Best in Class Treasury Solution in India Highly Commended: Louis Dreyfus Company India Pvt Ltd

Published: Jan 2020


Photo of Aziz Parvez, Bank of America and Vinit Mishra, Louis Dreyfus Company India Pvt Ltd.

Vinit Mishra

Head Treasury – India

Gurgaon, India

Founded in 1851, Louis Dreyfus Company is a pioneer in the agricultural trade. Since establishing a presence in India in 1997, it has played an active role in the country’s agricultural trade. Its activities in India have grown to include three business lines – grains and oil seeds, coffee and cotton – along with processing assets, commercial offices and a shared service centre.

in partnership with

SWIFT and virtual account hybrid solution for effective treasury management

The challenge

For such a large entity operating across a range of sectors, Louis Dreyfus Company (LDC) India had a growing need to improve the way payables and receivables were being managed across each part of the business. The company also wanted to reduce the number of bank accounts being operated and gain efficiency over its cash management activities, as business execution within a limited time period is key to maintaining a leading position in a highly competitive and evolving commodity industry.

The operation of a large number of bank accounts with multiple banks, due to diversified business and geographical presence, was proving to be costly and inefficient, riskier due to the increased threat of cybercrimes, and was not providing the treasury team with adequate visibility over their cash flows.

“We wanted to introduce a system that offered a more seamless and integrated process, while still allowing us to segregate transactions at a business unit level,” says Vinit Mishra, Head Treasury – India.

The solution

LDC India partnered with Bank of America for its cash management which included SWIFT connectivity through an internal payment factory solution (TRAX by FIS) along with virtual accounts.

These virtual accounts could be used by each business unit for inward and outward transactions, but the actual debits and credits made would still pass through LDC India’s main current account.

Simultaneously, LDC India implemented a master data management solution to secure, standardise and centralise counterparty details including bank account details for ensuring accuracy and seamless integration of payment requests from the front-office and accounting system to TRAX, hence removing all manual intervention and enhanced controls.

Switching to SWIFT helped to communicate securely with banks for exchanging payment requests, advices for payment and collection and bank statements, resulting in huge efficiency gains and increased confidence in running the treasury operation.

The decision to switch to SWIFT was due to the company’s need to digitise and speed up its payments and collections processes. Fast, efficient and accurate payment processes are essential when operating in the agricultural commodities market. Being able to make speedier payments will help LDC India further strengthen its position as a reliable buyer in the agri-trading sector, as well as enable it to take advantage of the early payment discounts on offer from suppliers. Implementing a virtual account solution backed by SWIFT connectivity has enabled LDC India’s treasury team to improve its ability to track payment receipts, automate reconciliation and increase cash flow visibility.

Best practice and innovation

The hybrid solution proposed by Bank of America includes use of virtual accounts for both collections and payments, features innovative customisations to its SWIFT messages, and provides integration with LDC India’s treasury and accounting system, which is needed for seamless information flow and meeting its specific business requirements.

Key benefits

  • Reduced processing time.
  • Able to manage a higher volume of payments.
  • Quicker processing of delivery orders.
  • Reliable payer and supplier confidence.
  • Enhanced payment security.
  • Automated bank reconciliation.

“While LDC India works with more than 15 leading banks in India including foreign and local banks, we believe the innovation and benefits of the implemented hybrid Bank of America solution is ground-breaking in the cash management space, especially in the Indian market,” concludes Mishra.

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