In an effort to simplify, streamline and create a more effective treasury operation in China, global steel wire company Bekaert looked to leverage its shared service centre (SSC) more resourcefully.

As Bekaert’s business in China has increased, the treasury department has had to manage a gradually increasing workload.

A large majority of this work, however, was administrative in nature and diverting the core treasury team’s attention away from more value-adding work.

“The treasury team at Bekaert has a very lean structure and should be focused on engaging with the business and looking to facilitate further business growth by delivering value-add solutions,” explains Judy Yao, Regional Treasury and Risk Manager at Bekaert. “We are therefore continuously looking for ways to simplify our processes and drive efficiency through the reduction of administrative work.”

Strategic objectives

One area in particular that Yao and her team saw a great opportunity to drive efficiency and reduce the administrative burden on the core treasury team was shifting those repetitive processes to the company’s shared service centre (SSC) in Jiangyin, China.

Rather than simply move the processes over in the current form, the Bekaert treasury also saw this as an opportunity to map out its operation and challenge what it was doing in an effort to further optimise the operation.

In particular, corporate treasury’s primary objectives were to reduce transaction costs; improve cash visibility and release trapped cash by simplifying the account structure; and improve cash flow forecasting accuracy by centralising its payment and collection processes.

In action: shifting process

Yao and her team knew that achieving their objectives wouldn’t be straightforward, with both internal and external challenges to overcome.

“First and foremost, we had to make sure that the regulatory environment permitted us to do what we wanted to,” says Yao. “There were a few question marks about the centralisation of our payments and collections, FX activity and also reporting, given that a lot of treasury work was now being done remotely.”

The team also made sure that the company itself was fully supporting the project, especially the SSC leadership and other departments such as tax and legal, but also sales and procurement. Together they created a framework for the efficient processing of payments and collections as well as the implementation of best in class SSC protocols to address any potential issues in a timely manner.

Stronger foundations

By gradually shifting the administrative work away from the core treasury and into the SSC, the treasury department has been able to optimise its processes.

Moreover, by using this as a platform to challenge its existing processes, the programme has also been an enabler to strengthen the role of treasury within the company, enabling it to deliver added-value to the business.

Bekaert has achieved savings in releasing trapped cash costs, as well as improvement in working capital.

This year Bekaert’s regional treasury team is looking to leverage new digital solutions to further automate liquidity management, and enhance the cash flow forecast process.