Cash & Liquidity Management

Establishing a Single Finance Platform for All Treasury Operations with Vattenfall Vattenfall is one of Europeís largest generators of electricity and heat. We find out more about the company's decision to establish a single finance platform for all treasury operations.

Establishing a Single Finance Platform for All Treasury Operations with Vattenfall

An interview with Sabine Raschke, Senior SAP Treasury Consultant, Vattenfall Europe Information Services GmbH

Could you give us a brief outline about the company and describe the role of your treasury function?

Vattenfall is one of Europe’s largest generators of electricity and heat. The company is 100% owned by Kingdom of Sweden and operates mainly in Denmark, Finland, Germany, The Netherlands, Sweden and the UK. The main products are electricity, heat, gas and energy services. Due to strong energy markets Vattenfall is currently being transformed from a traditional utility to a customer-focused, lean and responsive organisation

I work as a Senior SAP Treasury consultant in the German IT company of Vattenfall and I’m responsible for all treasury related processes, mainly on our SAP treasury system as well as on the connected SAP ERP and non-SAP systems. I provide solutions in this area and also have a role in implementing projects related to treasury and maintaining our treasury system.

What prompted the decision to establish a single finance platform for all treasury operations?

Treasury was providing services for about 300 legal entities in eight countries in 2010. An integrated group treasury function was established, but there were various issues with integrated or straight-through processing because of the different financial IT systems, different levels of automation, a great variety of external/internal interfaces for finance and treasury and different accountability.

Could you outline the main benefits of the solution so far? Are there any additional long-term benefits you are expecting to see?

The main benefits are standardisation, harmonisation and centralisation. Today the same processes are established in all Vattenfall locations and we can now start fine-tuning them and preparing to organise everything from one location. Internal payments via IHC have reduced the number of items to be reconciled in the closing process. Before the project began, we were only able to pay internally up until the 25th of the month, but now we can do so up to the last day. Vattenfall AB is now responsible for all liquidity and FX management at the group level.

What were the biggest challenges your team encountered during the implementation process?

  • Switching from notional pooling and introducing zero-balancing in our main cash pooling bank in the Nordics.
  • Settlement in local currency via IHC instead of external payments for internal invoices and internal deals.
  • Losing the FX balances of external bank accounts used for hedging FX exposures in our trading companies.
  • Convincing our trading companies of the benefits of the process change and getting them to provide sufficient information within our liquidity planner.

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