Once Delivery Hero had strengthened its treasury team it wanted to focus on centralising liquidity and control to improve the company’s cash management. A detailed three-year plan was mapped out to support the company’s growth strategy. The treasury team began by working with local teams in MENA. Their goal was to gain a deeper understanding of the company’s existing banking structures and general operations in the region as well as pertinent local market regulations.
With this knowledge, the company was able to issue a request for proposal (RFP) for a new cash management bank for its entities in Oman, Bahrain, Qatar, Egypt and Saudi Arabia.
The treasury team initially chose HSBC as a key banking partner in two of the countries, but the relationship quickly expanded and by 2020 covered the entire region representing some 40 separate entities.
By the end of 2020, Delivery Hero had centralised 26 of 30 payments accounts in MENA. The majority of receivables in the region come from card payments, with merchant acquiring handled by local banks.
Both HSBC and local bank accounts were added to the bank’s online banking platform. This gives Delivery Hero’s global treasury in Germany 100% visibility into account balances for all its entities in MENA.
A new payment workflow has been established where HSBC accounts have been opened. With this, a local entity:
- Prepares payment files and uploads them to the bank’s platform manually or via secure FTP.
- Regional Finance Management team reviews and releases the payments for execution.
- Treasury in Germany acts as a backup to the Regional Finance Management team.
This ensures a smooth daily operation in the region and avoid any delays in paying out to its restaurants partners and riders (also called HEROES).
In certain countries that are not yet using XML file formats, Delivery Hero uses file mappers for bulk payments. The company already uses SAP in Germany, so its longer-term objective is to continue streamlining this process by implementing SAP’s treasury module and multibank connector.
Best practice and innovation
The strength and experience of the new treasury team was paramount for this transformation. By carefully consulting with local entities in MENA and articulating its vision before embarking on the project, it won the buy-in of stakeholders from the start – a critical component to their success. The outcome of these discussions was a three-year plan that clearly mapped out their key objectives.
As a lean treasury team supporting a business whose historically fast growth was only fuelled by the pandemic; they remained singularly focused on achieving everything before moving onto other initiatives. As a result, Delivery Hero has achieved what it set out to by improving visibility with a much clearer picture of total cash in the region including day-to-day transactions and movements. This is key to supporting the company’s existing entities, but also ongoing acquisitions.
“Having fulfilled our three-year plan, we will use this success as the foundation for future innovation. This includes centralising liquidity management, speeding payments to enable the daily movement of cash from local acquiring banks and adopting APIs for enhanced connectivity as well as exploring avenues for mobile collections across the region,” explains Khaled Al Faqsh, CFO – MENA (Kuwait).
- Rationalised and optimised banking relationships.
- Improved visibility and control with standardised information available via a single online banking platform.
- Enhanced efficiency to create dynamic, scalable processes to accommodate the company’s continued expansion.
The Adam Smith Awards is the industry benchmark for best practice and innovation in corporate treasury. The 2021 Awards attracted a record-breaking 309 nominations spanning 40 countries. To find out more please visit: https://treasurytoday.com/adam-smith-awards.