Vossloh-Schwabe’s decision to restructure its treasury from a decentralised model to a centralised function made a review of the methods it used to gather treasury information essential.

Problem…

“We needed to improve our view of cash activity and liquidity across all our subsidiaries, particularly the flows in and out of our euro currency cash pool” explains Vossloh-Schwabe’s Treasurer, Beate Schroeder. “We wanted to be able to classify payments, such as inter-company, third-party supply and tax refunds, and link these to the cash flows so that we could optimise our analysis of forecasts versus actual results. We also wanted detailed inter-company interest statements, and to be able to apply the appropriate interest rates and transfer pricing terms to our different company entities. Achieving all this was impossible with the Excel database we were using.”

Vossloh-Schwabe also had its regulatory obligations to consider. Its parent company, MEW Group, is listed on the New York Stock Exchange. Therefore, it was important to have adequate financial transparency and treasury controls to comply with Sarbanes-Oxley.

The company needed a solution that would make it easier and quicker to gather accurate information, deliver the detail necessary to support financial analysis and decision-making, and provide the tight control essential for managing its treasury operations.

…Solved

Vossloh-Schwabe prepared a long list of requirements and held several presentations to review the solution options available. They were immediately impressed with Commerzbank’s TREASURY. Schroeder says, “We already had a relationship with Commerzbank having used their Treasury Cockpit, but the functionality on that was very limited. So when I saw their new TREASURY system and all its features I thought it was fantastic. I realised straight away that it was going to help me in my work – and it has.”

TREASURY is a web-based system which means Schroeder and her treasury colleagues can access the information they need wherever they are in the world, as long as they have an internet connection. Its administration capabilities ensure that access is secure and controlled, so that users see only the information they are authorised to view – crucial for segregating duties between front and back office operations. As it is a single database, information is entered only once (with appropriate authorisation workflows), avoiding the duplication of tasks across the company.

Schroeder is particularly pleased with TREASURY’s financial reporting, which has delivered the classification capability the company required. “The design of the report templates is very user friendly,” Schroeder says. “I can customise these to a layout of my choice. I can separate cash inflows and outflows by customer, identify inter-company netting and clearing activities, and run intercompany interest statements for the cash pool and interest statements from banks. TREASURY’s tools ensure everything is properly reflected in our cash flow planning.”

TREASURY retains a complete history of all daily transactions and dealing activity, including money and foreign exchange deals, intercompany loans, third-party loans and deposits. Market interest rates and currency exchange rates are provided automatically on a daily basis.

Implementing Commerzbank’s TREASURY has enabled Vossloh-Schwabe to exercise greater control over its treasury operations. “The next step is automatic inter-company netting,” says Schroeder. “We currently use another provider for this but Commerzbank plans to introduce the capability on to their TREASURY platform. When they do, we’ll move our inter-company netting to them so that we have a single system delivering all of our main treasury requirements.”