Northeastern Ohio Treasury Management Association November 13, 2013, Independence, OH Phil Mattes, Treasury Strategist, Kyriba: Groupon Treasury - Adventures in Cash Management Best Practices While Building a New Treasury Department
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![Headwinds for Today’s Financial Professional
Financial leaders are challenged:
Market volatility and uncertainty has
forced sensitivity towards liquidity
Shareholders demand growth
Staying ahead of competitors requires
agility and investment
Global expansion adds complexity and
risk
Increasing regulatory compliance: new
regulation every 22 days [Financial
Times, 2013]
© 2013 Kyriba Corporation. All rights reserved.
|
PRIVILEGED & CONFIDENTIAL
2](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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Similaire à Northeastern Ohio Treasury Management Association November 13, 2013, Independence, OH Phil Mattes, Treasury Strategist, Kyriba: Groupon Treasury - Adventures in Cash Management Best Practices While Building a New Treasury Department
Similaire à Northeastern Ohio Treasury Management Association November 13, 2013, Independence, OH Phil Mattes, Treasury Strategist, Kyriba: Groupon Treasury - Adventures in Cash Management Best Practices While Building a New Treasury Department (20)
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Northeastern Ohio Treasury Management Association November 13, 2013, Independence, OH Phil Mattes, Treasury Strategist, Kyriba: Groupon Treasury - Adventures in Cash Management Best Practices While Building a New Treasury Department
- 1. Groupon Treasury : Adventures in Cash Management Best Practices
- 2. Headwinds for Today’s Financial Professional Financial leaders are challenged: Market volatility and uncertainty has forced sensitivity towards liquidity Shareholders demand growth Staying ahead of competitors requires agility and investment Global expansion adds complexity and risk Increasing regulatory compliance: new regulation every 22 days [Financial Times, 2013] © 2013 Kyriba Corporation. All rights reserved. | PRIVILEGED & CONFIDENTIAL 2
- 3. A New Approach Proactive | Treasury | Management Optimize Your Cash + Manage Your Risk Perfect your treasury operation Protect organizational value = Work Your Capital Create business value • Establish cash certainty • Execute risk strategy • Gain strategic insight • Make effective financial decisions • Improve financial control / avoid fraud • Accelerate business growth • Enable and execute payments • Deliver compliance • Maximize financial returns © 2013 Kyriba Corporation. All rights reserved. | PRIVILEGED & CONFIDENTIAL 3
- 4. Proactive | Treasury | Management Cash is the lifeblood of the organization. Anticipate, plan and initiate change rather than react to events. © 2013 Kyriba Corporation. All rights reserved. | PRIVILEGED & CONFIDENTIAL Strategic execution. 4
- 5. Speaker Bio Phil Mattes - Treasury Strategist, Kyriba • Phil has over 15 years of consulting and corporate experience in treasury. He began his treasury career as a Treasury Analyst at the New York City headquarters of the global oilfield services firm, Schlumberger. He then spent more than 8 years with the corporate treasury consulting practice of PricewaterhouseCoopers. Feeling the pull of the corporate world again, he joined CareerBuilder LLC in Chicago as the Director of Treasury to establish their corporate treasury function. Mostly recently, Phil was the Global Director of Treasury for Groupon Inc. © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 5
- 6. Agenda • Groupon Overview • Cash Management • Security and Control • Banking Infrastructure • Account Visibility • Cash Forecasting • Liquidity Optimization © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 6
- 7. Groupon Overview • Founding Fathers: Andrew Mason (The Idea) and Eric Lefkofsky (The $$) • Established in Nov 2008 – offshoot of “The Point” social organizing website. • Growth: In Dec 2010, Forbes estimates Groupon will reach $1 billion in sales faster than any other company and Google’s $6 billion offer rejected. Multiple acquisitions resulting in operations in 45 countries. • Challenges – Easy to copy business model, over sold merchants, accounting missteps (revised S1 statements, multiple revenue restatements), failed Super Bowl commercials, failed China launch, manual processes, immature systems, delayed system integrations, executive turnover, etc. • Cash Flows – Merchant payment terms US vs Intl. Nov 2011 IPO raises $700 million. • Culture – Entrepreneurial, chaotic, fast paced, informal, quirky CEO © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 7
- 8. Groupon Overview © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 8
- 9. Value Creation Hierarchy Liquidity Optimization Cash Forecasting Account Visibility Banking Infrastructure Security and Control © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. • Maintain database of signer and bank account information • Rationalize signers and directors • Use bank products that enhance security (positive pay, etc.) • Centralize security administration • System enforced delegation of authority • Policy documents clearly outline roles and responsibilities 9
- 10. Value Creation Hierarchy Liquidity Optimization • Rationalize number of banking partners Cash Forecasting • Reduce number of bank accounts Account Visibility • Optimize services • Automate analysis of fees Banking Infrastructure • Conduct bank reviews on a periodic basis Security and Controls © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 10
- 11. Value Creation Hierarchy Liquidity Optimization Cash Forecasting • Automate connectivity to banks for electronic statements • Leverage abilities of a treasury management system To consolidate information Account Visibility Banking Infrastructure Security and Controls © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. To assign reporting categories to transactions • Make it easy for executives to get the information they want (dashboards, executive summaries, etc.) 11
- 12. Value Creation Hierarchy • Executive support Liquidity Optimization Cash Forecasting Global visibility Banking Infrastructure Security and Controls © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. • Collaboration with information sources • Communication of roles, responsibilities and process • Information systems/integration to support the process • Measurement of accuracy and feedback to sources. • Incentives for improvement 12
- 13. Value Creation Hierarchy Liquidity Optimization • More strategic investment of cash Cash Forecasting • Repayment of debt • Maximization of earnings credit Account Visibility • Use of supply chain discounts Banking Infrastructure • Overall improved ability to plan future uses of cash. Security and Controls © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 13
- 14. Q&A
- 15. Kyriba Contacts Phil Mattes Treasury Strategist | Kyriba Phone: (312) 909-1707 phil@kyriba.com Phil Dregalla Enterprise Sales Executive | Kyriba Phone: (412) 260 3385 pdregalla@kyriba.com © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 15
Notes de l'éditeur
- As a treasurer, CFO or finance professional, you and your organizations are confronting numerous headwinds, particularly since the great recession of 2008/2009… and your organization needs to be agile, and have the visibility to best confront these challenges. Volatility is the new normal.These challenges include the following…
- Kyriba helps organizations face these challenges proactively, and that’s why this approach is known as Proactive Treasury ManagementOrganizations can think about this equation to succeed in PTM: Optimize Cash + Manage Risk = Work Your CapitalOur proven methodology (working with 700+ global clients) shows that by following these steps, businesses are better prepared to confront treasury risks and create value within their organizations.By working your capital, Treasury provides business value in areas such as:Shared service modelForecasting economic changeSupply chain optimizationSales enablementM&A analysisMarket expansionBusiness intelligence(see the Treasury Mandate white paper from Kyriba to find out more).
