Froneri’s compact treasury team has seen its productivity and business value increase massively through the carefully-planned introduction of a treasury management system.

Through acquisition and joint ventures, ice cream company Froneri now has operations across 24 countries and turnover in excess of €4bn. The treasury team manages 17 different currencies and the company maintains an in-house bank model across all those countries.

The company was formed in 2016 as a joint venture between R&R and Nestlé – before which there hadn’t been a need for a dedicated treasury department, explains Head of Treasury, John Meehan.

“I joined in 2018 and felt it was important to get the basics right before we implemented the treasury management system,” he recalls. “We were a team of just two before we implemented the TMS and everything was being done manually on Excel, which meant we only really had the bandwidth to consolidate our position twice a month. Froneri’s strategy was to remain lean, so the idea was that the system would allow us to spend more time on value added tasks and less time on crunching the data.”

The new system had to be SaaS-based for speed of access and since the team only consolidated twice a month, full cash visibility every day was also important.

“We wanted one version of the truth and one place to login,” says Meehan. “Where we were previously logging into multiple banking platforms we how have a hundred people across the business logging into the TMS for their information.”

Other objectives were to automate the cash flow forecast process and increase control over payments through an end-to-end automated process.

“Because of the integration and acquisitions we had a huge number of banks and bank accounts and I knew that selecting some core banks for the TMS would drive the businesses to concentrate on those banks and allow us to close the legacy accounts we didn’t need,” says Meehan.

Stephen Logue, Director Strategic Relations at Kyriba, explains that once it had been established that this was a transformational project, the team started developing a governance structure to establish responsibilities and executive sponsorship.

On the theme of executive sponsorship or management buy-in, Meehan says having a third party (KPMG) conduct a benchmarking exercise and observe that the company would benefit from implementing a TMS was helpful – as was the treasury team’s track record of generating value with modest resources.

“In terms of the business case, we looked at the payback and it was not only in terms of certain fees that we could save money – there were also productivity savings,” he says. “The key element was how we could improve liquidity by reducing idle cash around the business. KPMG helped us lay the groundwork and we also had assistance from Kyriba, which was really helpful for us to think about all the different areas where we could see productivity gains and savings.”

Despite only increasing in number from two to three, the treasury team has been able to take on a lot more responsibility for the business and become a crucial support function. The company now has almost full cash visibility, which has allowed it to close dozens of accounts and make a major debt repayment this year.

“Among our customer base we have found that at the process level, automation saves about 70% of the time spent on manual processes and gets them close to full cash visibility,” says Logue.

Following the joint venture and subsequent acquisitions, Froneri was working with 37 banks across hundreds of bank accounts, adds Meehan. “The CFO wasn’t very happy with that, but now he gets a daily report.”

Looking ahead, the focus is in increasing the volume of real time data and getting more transaction reports into the system.

“We are also looking at virtual accounts,” concludes Meehan. “The important thing is we have the infrastructure in place and the tools available to us to integrate much more efficiently – the TMS allows us to have that plug-and-play integration moving forward.”