayed. BDP’s local finance and accounting teams managed over 450 bank accounts worldwide and over 56 bank relationships. The path to streamlining some processes, such as global payment disbursements, was fraught with both technological and operational complexities.

One of Burke’s first projects as BDP’s new treasurer was to streamline the structure of bank accounts. “The number of accounts was amazing,” she says. “I spent a lot of time familiarizing myself with how the business works. I wanted to understand all the cash flow from invoicing to invoices to receivables and then on the disbursement side, I needed to know how the payments were executed. She eliminated excess bank accounts; centralized the company’s banking relationships with three major global banks, instead of the 56 it previously used; and drastically reduces costs. Then she turned to process automation.

“Several months after I started, BDP was taken over by a private equity firm,” Burke explains. “I had worked with private equity firms before and understood that they would expect efficiency and lower costs.” As a result, she set out to develop a standardized and straightforward payment process that BDP could use in all jurisdictions around the world.

“I wanted BDP to execute bulk payments from the ERP [enterprise resource planning] system and deliver the corresponding payment files to banking partners around the world with straight-through processing, ”she said. “Likewise, I wanted to automate the cash application processes: collecting payment confirmations from our banking partners, posting transactions to the ERP system and reconciling bank accounts.

To establish two-way communication with banks, BDP decided to deploy a cloud-based solution from German provider Treasury Intelligence Solutions (TIS). Offloading the management of country-specific banking protocols to the service provider relieved BDP’s in-house developers of a complex component of the project, allowing them to focus on configuring the solution to work like Burke’s. had considered.

Today, payments created in BDP’s ERP system are automatically sent first to the TIS platform and then to the appropriate banking partner. In the other direction, TIS automatically receives payment confirmations and other transaction information from banks around the world in MT940 format. From TIS, an application programming interface (API) brings the payment data directly into BDP’s ERP system, which updates the ERP system and generates an email notification to the appropriate counterparties with a payment advice. These emails include the details needed to prove payment has been executed, such as transaction reference numbers, so that counterparties can immediately release shipments on behalf of the BDP customer.

The new process has dramatically reduced the amount of manual work required of the company’s local finance teams, while improving and accelerating the visibility of payment flows. “If someone with the appropriate permissions wants to see our payments, they can do so in the TIS solution,” says Burke. “They can see the details of the transaction, as well as the A / P [accounts payable] invoices have been paid – with payment confirmations on hand – and what incoming accounts receivable [accounts receivable] the payments were cleared. Shipments are no longer delayed due to failures in human-driven processes, improving relationships throughout our supply chain. “

Another advantage of the direct process for banking communications is that BDP has eliminated most of the security risks inherent in its traditional approach. The launch of payments is standardized and centralized on all sites and entities of the company, which increases controls and adds visibility to all outgoing flows. And the new method of delivering batch payment files to banks prevents the interception or manipulation of those files and eliminates the need to use local bank portals.

In addition to the greatly improved payment technology infrastructure, Burke has also assembled a treasury team consisting of herself and three other people. “We have a treasury director for Asia, a treasury director for Europe and the Middle East, and a treasury director for the Americas,” she said. “They are responsible for managing liquidity to meet the needs of the business. In this area of ​​responsibility, they are involved in cash flow forecasting, managing banking relationships and intercompany settlements, monitoring our compliance with debt and credit agreements, and mitigating currency effects. [foreign exchange] exhibitions.

Because the company now has a specialized treasury team, and because this team has better visibility on cash flow thanks to the technology project, “on the A / P side, we are able to control our DPO [days payables outstanding] and manage working capital between DSOs [days sales outstanding] and DPO more efficiently, ”says Burke. “We now have a lot more discipline around these processes. “

The new treasury group is also supporting conversations around cash repatriation. “A lot of businesses are focused on getting their money back to the United States,” Burke adds. “We now have visibility into our global cash positions, which allows us to see where we have excess cash. We can then find ways to use those funds more efficiently, instead of leaving unused cash in some areas. “

Burke attributes the success of the treasury transformation, in part, to his early efforts to build both understanding and relationships with teams across the business. “This project was much bigger than the cash group alone,” she says. “It involved a lot, a lot of people. So it was very important for me to involve as many people as possible, to sell them the idea, to get their buy-in.

“Treasurers need to spend time with people at different levels of the organization, to really understand how processes work,” she adds. “The payment processes that we have automated are actually areas that are beyond my control. If I hadn’t spent time with the accounts payable team and the treasury applications team and accountants, understanding BDP’s cash flow schedule, I would not have been able to make this initiative happen.

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