- So, in sum, Kyriba is your best partner to enable strategic Proactive Treasury Management. We have done so with over 700 global clients who rely on Kyriba for our world class software and client success methodology that ensures their success.Proactive – it’s about anticipating, planning and initiating change, vs. just reacting to eventsTreasury – your job is to protect, leverage and maximize your cash and liquidity, and Kyriba will help you do that, all while reducing risk and increasing compliance.Management – Kyriba helps you to be a strategic partner to your business, providing the insight to make the best financial decisions. It’s not about automation, it’s about creating business value with PTM.
- I joined Groupon in FEB 2011 Groupon was still building out it’s corporate teams and infrastructure: there was no general counsel or tax department…..and they were in the process of selecting and rolling out a global GL system. I was hired as the first treasury resource in the company with the mandate to build a global treasury function. Eventually hired 3 people in Chicago and 3 people in Schaffhausen Switzerland.
- Complete list of bank accounts and signers did not exist. Didn’t even know who the right finance contacts where in each country. Initially collected information into Excel…then migrated data into Kyriba. Audit and FBAR made much easier Huge number of bank account signers and directors of legal entities. Essentially only the local employees could control the accounts. Teamed with Tax/Legal to centralize control with small group of finance executives. Huge benefit to have participation of a legal resource.Similar situation with security administration…all done locally and corporate did not have any control.Payment approvals were all being done by email and were incredibly difficult to track and audit. Decided to use the banking portals to enforce the DOA. Not ideal but was the best option available. Groupon needed a document management/payments workflow system…but the ERP did not have this capability. Created policy document to communicate “the rules” related to bank accounts so that everyone involved with using accounts was aware of them….even if we were still in the process of implementing improvements and centralization. Segregation of duties was an issue. Dual authorization was not consistently enforced. Approvals were not documented (even in emails). Definitely a change in mindset from being a local, small, entrepreneurial company, to being part of a global public company.
- Example: When I joined Groupon, it had 50+ banks globally. Defined requirements by country, traveled to the regions to meet the local resources and explain the goals of the project. Conducted a global bank RFP and reduced banks to three primary relationships (Europe/Asia, Latin America, US/Canada). Note that Groupon did not have any credit relationships….which added to our flexibility. Also only opened minimum number of accounts when migrating to the global banks. First two are probably the classic suggestions with talking about banking infrastructure. You can be more efficient and reduce costs by rationalizing you banks/accounts. You can also sometimes increase your negotiating leverage by giving more business to fewer banks. Again there is a balance….you don’t want to have just one bank for all services. You want to make sure you have backup options. This could be eliminating services you don’t use (information storage, reconciliation services, etc.)….or using additional service that could make you more efficient or effective. (outsourced check printing, card programs, investment sweeps, ZBA structures, Pooling structures, etc.). Do the detailed analysis to know exactly what bank services make sense for you. At a certain level of complexity it becomes too difficult and inefficient to analyze you bank fees based on paper statements and excel. There are systems based tools to import a electronic analysis file (EDI822), analyze you actual bank activity and compare your agreed upon fees to what you are actually being charged.Good practice in managing your relationship with your banks.
- Example: Implemented Kyriba to obtain global, daily visibility. Previously only had a monthly visibility (email/spreadsheet/manually rekeying of balances). This was before consolidating banks, so we had 50+ banks reporting to the system. Developed a daily executive cash summary that was distributed to the CFO and small group of senior finance executives. No other finance reporting was done on a daily basis (such as GL) so executives relied heavily on this report to detect changes in the business.
- This might be one of the most challenging parts of cash and this is an area that was still “under construction” when I departed Groupon. Progression from none (crisis based) to adhoc (we’ll run out of cash next week)…to more proactive communication (several weeks notice). Debate on who should own…FP&A…due to their existing processes and reporting structure…or Treasury…as owner of the bank accounts. And there was a chronic lack of resources to perform any new reporting.
- This might be called the “holy grail” of cash management. When all the people, processes and systems are working together to enable optimized decision making…while maintaining strong controls, operating an efficient banking infrastructure and automating manual processes.