Leveraging Cash Management Innovation to Enhance the Customer Experience
by Firas Wanli, Chief Financial Officer and Enamuddin Khan, Treasury Manager, Khidmah LLC
The diverse nature of Khidmah’s property-related services, and the growth in our business over recent years, created a variety of cash and treasury related challenges, not least difficulties in controlling, managing and reconciling incoming and outgoing cash flows in line with industry best practices. As an organisation, Khidmah seeks to demonstrate best-in-class efficiency, control and quality of service across all of its activities, resulting in an ambitious project involving Khidmah’s treasury team and partner bank Abu Dhabi Commercial Bank (ADCB).
Khidmah LLC, subsidiary of Aldar Properties & Capital Investment, is a fully integrated property & facility service solutions provider, delivering comprehensive services through a single channel to the finest properties in Middle East. This includes property management for more than 30,000 units, facilities management for 25 properties, owners’ association services to 13 properties and Khidmati (maintenance) services, together generating revenue of around AED350m and handling in AED1.2bn inflow of fund each year.
The growth of Khidmah had resulted in a substantial increase in the volume and nature of our incoming and outgoing flows. Reconciliation of incoming flows posed particular challenges, which are the result of a variety of payment methods (e.g., bank transfers, cash, cheques and card payments) and are managed within Khidmah and Aldar in SAP and Oracle platform. With the added complication that customers opting for Khidmati services are able to pay annually or when they request maintenance services, owners’ association payments also need to be reconciled, which are managed through SAP and STRATA ERPs.
We recognised that by overcoming these challenges and associated issues, we would optimise financial and operational efficiency, and position the organisation for future growth. Consequently, we were seeking a banking partner that would enable us to streamline our receivables through different methods, and facilitate automated reconciliation through better quality, more standardised information. This would include card collections that could be provided at Khidmah service centres together with an integrated online portal, mobile and physical points of sale (MPOS and POS) and cash deposit machines (CDM).
In addition to incoming payments, we also wanted to use the opportunity to optimise outgoing payments. We process around 2,000 vendor payments and refunds each month using bank transfer letters and cheques. We were keen to automate the payment initiation and approach process as far as possible through a state-of-the-art cash management system, Pro-cash, integrated with the bank through a robust host-to-host connection between our ERP and our bank. We also decided to put in place a corporate card programme for better travel and expenses management.
We already had a long-standing, trusted relationship with ADCB, and following a detailed investigation of our business challenges and potential solutions, we were very satisfied that the bank was able to offer the scalability and security of cash management solution that we required, as well as providing the technical support and solution innovation that would enable us to develop a high quality offering to improve the experience of both our customers and vendors in working with Khidmah.
Solution in practice
Outgoing payments. By working with our bank, ADCB, IT teams and technology partners, we have now been able to streamline the approval and transmission of all outgoing flows in line with industry best practices and the highest levels of corporate governance. Payments, including vendor payments, refunds and payroll, are initiated in one of Khidmah’s ERPs, with automatic processing, including both domestic and international transfers, and cheque printing on our premises. Similarly, we have achieved automatic reconciliation of these flows by enriching and standardising the data format between ADCB and our three ERPs.
Incoming payments (collections). We have worked with ADCB to streamline the collection process through a variety of different collection methods. For example, ADCB has provided us with remote cheque scanning (for both current and post-dated cheques), CDMs, POS, MPOS and an e-Commerce based online payment gateway for card payments. These collection solutions are supported by comprehensive, automated reconciliation capabilities, with seamless integration of MT940 messages into our ERPs (SAP, Oracle & Strata) and customised reporting from Network International for POS and MPOS transactions.