The Road to Centralised Payments

Payment centralisation can protect cash, enhance visibility, and give treasury a stronger voice in how the business moves money. The best models start with how the organisation works: where control belongs, where local execution still matters, and how much flexibility the centre can carry.

Payment centralisation sounds deceptively simple: fewer bank accounts, stronger controls, better visibility and a cleaner route from invoice to settlement. Then the real world intervenes with decentralised business units, legacy ERPs, local quirks, tax, fraud risk and the small matter of making treasury’s tidy architecture survive daily operations.

In a recent TMI webinar in partnership with Serrala, treasury leaders from RTX, Sun Chemical, and Chevron showed how centralisation becomes a design choice shaped by business model, technology, data, and governance.

Peter Wolf, Senior Managing Director Treasury Services, Serrala, said: “The companies that are successful do not start with payments. They start with business strategy. A centralised payments model is the output of a much bigger discussion: how does treasury want to function, and how does the office of the CFO want to operate?”

That strategic question has to come early, while the design can still move. The operating model and technology need to be shaped together because neither can rescue the other if the design logic is wrong.

“You have to be deliberate about design,” added Wolf. “Technology and operating model need to be part of the same conversation, and you have to accept that your model may look different from [those of] your peers. It has to reflect your own DNA as an organisation.”

That organisational DNA is where the tidy theory meets corporate reality. For sophisticated treasury teams, centralisation becomes an exercise in judgment: where the centre earns its keep, where local execution still matters, and how much control the model can carry without slowing the business down.

Drawing the centre

At RTX, centralisation must respect the business’ shape. In a large multibusiness organisation with different operating rhythms, ERPs, and regional requirements, centralising every payment activity can create costs and disruption faster than the benefits of control. The sharper choice is to separate what needs to remain close to the business from that which treasury can govern more effectively at the group level.

Rohan Chaddha, Vice President Finance and Assistant Treasurer, RTX, said: “If your business is fairly decentralised, with regions and business lines operating through their own ERPs and systems, you probably would not try to centralise everything. It would be too expensive to implement across the organisation and too disruptive to the way the business operates.”

Selective centralisation works only when the guardrails are clear. Local execution can continue because policy, compliance, audit, and assurance give the model its discipline.

“There are some non-negotiables,” continued Chaddha. “We have a strong policy framework, in which all the business units and corporate participate. There is also a strong compliance culture driven from the top.”

Sun Chemical has brought treasury much closer to the transaction flow. Its model gives treasury ownership of the cash life cycle at a level many teams would consider ‘noisy’, including receipts, miscellaneous cash items, treasury flows, disbursements, and supplier payments. The logic is simple enough: if it touches the bank statement, it is owned by treasury.

That depth requires a pragmatic trade-off. Treasury is not always first in line for technology investment, so when the window opens, the operating model has to speak the language of the wider business. Aligning with the manufacturing team’s SAP environment means accepting some constraints, but it also gives treasury a seat at the table for a larger transformation.

Michael Dillon, Assistant Treasurer, Sun Chemical, explained: “The message was: we’re a partner to other key business functions, we’ll take a little bit of pain and maybe not exactly what we want, but the integration will be there. It all routes back to a system that all business functions are familiar with.”

Chevron, in contrast, drew its payments centralisation circle two decades ago, standing up a payment factory for its US operations long before payment factories became mainstream. Here, centralisation was shaped by technology advancements, early adoption of a shared services organisation, and the desire to standardise invoice to pay processes for its scale of daily payments.”

“We started our journey on centralised payments back in the early 2000s,” recalled Christine Wang, Principal, Corporation Treasury, Chevron Corporation. ““We had acquired Texaco not long ago and in the midst of integrating Unocal, so we needed a more efficient way to pay our growing volume of bills. From treasury’s perspective, we also needed a better way to have visibility into the timing of cash outflow requirements.

The migration test

“Chevron’s long-running payment factory traveled with the existing in house cash technology beneath it when the company migrated the process to the SAP S/4HANA environment. The company’s multi-year SAP S/4HANA journey forced an early decision about sequencing: payments could move first, before wider US operations, or sit at the back of the queue until the rest of the estate caught up. For a function moving material cash every day, waiting carried its own risk.

Moving the US payments factory first brought the real work into view. The challenge was not simply technical migration, but the condition of the data that would have to travel with it. Chevron’s payment data sat across three SAP enterprise central component (ECC) environments, each with its own habits, standards and historical baggage. S/4HANA became the moment to confront the plumbing: master data, payment methods, bank data, and the governance needed to hold it all together.

During migration, that clean-up work earned its keep. Because the data standards had been tackled in advance, master data came across cleanly. Later, when Chevron’s sizeable US exploration and production

business migrated tothe S/4HANA environment, the payments integration was far smoother because the payments factory had already been deliberately structured.

That is the quiet dividend of treating data, operating model, governance, and technology as one design challenge. Value comes from how those elements come together: clean data shaped around the target operating model, governance that reflects real process ownership, and technology configured to carry the design faithfully.

“You can have a thoughtful operating model, a reasonably clean set of data, strong governance, and best-in-class technology, whether that is S/4HANA, Advanced Payment Management, or another finance platform, and still have a programme that struggles or underperforms,” warned Wolf.

