One of the largest nonprofit health plans in the UnitedStates, EmblemHealth serves 3.1 million people across the tri-statearea around New York City. Despite the volume of its cash flows,however, until very recently EmblemHealth managed cash positioningand forecasting via spreadsheets.

When the organization deployed a new treasury workstation modulethat automated cash management, it gained greater visibility intoits current and future cash positions, while simultaneouslystreamlining treasury operations.

Treasury & Risk sat down with ChrisGiordano, assistant treasurer for EmblemHealth, and Charlie Correa,manager of treasury operations, to talk about the project and thebenefits they've achieved.

T&R: How did you handle cashforecasting in your legacy environment?

Chris Giordano: Two years ago, ourforecasting capability was limited. Every day my staff would lookat bank reports for the various entities that fall under theEmblemHealth umbrella. They'd pull out cash balances and plug thosenumbers into a spreadsheet called the Daily Cash Report. They wouldalso add information about our cash investments.

These manual processes left room for error, and didn't enable usto take full advantage of potential investment opportunities. Theyalso were time-consuming for our treasury staff.

Charlie Correa: Treasury staff not onlyhad to input data manually, but also had to perform regular checksto make sure the formulas were correct.

T&R: So you decided to look for amore automated solution for treasury management?

CC: We were already using Kyriba'streasury management system for other things, so we talked to Kyribaabout automating our cash position reporting and cash forecasting.They worked with us to make sure their forecasting module wouldmeet our needs, and we decided to implement their solution.

CG: We put together a project team thatwas led by Charlie, with other representatives of the treasuryoperations team as well as some Kyriba staff. The project team'sgoal was to develop an easier method of calculating our dailyforecast.

T&R: What does your cashforecasting look like now?

CC: Now we're using the Kyriba cash flowforecasting module. Each day's forecast is based on the prior day'sactivities. So when the BAI2 bank reports come in from all ourbanks each morning, they're automatically populating our forecastwith all the previous day's transactions based on mapping ruleswe've created in the treasury workstation.

The forecasting module then uses those prior-dayactuals to forecast out to a 30-day cycle. We can go in and setrules to pick up an average for a specific item that we normallysee, such as payroll, and the module will project that item out for30 days. And for big items that we know are going to come in, wewill manually enter them into the treasury workstation as aconfirmed forecast, because we know that we need those specificdollars available at that particular time. But other than theoccasional unexpected item, the forecasting module automaticallyassigns payments to the given days, indicating what is going toclear each day, which saves us from going in and doing the manualentry in the Excel sheet.

CG: The bottom line is, when we havesomething new that's happening, that won't be on the BAI reports,we have to go in and put that in on the day we expect that money tocome in or, vice versa, we expect money to go out. So there is somemanual intervention, but not like it was before when we had toupdate Excel spreadsheets on a daily basis.

This cloud-based treasury software also puts us in a betterposition by giving us the opportunity to look at all of our bankaccounts together and to forecast what cash flow will be. And sincewe're actually picking up the current cash position dataautomatically from the bank statements, we've eliminated some ofthe room for error that we had before.

T&R: Have payments changed aswell?

CG: Definitely. We're doing our wiretransfers through Kyriba now, rather than having to go into eachindividual bank's portal. We used to have a keychain with severalRSA tokens on it, and anytime we needed to do a wire transfer we'dhave to get the right RSA token, then go into the right portal. Nowit's so much more efficient. We go into Kyriba and initiate ourwires, and we've set up the system so we don't have to enter everybank account and routing number and payee data. That informationpopulates automatically. In this process, payments are bettercontrolled because everything happens in one environment, thetreasury workstation.

CG: Through automation, we're also ableto get the cash forecast report out earlier in the day, whichallows us to notify our investment staff that we have idle cashsitting for short-term investments.

T&R: Can you tell me howautomating cash forecasting has affected your working capitalmanagement?

CG: We're now in a position to make moreeducated decisions based on actual cash flow. As I mentioned, wecan make investments in a more timely manner to increase returns onexcess cash. It also enables us to make adjustments more quickly.Having better visibility into our cash flows means we can keep ourcash in investments with better returns to the point when we needthat cash to fund, down the road.

CC: We send out the forecast to seniormanagement on a daily basis. Before that forecast goes out, thetreasury team discusses our cash position and where we're going tobe in 30 days. Our cash forecasting analyst will advise seniormanagement when excess cash will be needed.

T&R: What else has changed as aresult of automating cash forecasting?

CC: We're a lot more efficient. When weenter a payment for intraday, it automatically populates in ourcash flow forecast. That frees up more time for working on analysisand participating on project teams, rather than having us boggeddown filling out an Excel spreadsheet. I'd say we've reduced theamount of staff time needed to generate our cash forecasts by atleast 40 percent, especially for the analyst who manages this on aday-to-day basis. Also, because we're so much more efficient, wecan do more analytics now than we used to.

CG: As an example, we're now producing areport based on remittances—what comes in via ACH, what comes invia checks, what comes in via lockbox payment, and what comes invia wires. We send that report out to senior management, inaddition to the cash forecasting report. A year ago, we didn't havetime to generate this report, but we do now because we have moretime. And this is the sort of thing we should be doing.

CC: I believe we are moving toward beingmore than an operations department, toward being more strategic andanalytical.

CG: It's also given us a chance to becomemore SMEs [subject matter experts] with respect to differentprojects related to banking. Whether it's disbursements,remittances, or receivables, we always have a seat at the tablenow. It's not just 'We need to open an account' or 'We need toestablish a new lockbox.' People come to us to gather our opinionbased on our expertise. We're lending value to the organization,and that's possible because we're running day-to-day treasuryoperations so much more efficiently.

The whole process has just made better reporting for treasury.And because we are so strategic to the organization—like mosttreasury divisions now—it frees up our time for more analyticalwork, to participate in projects. We're being pulled in constantlyfor our expertise in designing something. So I think that would bethe ultimate benefit of doing this: using our skill sets in a moreeffective way that's strategically aligned with helping theorganization.