This solution shows how Charter Hall centralised its entire treasury function using a single TMS as the king-pin for the restructure with some impressive benefits.
Photo of Ian Ko, Charter Hall Group.
Treasury Operations Manager
Charter Hall Group is an Australian property funds management and investment group with a total managed property portfolio of $14.5bn. It owns and manages nearly 300 commercial properties across the country.
Building sight: how a leading property group centralised its entire treasury
Since its launch in 1991, Charter Hall Group has grown to become one of Australia’s leading property groups, with a total managed portfolio of nearly 300 commercial properties, valued at more than $14.5bn, located across Australia. The Group owns assets across the office, retail and hospitality sectors. Charter Hall is also the nations second largest owner and manager of industrial and logistics assets managed on behalf of institutional, wholesale and retail investors. With complexity increasing with expansion, the pressure to gain visibility and control over Group financials had been mounting for some time.
In 2013, driven by a need to improve internal process efficiency and to better integrate treasury with the rest of the business, Stuart King, Group Treasurer and Ian Ko, Treasury Operations Manager at Charter Hall, identified a centralised operational model as the way forward. This would sit across front, middle and back office functions for all approximately 30 Charter Hall funds – each with their own debt facilities.
After a detailed scoping exercise and liaison with multiple stakeholders, the key system requirements were identified as following:
A re-design and strengthening of treasury operations with an enforced internal control structure.
The implementation of a general ledger (GL) interface to automate the posting of treasury accounting events and reduce manual involvement.
Full harmonisation of Charter Hall’s accounting principles across the entire business.
Automation of Treasury calculations.
Improved system stability, reliability and flexibility through the use of a robust SQL back-end infrastructure and accessed via a private cloud service.
Adoption of an outsourced disaster recovery plan.
Based on these requirements and following a detailed selection process, the team chose a treasury management system (TMS) as the king-pin for the restructure.
Best practice and innovation:
Throughout the implementation, Charter Hall participated in internal and external audits to ensure the ongoing feasibility of the solution and to see that the project was meeting key milestones. This involvement resulted in the identification of previously unforeseen issues as well as new opportunities, which meant scoping requirements were necessarily changed on an ‘as-needed’ basis. Both King and Ko report that the TMS vendor’s team were on hand throughout and were able to respond to concerns raised by the treasury team “quickly and effectively”, resolving all issues “even if that meant creating a tailored solution”.
Ko said: “Charter Hall has an internal culture of innovation and a keen willingness to constantly improve and upgrade its systems to drive efficiencies in process. The Group Treasury team plays a critical role in the Group’s overall success and we are often faced with internal pressures to streamline and improve the function to deliver a better service back to the business.
“Clear metrics and good communication with the business units were critical to ensure the successful delivery of this project. To achieve a project of this nature, scope and size, we worked closely with our vendor to ensure we remained agile through the delivery stages to achieve implementation with minimum disruption to the business operations,” said Ko.
Following user acceptance testing, Charter Hall’s internal and external auditors reviewed and signed off the new TMS. However, the treasury team continues to work with the vendor to maximise the potential of the system. The automation of straight through processing for treasury settlements – currently processed manually – are slated to be addressed in the short term.
In addition, the automation of treasury reporting analytics for stakeholder reporting requirements is now high on the agenda as the treasury team continues to meet the demands of the ever-changing corporate treasury landscape and the needs of the thriving Australian commercial property market.
Re-designed and strengthened treasury operations with an enforced internal control structure.
Implemented GL interface to automate posting of treasury accounting events and reduce manual involvement.
Harmonised accounting principles across the entire business.
Automated treasury calculations.
Improved system stability, reliability and flexibility.
Outsourced disaster recovery plan.