Cash & Liquidity Management
Published  6 MIN READ
Please note: this article is over 11 years old. If you feel this article is inaccurate or contains errors get in touch here . Many thanks, TMI

Delivering Value on Behalf of the Enterprise

by Dieter Stynen, Head of Cash Management Corporates, Western Europe, and Head of Global Transaction Banking Belgium, Deutsche Bank

Throughout this Deutsche Bank series on SEPA, we have emphasised that many treasurers and finance managers still erroneously consider their SEPA migration to be a compliance project. Undoubtedly, the potential outcomes of non-compliance could be considerable, but treasurers should not ignore the benefits and opportunities that SEPA offers. One of the most significant areas of potential benefit is centralisation of payments and collections, including payments-on-behalf-of (POBO) and collections-on-behalf-of (COBO). This article explores how SEPA can be a catalyst for POBO and COBO along with other factors that contribute to a successful project.

Driving efficiencies and control

Many corporations have already centralised their payments into a payments factory or shared service centre (SSC). The same opportunities exist for collections, although fewer companies have achieved this so far. There are clear advantages to centralising payments, such as reducing costs, standardising processes, improving controls and efficiency and leveraging a single technology environment.

Centralising collections is also highly advantageous, in that sales teams can dedicate more time to new business, credit and collection processes can be standardised, arrears reduced, and days sales outstanding (DSO) improved. There has typically been greater reticence in the past about centralising collections however, as collection methods differ across countries, and there is more commercial sensitivity about moving collections further away from sales activities.