Across some 100 countries, PepsiCo Inc. has been collecting close to $500 million a day from sales of its beverage and snack lines for the past few years. The PepsiCo sales force receives these payments from stores when product is delivered and, in most cases, then proceeds to deposit the money at one of PepsiCo's thousands of bank branches worldwide. All too often, in the past, a significant chunk of that cash could become invisible to PepsiCo's corporate treasury for a critical day or two–and given the widespread distribution, that lapse created the potential for hundreds of millions of dollars to be invested less than optimally. "We [can't] afford to lose the value of that cash for even a day," reflects Arun Nayar, PepsiCo's vice president and assistant treasurer. "We need to use it to borrow as little as possible and invest what's left down to the penny." No treasurer would hope for less, but when PepsiCo went out to seek a banking system that would provide truly global visibility, it discovered to its dismay that its global peers–the huge multinational oil companies, technology companies and consumer products companies–were also stuck with only partial or regional windows into their cash. While global liquidity optimization has been near the top of the treasury agenda at large multinationals for years, systems to facilitate it have universally fallen short. To PepsiCo, the solution was clear: If it wanted such a system, it would have to enlist the help of a bank and make sure that one got built. "Just apply Libor to that much money, and you'll have some idea of the upside potential of this project," observes Lionel L. Nowell III, PepsiCo's senior vice president and treasurer. "It was an ambitious initiative, but worth it."

PepsiCo decided to partner with Citigroup, which also set a high priority on global liquidity management. And so the seed was planted for the next evolution in banking platforms–one that promises to allow companies to view accurate, real-time balances and cash positions worldwide and give them the ability to drill down into those accounts.

The new system, unveiled Dec. 15, is called TreasuryVision, and according to the few treasury professionals who have seen it in action, it is a cut above what has been available until now. "We've seen a lot of banks offer liquidity management tools, but it looks like Citi has tackled the really mucky, difficult task of pulling together all that information from a large number of different bank accounts scattered all over the world," reports Dave Robertson, a partner in the Chicago office of Treasury Strategies Inc. "If Citi can get out in front in liquidity management, they should be able to grab a bigger share of the wallet for liquidity services."

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.