The ultimate goal was to eventually establish greater visibility and control of cash flows and effectively utilise the excess cash across entities through a structured liquidity management solution.

Greater visibility and control of cash flows were key goals in this project

The challenge

A key objective for the central finance function was to improve its cash flow efficiency for the entire group covering 18 business units including real estate, schools, hotels and leisure. The ultimate goal was to eventually establish greater visibility and control of cash flows and effectively utilise the excess cash across entities through a structured liquidity management solution. Below are some of the key elements that Aldar was looking to address:

• Operationally cumbersome and manual processes for group entities having multiple ERPs.
• Reducing the number of bank accounts for its operations.
• Lack of transparency of bank accounts and balances.
• Rationalising banking relationships for cash management.
• Liquidity management.
• Higher returns on its bank balances and better commission rates on credit card transactions.
• New age solutions for domestic payables and receivables management which will result in doing away with manual workarounds and address delays in execution.

The solution

Below are the key objectives that were achieved by this implementation:

• Liquidity management

  Through cash concentration solution which enabled cash pooling providing higher returns on total balances.

• Payables

  Multiple integrated channel via host-to-host connectivity for processing payments initiated and approved in Oracle, delivered by a secure channel and processed by ADCB’s pro-cash system.

• Receivables management 

  Comprehensive solution covering usage of cheque scanners, post dated cheques management, deployment of smart cash deposit solutions, integrating the point-of-sale (POS) and online gateway channels.

• Bank account reconciliation

  Automated STP reconciliation tools, providing greater visibility and control on card-based collections at a group level.

• Escrow

  One of the unique combinations covering advisory services through a dedicated desk, reconciling receivables, timely payables management, well-established operational model to meet the regulators requirements.

• Reporting  

  Single window visibility of all cash management, trade finance and treasury products providing transaction and deal life-cycle workflows along with audit trails.

The RFP was managed by Aldar’s treasury team who worked meticulously and undertook the task of producing and releasing a comprehensive RFP, followed by a detailed evaluation, review and selection process of the banks invited.

Ali Sabry, Executive Director of Finance, says: “By having a fully integrated comprehensive cash management solution we will achieve our objective to optimise our cash management function for better control, efficiency, reduce costs and increase earnings. We have worked hard to ensure that this step will add value to all stakeholders.”

Best practice and innovation

The innovative approach brought in efficiency for Aldar’s multi-entity liquidity, payments and cash management processes. The notional pooling solution gained global cash visibility and optimised liquidity usage, giving better returns. This complex treasury structure consolidates payments with efficient funding, concentrates company cash at the group level and disburses funds at a local entity level, which have been designed to minimise workarounds on physical funding requirements.

Ali Sabry concludes, “The bank comprehensively covered all our requirements and went beyond the offerings by training ‘on the ground’ teams. The implementation was seamless and the results are evidently visible which makes this partnership a unique one.”