Across Charter Hall's hundreds of bank accounts, reconciliation processes used to be manual. Then, after reconciling a payment to the appropriate bank statement, the team had to calculate how much to transfer among its different levels of accounts and manually move the money. "Once we knew how much a tenant had paid, we would manually remit that cash from the statutory trust account to the property-level account and then from the property account on to the fund-level account," says Ian Ko, treasury manager with Charter Hall. "That whole process was very labor-intensive and impacted our visibility into our cash position."

To automate much of the manual workload, while improving controls and visibility into cash flows, Charter Hall embarked on a project to restructure its transactional banking platform. The project team included key stakeholders from treasury, shared services, property management, and the fund team, as well as from the company's transactional bank and external service providers.

The team adopted Agile values and principles of project management and brought in experienced Scrum masters. "We utilized various Agile tools, including wall boards to map out the project's objectives, work streams, and action items," Ko says. "We utilized standup [meetings] as a forum to communicate project updates and as an opportunity for various stakeholders to discuss ideas for optimizing the end solution.

"This was very much a joint initiative with our providers," he continues. "Our transaction bank and ERP [enterprise resource planning] vendor had representatives attending our standups on a daily basis."

From a solution perspective, the first step was to consolidate multiple transactional banking platforms into one with Westpac Digital Institutional Bank. Charter Hall emphasized the importance of not only reducing its number of bank accounts, but also developing a scalable solution that will minimize the number of new bank accounts as the business continues to grow.

The project management team decided to use Westpac's virtual bank account product, which they further enhanced by integrating it with Charter Hall's ERP system and GTreasury treasury management system. Now, Charter Hall has one statutory trust account for each state and uses the virtual account structure to segregate each of those accounts' balances among the company's different funds.

"We have an algorithm for generating a virtual account number for each of our tenant customers, within each fund and in each state," Thomas explains. "Our ERP system assigns each tenant customer a unique ID, then automatically generates invoices using the tenant ID. The algorithm for creating the virtual account number incorporates the tenant ID. The integration between our ERP system and Westpac banking platform means that when the tenant pays using that tenant ID, regardless of the payment method, Westpac automatically credits the correct virtual account."

To enhance internal controls, Charter Hall implemented the reconciliation module within the ERP system. The project team established a daily bank transaction feed, which the ERP system automatically reconciles against the general ledger. This process limits the need for human intervention to investigation of exceptions, rather than collection of data.

The second major area of enhancement is automated cash sweeping among the company's different levels of accounts. "This further strengthens internal controls," Thomas says. "Overall, we have distilled receipting, reconciliation, and cash sweeping down from a process that took weeks into an automated daily process." This change has improved the company's liquidity position and enabled the project team to develop a new cash flow forecasting process utilizing Westpac and GTreasury.

Finally, the solution's automation made it much easier for Charter Hall to transition to a work-from-home environment when Covid-19 hit. "Our experience at the beginning of the pandemic, where there was a shift to a work-from-home environment, was smooth and seamless," Ko says. "The fact that we were able to pivot so quickly is a testament that the solution was performing as expected."

See also:

• Liquidity Management Heads off the Beaten Path
• On-demand webcast celebrating our winning projects: Liquidity Management: Award Winners Share 2020 Survival Strategies