Costco is a membership warehouse club with more than 880 warehouses across the world, of which 611 are located in the US and Puerto Rico and 108 in Canada. It also operates e-commerce sites in the US, Canada, UK, Mexico, Korea, Taiwan, Japan and Australia.
The company’s latest financial figures show reported net sales of US$19.26bn for the four weeks ended 4th August. In 2023, Costco had 316,000 employees.
Costco’s treasury structure is divided into three core teams:
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Operations (sending payments, trading FX, investing excess cash and forecasting – all bank-related functions).
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Systems (technology implementation, system administration).
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Cards (handling all issues relating to card payments in the US).
In a recent Kyriba webinar, Michael Sandquist, Treasury Manager at Costco spoke about how the global retailer is optimising its investment in treasury technology.
“I manage the systems team, whose job is to support the operations team,” he explains. “We work on technology implementations, both domestically for our US team and in terms of trying to leverage some of the technology we are using here in the US in other countries.”
The company uses Kyriba as its TMS and ICD as its main investment portal with automatic integration of deal tickets without the need for any manual input.
“It is very handy to see all the funds that are available to see what is the highest yield, what is potentially good to invest in with excess cash, and what we should redeem or re-allocate from,” says Sandquist. “So switching that around, by looking at what is the lowest yield we are able to see what the different expense ratios between funds are and how that is impacting yield. All the information we could possibly want to know about these funds is available.”
The ability to have money market fund (MMF) investments or redemptions integrate as forecasts as the deal tickets come in automatically instead of manually entering all that information has obvious benefits in term of cash positioning.
The company gets much more instant feedback than having to wait for the intraday to come in and for that to update its cash position, observes Sandquist.
“It is just one less thing we have to worry about, especially if we are doing several investments and there is a day where we are doing a lot of different re-allocations,” he says. “Not having to do any of that work manually and instead getting the updated cash position fairly immediately really streamlines our daily cash process.”
Looking ahead, Costco has plans to further increase the efficiency and automation of its treasury processes by leveraging existing technology.
“There are opportunities in terms of implementing some of the solutions that we are already using in the US in our other entities,” says Sandquist. “But there are also quite a few initiatives domestically that we are looking into. Something it seems like a lot of people already have and we are still looking at is leveraging the bank account management module to help with certain tasks like FBAR filing.”
A US person (including a citizen, resident, corporation, partnership, limited liability company, trust or estate) must file a report of foreign bank and financial accounts or FBAR to report a financial interest in or signature or other authority over at least one financial account located outside the US if the aggregate value of those foreign financial accounts exceeded US$10,000 at any time during the calendar year reported.
“There are quite a few projects on the horizon,” adds Sandquist. “Direct investments for securities is definitely something that we will be looking into and likely be interested in finding out more about.”
