Precision in action: liquidity, payments and reconciliation transformation at Mettler-Toledo
Published: Feb 2025
Best Treasury Transformation Project
Highly Commended Winner
Mettler-Toledo
Photo of Sophie Jackson, Treasury Today Group, Raymond Chua, Mettler-Toledo and Melvin Wong, J.P. Morgan.
Sarah He
Head of Asia Finance Shared Service Centre
Mettler-Toledo (MT) is a global leader in precision instruments with a 37-year presence in Greater China. MT operates 17 entities, including manufacturing sites, R&D centres and offices.
in partnership with
The challenge
MT’s Chinese operations account for 19% of sales to external customers and approximately 34% of the global production 2023. The scale and complexity of MT’s operations highlight the sophistication required to address its financial challenges which include:
Manual cross-border transactions – managing a sizeable amount of cross-border and intercompany settlements, MT China dealt with cumbersome manual processes due to stringent Chinese regulatory requirements. The need for physical documentation led to inefficiencies, delays and duplicates in transaction processing.
Inefficient AR reconciliation – MT China served a domestic market with over half of its products, working with thousands of local customers. The manual AR reconciliation process was labour-intensive and error-prone, impacting financial accuracy and operational efficiency.
Liquidity management constraints – MT China’s cross-border cash sweep structure struggled with timely liquidity access from its US headquarters due to time zone differences, leading to occasional working capital shortages and inefficient liquidity management.
The solution
MT undertook a comprehensive transformation to address these challenges.
Streamlined cross-border payments – by participating in China’s Cross-Border Simplification Programme (CSP), MT transitioned to a document-free cross-border payment process. Implemented in July 2024, this solution eliminates manual documentation, enhances transaction efficiency and throughput within a controlled framework.
Automated AR reconciliation – a host-to-host (H2H) integration was implemented, with a virtual reference number (VRN) solution. Each distributor receives a VRN, which is included in daily transaction reports directly integrated into MT’s ERP system. This automation has streamlined AR reconciliation, reduced manual effort and improved accuracy.
Enhanced liquidity management – a customised funding solution allows MT China to access external funding on a same-day, as-needs basis. This fully automated process optimises working capital utilisation and reduces interest expenses, overcoming the limitations of time zone differences.
“Winning the Adam Smith Award Asia is a significant achievement for us, highlighting our commitment to excellence in Corporate Treasury and our innovative efforts to enhance capital liquidity and operational efficiency. This recognition motivates us to continue refining our daily practices and striving for even greater success.”
Sarah He, Head of Asia Finance Shared Service Centre
Best practice and innovation
MT has demonstrated exemplary leadership in terms of innovative practices in treasury transformation. The solution including cross-border payments, a virtual reference number (VRN) system and H2H connectivity has revolutionised MT’s operations.
To address liquidity constraints, the funding solution is customised, providing same-day access to external funding and optimal working capital management. These innovations resolved MT’s operational inefficiencies and set a new standard in financial operations, demonstrating industry-leading practices.
MT has been able to reduce time spent on AR reconciliation and supporting documents preparation for cross-border transaction, that would otherwise have required manual intervention. Turnaround time for cross-border transactions is reduced to one business day from three to four working days previously, freeing up one FTE across its organisation. With the simplified cross-border processes, MT is now able to eliminate approximately 10,000 pages of physical documents annually. With the automated funding solution, MT China can free-up onshore working capital funding needs and mobilise surplus liquidity to support global operation, achieving significant savings on interest fees each year at a group level.
Key benefits
Risk mitigated.
Process efficiencies.
Manual intervention reduced.
“Crucially, we gained access to the exclusive Cross-Border Simplification Programme (CSP) authorised by China’s State Administration of Foreign Exchange (SAFE). This privilege, granted to only a few companies annually, enables us to process cross-border payments without requiring physical documentation,” explains Sarah He, Head of Asia Finance Shared Service Centre.
Felix Hu
Managing Director, Co-Head of Subsidiary Banking, China, J.P. Morgan
Mettler-Toledo (MT), a global leader in precision instruments with US$3.8bn annual revenue, has demonstrated exceptional innovation in transaction management, particularly in its complex operations in China. We are very proud to have supported their exemplary leadership in delivering innovative practices in treasury transformation. We look forward to identifying more ways to add value for our clients.
in partnership with
The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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