Depending on countries and payments types in scope, the team also
made a point of registering with local automated clearing houses.
Under the banner of payroll and accounts payable payment
processing, Open Text identified and established connectivity types
and file formats depending on the country. It was necessary to
register new IDs with a local automated clearinghouse, as
appropriate. This continues to be ongoing for some countries. It was
also necessary to integrate payment uploads with the TMS where
payments were previously manual, and rigorously test all
A multibank reporting solution has since enabled balances held with
third-party banks to be fully integrated into a single reporting solution.
This necessitated the identification and implementation of all relevant
legal entities and accounts, and the capturing of details of all in-scope
third-party banks and accounts.
In terms of tackling project and professional management services,
the treasury team worked to develop a standardised documentation
and approval strategy, and provide a regional coordinator to support
documentation. For this to be executed effectively, a project manager
was allocated to manage the banks and project plan according to a
rigorous Statement of Work.
Best practice and innovation
For this broad sweep of improvements to reach a satisfactory
conclusion, it is clear that sound principals of project management
had to be employed. These principals had distinct objectives, scopes
and timelines. The project itself was driven by a strong leader in
treasury management, bearing a clear vision of process improvement
and enhanced controls. Furthermore, robust senior and executive
management support on the governance committee was in evidence,
with active and positive participation throughout.
The reduction of manual paper-based payments is a simple example
of best practice for collections and payments. More complex, but
nonetheless achievable, was the implementation of best practice for
liquidity management through the adoption of physical pooling rather
than notional pooling. Treasury, working with tax, legal and its
banking partners determined that a physical pooling set-up would be
a more transparent and cleaner approach, especially with rising
tensions on intercompany flows between government jurisdictions
around the world. The EMEA pool uses bank accounts in London to
maximise efficiency and minimise paperwork. Entities in each of
Open Text’s four lines of business now pool to a single header
account (one for each currency) to ensure optimisation of cash.
As part of the bank account opening process (which involved intense
KYC and account opening documentation), the team standardised
signatures, general banking resolutions and banking-incumbency
certificate templates for use worldwide.
Technology has played a key role in all of this. The project uses a
third-party TMS connected to the Open Text Trading Grid, an Open
Text cloud-based hosted B2B integration platform, to connect directly
with the company’s five major banks: Citi, J.P. Morgan, Bank of
America Merrill Lynch, RBC and HSBC.
Other banks are connected to the Open Text Swift Service Bureau,
giving treasury a single way to connect with banks, suppliers
“As you can imagine, there was a lot of additional analysis required to
complete these activities,” noted Burkhead. “And keep in mind that
all of this was accomplished while executing several acquisitions,
legal entity rationalisation, and preparing for the implementation of
SAP on 1
Improved visibility of global cash, liquidity, and control
over cash assets.
Enabled easier acquisition integration and aggregation of
excess cash for acquisition.
Leveraged transactional volumes and eliminated fixed
costs across fewer banks.
Streamlined transactional processes (ERP system
integration and straight through processing for balances,
transactions, and payments).
Implemented best practices utilising electronic payments
Achieved higher returns on excess cash (leveraging
liquidity pools for short-term investment purposes).
Reduced administration effort.
Significantly reduced documentation requirements,
signatory mandates, KYC needs and bank access
Improved controls environment (reduced bank accounts,
segregated cash flow for payroll).
Reduced counterparty credit risk.
Winning an Adam Smith award
is the culmination of a strategy
that was developed a number of
years ago. Winning the award is
also bringing visibility and
recognition to the numerous
people at Open Text who
participated in our project as
well as highlighting some of our
own products and services that
were key to our success.
Jonathan Burkhead, Director
HIGHLY COMMENDED WINNER
Treasury Today’s Top Treasury Team8 | treasurytoday Adam Smith Awards © August 2017