Cash & Liquidity Management
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Optimising Cash & Liquidity Management in Europe

by Lawrence S. Estrop, European Treasury Director, MeadWestvaco

MWV global operations are supported by three treasury hubs located in the United States, Brazil and more recently, Switzerland. Initially, the European treasury operation was a relatively small business function, as most treasury activities were managed from the United States. In 2008, the company made the decision to optimise cash management and placed a European Treasury Director in Switzerland. This article explores the background of the cash management optimisation project, the achievements so far, and plans for the future.

Legacy cash management

Although MWV had mature cash management processes in Brazil and the United States, there were limited streamlined or centralised activities in the European treasury location. Cash was managed locally, with over 130 bank accounts with 31 banks. Account balances were obtained through 19 various electronic banking systems, recorded by the business unit financial controllers and reported to treasury who would consolidate pan-European information into a global cash position report. The process often took several days with considerable opportunity for errors or omissions.

At that time, many activities were conducted manually in the European treasury, which was labour-intensive. For example, we had a significant number of intercompany loans in place to fund both working capital and long term investment, which took substantial effort to manage.