Photo of Rachel Navarro, J.P. Morgan collecting the Award on behalf of Avis Budget Group.

The enormous challenges of this initiative – re-engineering the company’s European treasury function to include an innovative POBO account structure, centralising payables to a SSC and upgrading the treasury workstation – were achieved in record time. A six-month end-to-end project to incorporate SEPA go-live for all euro entities by 1^st February 2014, with a fully integrated solution has transformed the region into a fully centralised structure incorporating both the EMEA headquarters and SSC.

The challenge

For Avis Budget, doing business across Europe was hampered by operational inefficiencies and higher costs associated with managing multiple banking relationships and dealing with regulations and practices that varied from country to country. A lack of online reporting and centralised control over regional activities created further challenges. In addition, the decentralised nature of the company’s payment structures severely limited visibility into balances, leaving idle cash and causing the treasury team to miss opportunities to deploy excess funds. The mix of semi-manual and disparate processes across Avis Budget’s corporate European operations also created inefficiencies in staff processing time.

The impending Single Euro Payments Area (SEPA) compliance deadline for payment and direct debit processing became the impetus for the company’s vital and far-reaching treasury transformation initiative. Critical objectives of the initiative included transition to an optimum, highly efficient disbursement banking structure for the company’s European business.

The solution

“We set the goal of moving the inefficient processing procedures used in each country to a shared services centre (SSC) with the focus of identifying and integrating the European business with best practices in international cash management,” explains David Calabria, Vice President and Assistant Treasurer.

These involved standardising payment processing for each country on a single global format, utilising a single-bank platform for disbursements in Europe, improving visibility to balance and transaction details and creating value by gaining efficiencies and centralising customer service and support.

The team worked closely with its banking partners, including J.P. Morgan, to re-engineer the company’s European treasury function. This entailed implementing an innovative pay-on-behalf-of (POBO) account structure to reduce the number of bank accounts, centralising payables to the SSC, centralising to a pan-Europe pooling structure and upgrading the treasury workstation to a global platform. This innovative initiative enabled Avis Budget to become SEPA-compliant and helped bring its European treasury in line with best-in-class corporate treasury operations.

The new pooling structure enabled the efficient daily sweeping of balances into accounts in the U.K., increasing visibility and providing better control of cash. Direct feeds from pooling accounts to the new treasury management system have automated the generation of all intercompany loan balances.

Best practice and innovation

The enormous challenges of this initiative – re-engineering the company’s European treasury function to include an innovative POBO account structure, centralising payables to the SSC and upgrading the treasury workstation – were achieved significantly ahead of schedule. A sixmonth end-to-end project to incorporate SEPA go-live for all euro entities by 1^st February 2014, with a fully integrated solution, has transformed the region into a fully centralised structure incorporating both the EMEA headquarters and SSC.

“The new platform allows new countries and entities to be easily added as the company grows. Users now enjoy global access through a single online platform that delivers a centralised contact point for both submissions and queries,” explains Calabria.