How to Gain Visibility and Take Control of Payments and Cash

When it comes to payments, cash, liquidity and spend management, bank system independence is both desirable and achievable. Coupa’s Rajiv Ramachandran, Senior Vice President, Product Strategy & Management, Coupa Pay, explains why and how.

In a global economy, where political, social and economic uncertainties persist, the effects of such disturbances are witnessed first-hand, and on a daily basis, by treasurers. But even in more predictable times, where businesses of all sizes and types now depend upon a global supply chain, disruptions can divert from strategic direction.

This is why, as a company grows organically and through mergers and acquisitions (M&A), the need to retain control and understanding of commercial relationships is important, notes Ramachandran. But, both domestically and overseas, he acknowledges that control is becoming ever more necessary and demanding. Indeed, whether with suppliers, subsidiaries, contractors, employees or banks, these relationships carry increasingly weighty obligations.

This means having what Ramachandran refers to as “timely visibility” over every important interaction. In particular, as the lifeblood of business, he believes that a view of cash and payments wholly across the organisation’s ecosystem, is dictating how well those stakeholder obligations, and indeed the relationships themselves, are managed.

New approach

The broad sweep of variables faced by treasury are taken as “a normal part of doing business,” says Ramachandran. But to be fully prepared for every challenge and opportunity, he believes it is now necessary for companies, and especially treasury and cash management, to create a new operational model. It is, he explains, one “where data is visible and secure across the entire business but where, at the same time, local teams have sufficient control and flexibility to manage their own nuanced needs”.

For this to happen, a unified technological approach is required. “You cannot have visibility over just one channel or part of your business, or just your main banking partner, you need it across the full spectrum of your operations,” he advises.

“For Coupa, as a provider of SaaS-based spend, treasury and payments solutions, it is our role to deliver this connected world,” says Ramachandran. “It’s all about offering flexibility in a changing world.”

It is, he adds, also part of Coupa’s vision to enable customers “to see the unified picture that is the reality of their global business today”. Indeed, when a business is, for example, based in Europe but has some of its key banking relationships in Latin or Central America, or across Asia, timely visibility is no longer just useful, he believes it to be a “must-have”.

Without the level of visibility afforded by a single platform, he states treasurers will rarely be in a position to answer fundamental questions from the CFO about current liquidity and working capital. “And if that is the case, they will struggle to provide the right financial solutions to their organisation.”

Because controls over payments and invoicing processes are seldom common among spreadsheet-based, and even best-of-breed point solutions, a lack of traceability potentially gives rise to incidences of fraud. “But where a common platform such as Coupa is deployed, permissions are clearly established for each activity, with one user-record and full auditability spanning every application,” says Ramachandran.

Moving beyond the challenge

Solving problems is not the sole point of delivering single-platform visibility. It can be about facilitating growth too. The approach that Coupa uses is based on its well-established maturity model, explains Ramachandran. “It’s a journey, and the first step for the client is the realisation of where they are on that pathway.” This may present as an uncomfortable ‘reveal’ for some companies, he notes, but accepting that what it is doing is sub-optimal is essential to move forward.

In practice, using multiple security devices to access multiple banking portals to download a series of disconnected spreadsheets just to know what the current cash balance is on any given morning is an affliction recognised by many treasurers.

However, what many do not recognise is that they can do something about it. “Working with highly manual, reactive and siloed processes suggests that they are doing the best they can just to keep the lights on,” comments Ramachandran. “It really need not be like this.”

As an integrated platform provider, he believes Coupa is offering something of a lifeline to such businesses in terms of their future growth. It provides the foundations for digitising the treasury back office, which starts to generate centralised control while still allowing local units their freedom to respond to local needs, he explains.

“Our conversations with customers tend to begin with an understanding and acceptance of their current state, but quickly go on to help them achieve digitisation of their core operations, then onwards to optimisation,” he continues. “The digital platform is therefore vital in helping treasury connect the components of its business as it goes forward.”

Within the scope of core operations, visibility over the full range of payments activities – from spend management to actual payment processing – cash flow and working capital management, rapidly brings controllable elements under central scrutiny but, importantly, it also enables scalability. When control over the fundamentals is achieved, optimisation becomes a realistic prospect and this is when growth is back on the agenda.

“Clients can start thinking about currency exposures and risk management, cash pooling options and payments route optimisation,” notes Ramachandran. “They can start building their approach to their cash conversion cycle, working capital position and their supplier relationships. From thereon it becomes one of planning continuous improvement.”

