Citi Treasury and Trade Solutions
18
Working with both divesting and acquiring
companies, Citi is helping treasurers smoothly
execute both sides of these transactions. Critical
success factors include quickly understanding
capital injection, account novation, and Know
Your Customer requirements whilst complying
with FX controls which differ by country. A bank
partner can help by providing standardized
documentation, reviewing legal resolutions
quickly, assigning an experienced global project
team, and setting up new technology connectivity,
sometimes with project timeframes as tight as a
few months.
There are a number of ways that a bank can
help to reduce cost, mitigate risk of project
slippage, and limit the time taken to divest,
integrate or set up a business unit. Companies
that are active in M&A agree that successful
projects typically involve the minimal number of
banks. Selecting a single partner makes it far
easier for treasurers to meet project deadlines,
and ensure the acquired or spun-off business
starts life with a sure footing from Day One.
Treasurers can focus on other critical areas
such as capital changes, commercial contracts,
tax, and talent retention.
A way that Citi helps reduce project time is
through our ERP integrator solution. Citi has
deployed this technology tool to more than 40
companies to implement XML for accounts
payable in a matter of weeks per country. An
XML project would normally require several
months of development and testing per country.
This particular tool is one way Citi can help
clients lower costs, minimize IT resources, and
provide flexibility after the initial “clone and go”
dust has settled.
Technology Sector Working Capital Programs
Treasurers are partnering with procurement
and accounts payable to strengthen supplier
relationships and free up cash within working
capital cycles.
While procurement plays the most important
role in managing supplier relationships,
treasurers can enhance supplier negotiations by
providing a deeper understanding of the working
capital aspects of the purchase-to-pay process.
A supplier may have a number of motivations for
joining a supplier financing program, not least the
lower cost of funding available. Meanwhile, the
buying company can extend payment terms to
improve days payable outstanding whilst
positioning the benefits of the program to
achieve pricing improvements and lower cost
of goods sold.
As the number of programs increases, sector
familiarity grows, leading to greater supplier
adoption and value to both suppliers and their
customers. Asia is often a proof of concept pilot
for these programs because many companies
have their manufacturing facilities in this region.
Regional centers such as Singapore provide
stable procurement hubs to better manage
in-region supplier relationships.
Leveraging proprietary technology, Citi’s Asia
Innovation Lab has developed a cutting-edge
interactive tool which analyzes financial data
for a company, and more accurately calculates
the financial benefit of a program. This helps
treasurers benchmark their working capital
against key competitors and peers. The data is
publicly available and the tool enables the
program parameters to be configured, which
helps procurement view financial benefits and
to use these benefits in supplier negotiations.
This interactive solution refreshes the way
a company analyzes its supplier ecosystem
to enable quick identification of the optimal
target group of suppliers that create the most
optimal program.
A Local, Regional and Global Approach
Embracing the opportunities created through
regulatory change and fuelled by record M&A
levels, technology companies are exploring
new horizons in domestic and cross-border
business growth.
Expansion brings uncertainty for treasurers
particularly when entering unfamiliar territories.
Partnering with a bank that has experience in
supporting treasurers manage change is a
valuable way for treasurers to contribute to
achieving the strategic aims of their companies.
Embracing the
opportunities
created through
regulatory
change and
fuelled by record
M&A levels,
technology
companies are
exploring
new horizons in
domestic and
cross-border
business growth.
