In-house banking is a time-consuming and complicated process that requires countless hours of analysis. So why would any organisation choose to do their banking in-house? The benefits are clear: reduction in bank charges and FX costs. The primary challenges of managing an in-house banking structure are the analysis and physical settlement of inter-company relationships. Confirming relationship validity, verifying the transactions that make up the balance and initiating physical transfer are demanding and time-consuming processes. Depending on the company, this could involve thousands of real payments.
Vincent Doromal explains, “Google’s goal is to streamline this cumbersome process by automating inter-company settlements so that our treasury team can spend more time optimising the in-house banking structure by focusing on liquidity, maximising interest income and reducing costs. We will accomplish our objective by integrating SunGard’s Quantum treasury workstation with our existing Oracle ERP system to seamlessly settle inter-company balances.”
Google is currently in the process of building an Oracle-to-Quantum interface that will allow Oracle to feed inter-company transaction information to Quantum. “Typically, we see Quantum-to-Oracle interfaces where Quantum provides general ledger entries to Oracle for Quantum-related transactions,” says Doromal. “However, in this case, Google will do the opposite: Oracle will provide Quantum with information that Quantum will then use for inter-company settlements.” The imported Oracle inter-company transaction information will be represented as a new bank account for each relationship.
Using Quantum’s target/threshold balance functionality, Google will establish rules to automatically initiate payments to the entity that is owed. Google treasury will then review the Quantum-initiated payments using Oracle information and approve the payments for settlement. An innovative process will be implemented allowing the two separate systems to provide information to each other make decisions based on a predefined rule set, initiate payments, and then book those payments. Google’s treasury department will have final approval over the automatically-initiated payments, so human controls are still in place. This will enable Google treasury staff to remove themselves from the mundane tasks of preparing inter-company settlements. Dysfunctional inter-company relationships imported from Oracle will be identified and researched. The process will be dramatically improved because of the automation, controls, and time saved.
The key benefits of this solution will be the time and cost savings realised because accounting and treasury resources will no longer be required to analyse, set up, and book inter-company settlements. This represents a substantial savings for Google: approximately four full-time employees – two each from treasury and accounting. In addition, Google’s treasury and accounting personnel will be available to handle other value-added tasks. The straight through processing of this solution minimises errors and increases efficiency, while still maintaining appropriate levels of control. If an automatically-generated Quantum calculation appears to be incorrect, Google can still drill down and analyse or reject the initiated transaction.
“Google’s innovative approach blends the unique strengths of two best-in-class systems to streamline a complicated and time-consuming task. Quantum’s ability to automate payments through predefined rule sets, coupled with Oracle’s robust reporting functionality, offers the ideal combination for automating this process. Google saves time and money, while creating a straight-through, SOX-friendly solution that minimises errors,” says Doromal.
