As Yuexiu Group pushes forward with its international expansion, managing cash has become much more complex. With numerous business units and each subsidiary handling its own accounts and payments, operational costs have soared. The difficulties of managing cross-border funds and currency risks have increased financial management complexity and costs. The headquarters struggles to effectively manage and control the local settlements of its overseas subsidiaries, dealing with poor visibility and control over subsidiary bank accounts. This issue impacts the efficient allocation of financial resources. Furthermore, currency fluctuations, delays in cross-border payments and liquidity problems add to the financial management challenges in an international context.
The solution
Yuexiu Group’s partnership with Bank of China (Hong Kong) Limited (BOCHK) represents a key innovation in managing its finances. The strategies employed to tackle these challenges include:
Creation of a Corporate Treasury Centre (CTC) – Yuexiu Group set-up a centralised treasury centre operated by Yuexiu Enterprises (Holdings) Limited, which oversees more than 150 member companies. This centre centralises cash flow management and improves cost control and fund efficiency through precise cash flow forecasting and optimisation strategies.
Development of a shared treasury platform – with support from BOCHK, Yuexiu Group has established an integrated treasury platform. This platform streamlines account monitoring, fund collection, allocation, payment settlements, overseas investments, financing and risk management. This allows Yuexiu Group to track global fund movements in real time, enhancing transparency and efficiency in financial operations.
Digital transformation – BOCHK has provided advanced API interfaces to support Yuexiu Group’s shift to digital financial management. These APIs enable real-time transactions and queries, cutting down delays from traditional batch processing and improving operational speed and accuracy. This digital upgrade not only refines data handling but also boosts risk management capabilities.
Best practice and innovation
As Yuexiu Group continues its digital transformation journey, it remains dedicated to adopting best practices. The company has not only refined its existing treasury management platform but has also driven innovation through continuous updates and improvements.
In the past year, BOCHK has rolled out six key API applications for Yuexiu, including new interfaces for fixed deposit enquiries and bill issuance. These upgrades have greatly enhanced system responsiveness and operational efficiency, allowing Yuexiu to monitor and manage its financial activities in real-time. The fixed deposit enquiry feature, a first in the industry, enables direct data exchange between systems, eliminating the need for manual processing and reducing delays, which boosts the accuracy and timeliness of financial data.
Yuexiu has integrated advanced data analysis tools to further improve cash flow forecasting and risk management, providing strong data support for future financial decisions. These steps not only highlight Yuexiu’s proactive approach to digital transformation but also offer valuable lessons for other companies exploring digital innovations in cash management.
Key benefits
Cost savings.
Headcount savings.
Process efficiencies.
Increasing return on investment (ROI).
Increased automation.
Risk mitigated.
Improved visibility.
Number of banking partners/bank accounts reduced.
Increased system connectivity.
Yuexiu Group’s CTC stands out in Asia for its centralised, comprehensive and digital approach. This solution integrates key areas like account management, fund collection and risk management into one seamless platform.
“As a result, we have boosted efficiency and returns while ensuring data accuracy, significantly cutting down on time, costs and manpower. This success highlights our innovative edge and forward-thinking strategy in financial management,” says Xie Bin, Treasury Director.
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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