No doubt, a year ago, there were days when Roger Shannon, assistant treasurer of Brown-Forman Corp., probably could have used a shot of Jack Daniel's to help him through the day. Back then, the $2.4 billion distiller and distributor of wines and spirits, including the popular whiskey, was still using what Shannon described as "Stone Age" tools to manage working capital and make cash forecasts. All of Brown-Forman's 16 separate subsidiaries were forced to re-key bank information into cumbersome spreadsheets for daily cash positions, manually reconcile accounts and post account-receivable receipts from paper bank statements.

"To establish our daily cash position, we would determine our cash balance either by polling the bank with dial-up software or by receiving a fax from the bank and then manually key in this information into an Excel spreadsheet," Shannon recounts. "Recording cash movement between accounts in the general ledger also was made manually at month-end from the cash spreadsheet's batch totals. This made monthly bank reconciliation more difficult because the detail on the bank statement had to be reconciled to the consolidated batch entries in the ledger. We would then re-key data into desktop banking systems whenever we needed to make a wire transfer or a foreign exchange payment. Re-keying always presents the opportunity to mis-key something or miss something. You get an account number wrong and send a wire to the wrong place. The entire process was time consuming and very inefficient."

But Shannon can put away those shot glasses. Today, Brown-Forman is leveraging technology to obtain an automated, integrated working capital management system across the company. Gone are the cumbersome spreadsheets and the need to re-key. Central treasury now uploads bank statements for its cash position, reconciles cash accounts each day and posts customer accounts to accounts receivables automatically. "Before we implemented the new system, it took treasury 12 hours a day to manage daily cash and payments and a full 24 hours to handle the month-end closing," says Shannon. "We're down now to two hours a day for the daily cash and payments and just three hours for the month-end closing, adding up to about $50,000 in transaction cost savings this year. This is a far cry from when we had no tool to forecast cash and spent inordinate amounts of time reconciling and re-keying information."

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