The process for consolidating this information sapped productivity. "Essentially, we would ask our colleagues from around the globe to fill in Excel tables," explains Cihan Catakli, the company's financial technology executive. "One table would show cash at the beginning of the month; cash inflows; supplier, tax, and other payments; and cash outflows. Another table would show bank account balances, and a third table would show a cash flow forecast. Turning all this data gathered from each subsidiary into one consolidated table was extremely time-consuming." That is why corporate treasury typically reported cash balances only on a monthly basis.

"Centralized treasury did not have access to the online banking channels for all bank accounts worldwide," Catakli says. "And even where they had access, checking more than 1,000 bank accounts created additional complexity and took time."

Gokalp adds, "The payment method for some Sisecam subsidiaries was to send duly signed written instructions to the banks by fax and email. This manual workflow took staff time away from more strategic activities. Executing a payment usually took between 30 minutes and 2 hours."

All in all, efficiency within the treasury team was not optimized because of the proliferation of nonstandard and manual activities. Recognizing the opportunity to dramatically improve key treasury processes, Sisecam's CFO formed a project team that included leaders from treasury, accounting, procurement, and IT. The group's goal was to create a roadmap for treasury transformation at Sisecam. They performed a broad needs assessment, with a focus on determining which processes and technologies would best prepare the company for future agility and resilience.

One key objective that emerged through the needs assessment was to develop a central treasury dashboard that decision-makers could use to understand cash balances and cash flows within business units around the world. Thus, the first steps in the initiative included giving corporate treasury access to all business units' bank accounts and launching a two-year software selection process.

Sisecam also restructured corporate treasury in the early stages of the initiative. The company established a shared-service center to handle the day-to-day operations of accounts receivable (A/R), payments, and bank accounting throughout the organization. Having a single group impose consistent financial controls companywide—as well as standardize processes around payments, banking, reconciliations, and A/R—generated massive cost reductions, in addition to greatly improving control for corporate management.

At the same time, Sisecam established a financial technology (fintech) function. "The fintech department is the bridge between the company's needs within the treasury space and the available technologies in the market," Gokalp explains. "A treasury professional who sees an opportunity for improvement might not know how to make that happen. If he begins to research the possible ways to harness different technologies, he might become like a fish lost in the ocean. But the technologists on the fintech team can listen to treasury professionals and then go to market, talk with the banks and technology vendors, and find the appropriate solution."

When the project team determined that a treasury management system was Sisecam's best option for providing a centralized dashboard, the company selected Kyriba as the right solution to meet their needs. Sisecam rolled out the treasury management system and automated the collection of MT940 messaging from bank accounts around the world. Now the system automatically reconciles around 1,000 bank accounts on a daily basis.

"Each morning, we see within the treasury management system our cash balances for each account, as well as how much money we need to pay, where, and to whom," says Ece Yurtoglu, global cash management manager for Sisecam. "Because we are now able to monitor account balances in real time, we can develop much more accurate cash forecasts and effective liquidity management. And the system's digital payment approvals have been absolutely critical in the Covid, remote-work era."

Yurtoglu says Sisecam uses the treasury management system to optimize liquidity companywide. Excess cash is swept automatically into the company's cash pool, and requested funds are transferred to subsidiaries' accounts under the oversight of corporate treasury. Plus, Catakli says, "We are now able to monitor and track global cash and payment operations in a single dashboard." Sisecam estimates that the increased efficiency of cash management is generating around $200,000 a year in deposit returns, foreign exchange (FX) income, and cost savings.

The fintech group also recommended that treasury decision-makers build an in-house bank using a module within the treasury management system. "As a holding company, we manage a lot of variations on intercompany loans and deposits," Gokalp says. "Our new system streamlines operational issues so that the in-house bank is manageable, even with all the necessary monitoring, reporting, and calculations of FX rates, interest, and cash flows.

See also:

• Transforming Treasury to Support Ongoing Global Growth
• Enveloping Processes in Continuous Improvement
• And view our complimentary, on-demand webcast recognizing the 2022 Alexander Hamilton Award winners in the category Treasury Transformation—Treasury Transformation: Growing Your Organization Globally

Sisecam extended the benefits beyond internal groups by introducing a supply-chain finance program. "Suppliers can use our system to monitor receivables that we have approved for payment," Yurtoglu explains. "If they choose to be paid early on an invoice, that information automatically flows to the bank. The bank will pay the vendor's receivable at a discount, with the interest based on our strong credit rating. And then we will pay the bank at the invoice maturity."

Payments outside the supply-chain finance process can now be executed in less than 10 minutes, rather than the 30 minutes or more that each payment required previously. The treasury transformation project has substantially improved Sisecam's cash conversion cycle. And the real-time visibility into cash balances has transformed treasury decision-making.

One additional major benefit is that the company's new systems and processes minimize the risk of payment fraud. The treasury management system sends alerts when a payment is the first transaction with a new supplier, when a payment to a regular supplier is larger than usual, when a supplier's IBAN changes, or when the company or country is on a sanctions list.

"Payment approvals and real-time audit add another layer of financial controls for payment orders from Sisecam's ERP systems," Catakli says. "Although we are running our treasury management system's fraud detection module, which uses artificial intelligence to detect anomalies and stops payments according to predetermined rules, we require all payments to be generated in the ERP system. So, an end-to-end system that is closed to manual intervention works in the payment process." The team also integrated a Bloomberg data feed into the treasury management system so that treasury staff can monitor credit risk entries instantly.

Gokalp gives the fintech team much of the credit for these successes. Now, the fintech team is working on an application programming interface (API) to further streamline processes.

"To make sure a project accomplishes its goals, you must choose the right technology to meet your needs," Gokalp says. "You also need a good consultant. Choosing the solution is the hard part—but choosing the consultant is the other hard part. Even with a Ferrari, you need a good driver to win the race. We did a lot of reference calls and reference visits before selecting our external partners in our treasury transformation."