How total digitisation optimised Flour Mills of Nigeria’s daily treasury processes
Before Flour Mills of Nigeria (FMN)’s adoption of CitiDirect BE – Citibank’s web-based banking platform – the company’s payment process was largely manual because the impact of the company’s use of two individual bank payment platforms on its treasury management processes was minimal and did very little to introduce any form of efficiency to the company’s process. It was administratively onerous to have an overview of all the bank balances across FMN Group on a daily basis. As a result, there was lack of transparency and control over working capital flows, which resulted in increased risk of fraud, significant amount of time spent managing positions across banks and high financial expenses.
There were many approvals done manually and, in some cases, letters would be physically taken to signatories at locations outside the office to be signed, before being dispatched to the processing banks for authorisation to release the funds. To complicate the situation further, the Group had over 300 bank accounts across the country and it was expectedly difficult to manage them efficiently under the then-existing conditions.
In 2018, FMN implemented CitiDirect BE (including multi-banking capabilities) to digitise its treasury operations in the following ways:
Automate the account information/reporting retrieval process.
Automate payments and reconciliation of collections and payments.
Consolidate all banking payment processes in one secure electronic platform.
Provide centralised real-time access to account information (from a computer or mobile device).
Implement cash pooling across FMN Group.
Enable transfers across FMN bank accounts or to external beneficiaries in an efficient manner from a single front-end.
Its objectives included substantial cost savings through a reduction in financial charges, and working capital optimisation. It also sought improved security and control, operational efficiency, and improved reporting (to enhance and speed-up decision-making). The solution had to be easy to deploy across the FMN Group, and cost efficient.