Where design meets people

That kind of underperformance can begin with people. Systems diagrams can map payment centralisation, but sponsorship, ownership, and cross-functional trust decide whether it works in practice. The model spans AP, AR, cash accounting, reporting, controls, and tax, which means treasury cannot carry it on technical authority alone. Without senior backing, even a well-designed architecture can become a lonely treasury campaign.

“Having a seat at the table internally is critical,” stressed Dillon. “These projects cannot be one-sided. You have to come in willing to give a little for others if you want to secure what treasury needs in return.”

For RTX, governance gives a decentralised structure its guardrails. Flexibility can remain close to the business because the centre has defined the areas where variation creates more risk than value. The judgment lies in knowing which decisions can remain local and which must be protected as common infrastructure.

“You need alignment on the common core you will not negotiate on,” advised Chaddha. “For us, that includes the banks we use, the infrastructure we approve, and the data access treasury needs to manage liquidity and mitigate risks such as improper payments.”

Once that common core is defined internally, partner selection becomes more than a procurement decision. Treasury needs advisers who can test the model against the technology, surface options the team may not know exist and distinguish what is configurable from what is sensible. In that sense, the best partners do not simply take instructions. They help sharpen the question.

“In a greenfield scenario, you do not always know what you can have,” continued Dillon. “You need somebody who can help you understand the art of the possible.”

That guidance becomes valuable at the points where projects most often fray. In centralised payments and IHB programmes, pressure tends to gather at the joins: business intent not quite carried through to process ownership, data prepared without the target model fully in mind, or technology configured around requirements that have not been thoroughly tested.

At scale, those small gaps become expensive. Go-live can arrive while the harder questions remain unanswered. Will the model still work five years later? Can it adapt without another rebuild? Will today’s design choices support the automation treasury expects tomorrow? Those questions are where implementation turns into transformation, and where control begins to create value beyond the project itself.

Control earns its keep

That future value still begins with control. Payment processes sit at the point where cash leaves the business, where small weaknesses can quickly become expensive. Centralisation narrows that risk surface by concentrating attention, authority, and scrutiny where cash leaves the organisation.

“The fewer exit points there are for cash, the fewer opportunities there are for error or fraud,” said Wang. “With more eyes on one or two bank accounts, you have a much better chance of spotting duplicate payments or activity that might otherwise be missed locally.”

At Sun Chemical, control also has a human purpose. Urgent payment requests can push employees into decisions they should never have to carry alone. A centralised disbursement process slows the clock, turns pressure back into scrutiny, and ensures decisions are supported by process rather than panic.

“We have to keep our teams safe,” said Dillon. “As a leader, that is one of your biggest responsibilities. The controls and procedures we have built into our global disbursement process help our people do their jobs without being put at risk.”

Once control is in place, the same architecture reveals more than risk. Centralised payment data gives treasury a clearer view of vendor spend, bank flows, funding needs, cash forecasting, and the patterns that AI tools can begin to interrogate. What starts as a control framework becomes a sharper lens on how money moves through the business.

“One of the great advantages of centralisation is data visibility, and that visibility is critical,” said Chaddha.

With that visibility, treasury can read the movement of cash with far greater precision: how flows are tracking against quarterly or annual free cash flow targets, where the business may need to change course, and what the CFO needs to know before the pressure shows up in the numbers. Central, reliable data gives the next layer of analysis something solid to work with. Without it, even the smartest tools can only peer through fog.

“This data is going to be a gold mine for the next level of analytics,” added Chaddha. “It can support insights on fraud, payment screening, and operational trends in vendor spend.”

Keeping the model alive

At its best, payment centralisation continues to adapt after the design work is done. ERP migration, AI, fraud risk, and changing business structures keep testing the model long after the first design decisions are made. The challenge is making significant choices at a stage that ensures the operating model still has room to breathe.

“The hardest part goes beyond choosing the technology or the model,” said Wolf. “It is the discipline to keep shaping them against each other early, before either one hardens.”

Go-live is only the first test of that discipline. Once the model meets daily operations, controls have to prove themselves, users have to find their rhythm, and treasury has to manage the inevitable friction between design intent and working reality.

“Be prepared for a year of transition after go-live,” cautioned Wang. “It is a new process for the business users and the IT teams, and there is a big learning curve when moving from a system that has been in place for 20 or 30 years.”

Strong payment architecture also depends on the habits of the team behind it. Curiosity matters because inherited processes can acquire a false authority over time. The best treasury teams keep testing whether old constraints still hold, where the model can work harder, and when the right answer begins with a better question.

“Stay committed, driven, and curious,” said Dillon. “Never settle, and never stop asking, ‘Why can’t we?’ You have to have the right people around you, but that question should stay at the forefront.”

AI makes that discipline more urgent. Forecasting, fraud detection, payment screening, and spend analytics all depend on cash flow data that is visible, reliable, and available in context. Scattered data limits even the cleverest tools.

“Before you make a decision on centralisation, link it back to your business strategy and operating model,” counselled Chaddha. “Central visibility of cash flows is going to be crucial in the age of AI. You cannot get the value from those tools if the data is not centrally available and visible.”

Payment architecture now sits closer to the strategic centre of treasury because it determines how cash is protected, how data is read, and how quickly the function can respond when the business changes. The strongest models combine the discipline to control today’s flows with the flexibility to absorb the next shift in systems, risk, and business demand.