American Honda is a subsidiary of Honda Motor Company in Japan, the eighth largest carmaker by 2023 revenue and a major manufacturer of motorcycles and power equipment.

With 12 manufacturing plants and 31,000 employees across the US, American Honda works with 620 OEM suppliers and exports to 90 countries. A treasury team of four supports its critical financial decisions and rely heavily on solution and technology vendors.

Speaking in a webinar on improving liquidity management, Kim Kelly-Lippert, manager of treasury operations at American Honda explained that from an investment perspective, the company relies on systems from Kyriba and ICD not only for visibility of its cash, but also to help it execute the trading of its funds.

“Safety, liquidity and yield is the order of our investment strategy,” she said. “We invest most of our cash in government money market funds and much of the monitoring we do is done right on the trading screen. We also have compliance rules, preset alerts and some trade restrictions that are already set through the portal.”

American Honda’s portfolio is extremely liquid for both monthly OEM payments and to fulfil the role of the company’s global liquidity provider. Each day begins with actual and forecasted cash flows already populated, which gives the company its cash position for the day.

“For both the treasury workstation and the portal, we have all of the screens customised so that we can easily access current yields and make our investment decisions accordingly,” said Kelly-Lippert. “The systems provide us with the opportunity to perform all the trading and reporting we need to satisfy our investment objectives and present results to management.”

This year’s interest rate hikes and turbulence in the US regional banking market have emphasised the importance of visibility and transparency of the company’s investment holdings in helping treasury respond to queries from management.

Kelly-Lippert explained that before she joined American Honda, the treasury team was trading money market funds directly through each of the individual fund portals or websites and entering all the trades in another treasury workstation which didn’t have an instrument to track the funds adequately.

“The first step towards a better workflow was to begin trading all of the funds through the ICD portal,” she said. “Shortly afterwards we did an extensive RFP and demos from Kyriba and another treasury workstation and after analysis the team decided that the Kyriba solution met our needs.”

Since the integration, when the treasury team trade through the portal, the net results of its purchases or redemptions appear automatically in the cash position worksheet, as well as in its financial transaction module. The trade tickets and fund positions are also updated automatically from the interface file.

“There are a variety of reports that we can access through the portal and a few that we use on a regular basis,” said Kelly-Lippert. “In addition to that, we have reports that we use on a daily basis to confirm the cash and liquidity that is available to us as well as our compliance and making sure that we are staying within our investment guidelines.”

Users can capture data on company holdings for portfolio management and have access to fact sheets, historical data and prospectuses from the trading screen. The treasury team benefit from single sign-on and also have an API which enables the result of each trade to be captured in the cash position worksheet (as well as all of the details in the transaction financial module) within minutes of the trade being placed.

“The integration between Kyriba and ICD has made our small group even more efficient and both partners have certainly helped us along the way,” concluded Kelly-Lippert.