Strategic Treasury

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Treasury & Systems Centralization at USG When USG decided to centralize its treasury operations and systems infrastructure, its relationship with eight different banks involved a large number of manual processes with attendant operational risk and the inability to see the company’s overall cash position until 11 a.m. each day. Additionally, USG needed an increased level of control to comply with the requirements of Sarbanes-Oxley. The author of this article describes how a new TMS was chosen and implemented and summarizes the benefits the system has brought. Future plans include rolling out the chosen system to other geographical locations and further optimization of working capital.

Treasury & Systems Centralization at USG

by Elizabeth Fruin, Treasury Manager, USG

USG’s treasury has seen significant changes since I first joined the business 19 years ago. Until recently, our operations were primarily domestic but the international aspects of the business are now becoming increasingly important. Although USG is still a relatively small player globally, things change rapidly which is why we have taken action to centralize our treasury management, implement a new treasury management system (SunGard’s AvantGard Integrity) and provide a firm foundation for the growth of our business.

Business challenges

The international aspects of the business are now becoming increasingly important.

We had a number of challenges we sought to address when centralizing our treasury operations and systems infrastructure. Most of these related to the number of manual processes which we had in place. We had separate connections to eight banks, each of which we had to log into and then input the data manually. These manual tasks, such as the re-keying of data, created operational risk and lacked control. In addition, because of the time taken to complete these daily tasks, we were not able to see a complete cash position until 11 a.m. each day, which made it difficult to optimize the return on any surplus short-term cash or secure better borrowing rates.

One of the outcomes of this was that we were only able to post to the ledger once a month. Subsidiary businesses too could only reconcile their financial activities monthly. These difficulties have been exacerbated whenever we have acquired a new company, as it has been a challenge to integrate their banks and systems into our infrastructure.

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