Sharing experiences

The optimisation phase is where working with a provider such as Coupa has a distinct advantage. To set targets and gauge improvement requires a range of key performance indicators (KPIs) and credible benchmarks, drawn from internal and external data.

While a connected platform can provide key internal metrics on which to base the push for optimisation, the strongest boost comes from access to comparative data drawn from across the sectors and geographies in which the business operates. This concerns data drawn from sources both domestic and international. It is this wider reach that Coupa has purposefully dubbed ‘community intelligence’, says Ramachandran.

“It offers customers the possibility of seeking background information, such as payment performance, to support certain decisions. This is useful, for instance, when they start working with a new supplier with which the community has already engaged,” he explains. “As a resource, it is growing daily, in line with the expansion of our community.”

The promise of advanced technologies such as artificial intelligence (AI) and machine learning (ML) is taking this function even further on the Coupa platform. Deploying ML to determine patterns of payment behaviour can flag up any new payment that appears to be an outlier in terms of historical performance. But it can also be used to enhance cash forecasting too, says Ramachandran.

With the pandemic impacting revenue streams, accurate forecasting of cash positions has become a matter of almost existential importance for many businesses. The heightened awareness of the importance of cash forecasting is, he feels, now permanently on the agenda.

“But while businesses are really looking for predictability, many are not sure how to predict their cash flows,” he notes. “So, what we have built, using AI and ML, is the means for clients to analyse their own data over any time series, with the ability to predict with more than 80% accuracy.”

Furthermore, as part of the community intelligence experience, Ramachandran adds that aggregated and anonymised data is now being offered to clients to help them see how closely their cash flow management and forecasting activities match various key demographics, such as by sector or geography. From this benchmarked external performance data, he says Coupa is also able to provide “prescriptive insights” to each customer to hone their approach.

Taking the next step

It is part of the Coupa remit to maintain its customer-education programme around key market trends and challenges, and how its platform is changing to meet their needs. “We are motivated by our customers’ success, and we define success through a series of quantifiable, achievable and timely goals that we define and measure in our platform,” says Ramachandran. A customer seeking a 60% uptake of a new electronic invoicing programme across its supply chain will be able to clearly see its performance in this respect, and respond accordingly.

“We’re helping customers lay down the blueprint of their vision,” states Ramachandran. “We’re helping them define and understand their success metrics, implement the right product to achieve and exceed those metrics, and then constantly monitor progress so they derive the value they are seeking.”

With a customer community that is “somewhat vocal” regarding the value it obtains from the system, some using the Coupa Pure Insights rating tool, he reports that the vendor is subject to a constant source of input from active users. “It’s a journey for us too. The community we are building and organising around is starting to see the value of their involvement, and we are learning a lot from that.”

In his final assessment, Ramachandran believes that the digitisation of treasury is now nearing the top of the itinerary. “The pandemic exposed what was always known – that paper-based processes and siloed operations are not working – but it did so at such a high level that most now understand that this is no longer just about inefficiencies. It has really exposed problems with business fundamentals.”

While inefficiencies may in themselves be survivable, he argues that failure to attend to inadequate fundamentals will increasingly become a threat to survival. “It’s leading companies to set their back office on the right path, and rather than building a solution from scratch many are realising it’s possible to acquire a simple-to-use, easy-to-adopt single platform.”

By facilitating end-to-end data transparency and traceability, and connectivity with banking partners, subsidiaries and customers, every stakeholder begins to have at their fingertips a set of common processes around payments, cash, liquidity and spend management. 

Ramachandran concludes: “When treasurers see the advantages of going from an operational outlook to one of connectedness and continuous optimisation, that’s when they move beyond keeping the lights on to thinking and becoming one of the most strategically important functions in their organisation.” 

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Rajiv Ramachandran
Senior Vice President, Product Strategy & Management, Coupa Pay

Ramachandran is responsible for the overall product strategy and management of Coupa Pay  - Coupa’s Payments, Treasury and Working Capital Platform. Over the past four years he has led the launch, growth and adoption of Coupa Pay in one of the company’s most successful product campaigns.

Having spent more than 20 years in the enterprise software industry, Ramachandran is highly experienced in SaaS solutions, cloud and on-premise-based integrations of financial platforms and streamlining B2B processes.

Ramachandran holds an MBA from UCLA Anderson School of Business and has multiple patent-pending innovations against his name.