Published: January 01, 2011
Before implementing a new treasury management system (TMS) Bucher had a combination of automated and manual processes for conducting treasury-related activities and for integrating transaction information into the corporate accounting system. We also had disparate systems and reports that formed the basis of our daily cash position on which dealing decisions are made. These needed to be reconciled manually and repeatedly, which was labour-intensive and prone to error, which in turn compromised our dealing decisions.
I had worked for Elopak previously, where we had implemented a new TMS very successfully, so we were seeking to achieve the same degree of efficiency and automation at Bucher. In 2007, therefore, we developed our Treasury Vision 2010, which aimed to create a highly automated, efficient operation, including selecting and implementing a new TMS. Our objectives were twofold:Firstly, to achieve full straight-through-processing for cash management;
Secondly, to automate the creation of accounting entries for treasury transactions (such as FX deals, sweeps, loans, deposit, interest, bank charges, FX gains/losses etc.) with an interface to our general ledger system (Abacus) so that we could rely on up-to-date information at all times.
Having gained internal approval and support for the project, we selected IT2 as our TMS, having considered two other alternatives. We found that the system was cost-effective and a key benefit was that we were able to implement on a modular basis, implementing cash management first and then moving on to accounting. The implementation was completed successfully, but there were challenges.
The balance sheet, P&L and posting rules were set up based on the existing ledger; however, we needed to redesign it to some extent, as we were not able to access the level of detail we required. We went through a process of documenting the posting rules for all transactions, which proved helpful both for setting up the TMS, and for audit purposes. Once the posting rules had been defined and set up in the system, we started testing. After a few months, we started to build the interface, which took longer than expected to agree and implement the relevant file format. Having finalised this, we tested the system and interface for a further month and went live on 1 January 2009.
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The amount of manual processing reduced dramatically as a result of implementing a new system, although initially it took some time for users to become familiar with the TMS and its capabilities. All treasury-related transactions are booked automatically in IT2’s accounting module based on the information received from the bank using MT940 messages through Fides, and on the projected items held within the system using daily market rates. Entries are transferred to Abacus on a daily basis. Consequently, we now have the confidence that our accounting system is up to date and we are able to perform our month-end close on the second day after month end, or sooner. We can also drill down into individual entries, enabling full visibility over data.
With an annual volume of around 15,000 transactions that are transferred from our TMS to our accounting system, the efficiencies gained as a result of achieving 100% straight-through processing are substantial. From a cash management perspective too, we have gained considerable improvements in our processes and the quality of data. Bank balances between IT2’s accounting module are reconciled with those of the cash management module and with the bank statements received by email from the bank, so we have a high degree of data integrity.
In Niederweningen, the head office of Bucher Municipal, compact and truck mounted sweepers are produced.
Our straight-through processing gains are not limited to the back office. In addition to interfaces to Fides for bank account information, and to our accounting system for transferring accounting entries, we have also implemented an interface to automated dealing portal 360T for deals transacted in the market, and with Misys for confirmation matching.
As a result of this major project, we have achieved our Treasury Vision 2010 goals, and implemented a world-class treasury management infrastructure that meets our needs today, and will continue to do so as these evolve in the future.
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