Cash & Liquidity Management

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Enhancing and Integrating Financial Processes at REWE At REWE Group, we have embarked on a variety of cash and trade finance initiatives in recent months, with a view to optimising trade finance, cash management and liquidity planning and integrating financial information more effectively. Around 18 months ago, we restructured our finance department, which includes both treasury and trade finance, and put in place a new team. Since then, working with SEB, we have made a number of substantial achievements to enhance our internal and external processes.

Enhancing and Integrating Financial Processes at REWE

by Thomas Clemens, Head of Cash and Risk Management, and Heike Nine, Head of Trade Finance Operations, REWE Group

At REWE Group, we have embarked on a variety of cash and trade finance initiatives in recent months, with a view to optimising trade finance, cash management and liquidity planning and integrating financial information more effectively. Around 18 months ago, we restructured our finance department, which includes both treasury and trade finance, and put in place a new team. Since then, working with SEB, we have made a number of substantial achievements to enhance our internal and external processes.

Partnering with SEB

We decided to work with SEB as our banking partner for a variety of reasons. SEB is one of the partner banks in our syndicated lending facility, which comprises 28 banks, but we found that not every bank presented itself in as convincing a way as SEB. Cost is inevitably an issue when selecting a banking partner and SEB was highly competitive on price. More importantly, however, the team has brought significant problem-solving skills and specialist knowledge to support our trade finance requirements. For example, they have been quick to understand our challenges and provide solutions, and have shown significant commitment to our business. We have found that SEB asks the right questions, suggests detailed solutions and delivers what they commit to.

Import finance requirements

Letters of Credit (LCs) are a major part of our business, and our needs in this area can be quite complex. We work with a German importer which delivers on large orders for electronic materials including working with distributors in the Far East. As a smaller firm, the importer has less financial flexibility than REWE, so we wanted to support the company with an import finance arrangement but without adding substantial risk to our business by providing lending or guarantees. This was a complex arrangement and we needed significant support in putting together a structure and contract appropriate to each jurisdiction to facilitate the relationship between the importer and distributors. With SEB’s help, we achieved a finely balanced structure, effectively resembling an escrow agreement, which provided greater financial assurance to distributors and enabled the importer to conduct its business more effectively, ultimately benefiting REWE.

Optimising internal processes

In addition to ensuring that we had the right external contractual relationships in place, we wanted to optimise our internal processes to become as efficient as possible and accelerate cash flow. We are seeking to automate and increase the efficiency of every financial process. SEB has been instrumental in this process so far by helping us to address issues at a detailed level rather than simply discussing them at a high level. For example, in our REWE department in Cologne, trade finance documents were sent by post, which slowed our processes and meant that any errors took a long time to resolve. With SEB’s help, we now transmit our documents electronically using scanned images, which is more efficient, cost-effective and enables errors to be remedied quickly.

Another challenge we have addressed is the processing of trade finance contracts which is now electronic. We use Multicash, provided by Omikron Systemhaus GmbH, to create SWIFT messages which we send via eBanking. Only one message type is not yet fully automated but SEB have been quick to provide solutions and this will be resolved imminently. This contrasts with other banks which indicated that this could not be achieved and they were not in a position to amend their systems to support our messaging requirements.

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