From the November 2007 issue of Treasury & Risk magazine

Bronze AHA Award in Cash Management

How do you build a state-of-the-art, in-house bank to replace an outsourced treasury operation run in Dublin? That was the challenge facing $16.7 billion Kimberly-Clark. "Our old solution had served us well, but we had outgrown it," reports Jerry Rehfuss, senior director of treasury.

For Kimberly-Clark, the key was having dedicated implementation teams at both the U.S. headquarters in Dallas and the U.K. shared services center. The composition of each would reflect all the interested parties inside and outside the company, which meant representatives from the company's treasury, accounting, tax, legal, IT and shared services departments, as well as advisors from its vendors including lead bank Citigroup, treasury consultant Ernst & Young and workstation provider SunGard. An overall project director and an executive-level steering committee supervised the teams.

Close collaboration, Rehfuss points out, among other things, allowed Kimberly-Clark and SunGard to modify the Quantum workstation, so that it could automate the company's homegrown "TWIST" application, which takes every foreign currency receipt and disbursement of participating affiliates, converts it to the affiliate's home currency and applies the transaction to its in-house bank account. This centralizes net exposures and enables affiliates to operate with only local currency bank accounts.

Having a single global platform using leading technology improved global cash visibility, made forecasts more accurate and saved net interest expense. By centralizing and netting investment and borrowing activity in the in-house bank, Kimberly-Clark saved about $3 million a year in bank spreads, reduced treasury resource requirements for affiliates by $3.5 million annually and shrunk idle balances enough to boost cash flow by $1.2 billion, a number Rehfuss expects to grow.

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