As Ben Haislip, Associate Director, Treasury explains, “this deployment allowed us to create company efficiencies and simplify our account structure, reduce payment and bank costs and provide business contingency options. In the past, we had several different banking relationships across Western Europe, each using different clearing instruments and rules specific to local geography, providing little visibility into transaction reconciliation and detail billing. We consolidated from ten banks down to five, with Citi and HSBC selected as our two primary banks.”
Citi and HSBC were required to create host-to-host connectivity using ISO 20022 XML version 2 file formats, receiving all bank-billing data electronically. At the same time, CCE replaced its third-party payment factory software, which used a number of applications and interfaces to process payment and collection instruments. The new solution integrated a functionality of CCE’s ERP system (SAP), optimising the financial information flows between CCE and its bank partners by leveraging the SAP Bank Communication Management (BCM) module for straight through processing (STP) and ISO 20022 XML version 2 file format.
As Haislip recalls, “we encountered a few challenges in technology, Single Euro Payments Area (SEPA) regulation adoption and industry standards implementation.”
The first challenge was to fully understand recent changes in technology around SWIFT. CCE performed a cost-benefit analysis and decided a bank host-to-host connection using ISO 20022 XML version 2 file formats was the best standard. Another challenge was the changing EU regulatory dates for SEPA. CCE partnered with its banks to implement local payment types in the XML format as it transitioned certain instruments to SEPA. While implementing SEPA instruments, CCE continued to move its business away from local payment/collection types towards more standardised SEPA XML Credit Transfers (SCTs) and SEPA Direct Debits (SDDs).
CCE’s bank data required updating, including ERP vendor and customer information with the International Bank Account Numbers (IBANs) and Bank Identifier Codes (BICs) needed for SEPA compliant instruments. CCE reviewed sending employee payroll via SEPA and opted to include local payment types in ISO 20022 XML version 2 file formats until further clarification from the EU in 2013. The results of the project are impressive:
CCE consolidated its bank relationships.
Reduced the number of bank accounts.
Decreased the number of cash pools by 50% and bank fees by 25%.
Standardised its European bank instruments in order to take advantage of SEPA.
This allowed CCE to organise, control and secure its payments using ISO 20022 XML version 2 file format standards and directly connecting to its two banks. With the deployment of BCM and ISO 20022 XML version two file format, CCE created process efficiency in the procure-to-pay (P2P), order-to-cash (O2C) and record-to-report (R2R) areas of the company by increasing automated reconciliation while also decreasing its overall payment cost and implementing business continuity to connect with Citi and HSBC across Europe.
As Haislip concludes, “CCE was able to perform a project management role by documenting all processes, interfacing procedures for standardisation and ultimately aligning with its finance strategy to achieve world-class performance driven by a functionalised finance organisation aligned to the business.”