Standardised Bank Account Management in a Changing Environment
by Stacy E. Cordier CTP, Assistant Treasurer, Thermo Fisher Scientific
Thermo Fisher Scientific (‘Thermo Fisher’) has developed its market-leading position through a strategy of organic growth enhanced by mergers and acquisitions (M&A) with companies that enrich and expand our service offering to customers. The company itself is the result of a merger four years ago between two conglomerates, which themselves had grown through M&A. During 2010 so far, the company has made seven acquisitions, each of which comes with its own accounts, bank relationships and cash management structures.
The need for stability and visibility
With so much complexity and frequent change, a few years ago we recognised that we needed a better solution than simply spreadsheets to manage the ever-increasing number of bank accounts, together with mandates and authorities on each one. While bank account management was easier in the United States, as we had already started consolidating bank relationships, we were reliant on local finance teams in other regions to advise us of bank account signatories on a large volume of accounts. Inevitably, reporting was sporadic and our processes and bank account inventory were not easy to audit. Furthermore, with 15 treasury personnel across four locations, it was difficult to maintain a single point of access to information. We do not use a treasury management system at present, although we use Chesapeake’s treasury workstation for US cash positioning and an in-house system for bank balance reporting globally. Our in-house system is not integrated with our electronic banking systems.
Identification and implementation
We had an existing relationship with the Weiland Financial Group (‘Weiland’), as we used their Bank Relationship Manager tool, BRMEdge™, for account fee management. We were aware that the company also provided bank account management tools (BRMWeb) and services. We therefore made the decision to extend our relationship based on our confidence in Weiland as a trusted business partner.
The implementation of BRMWeb was very straightforward as Weiland was able to upload our existing spreadsheets into the system. This was particularly helpful as we had limited internal resources we could dedicate to the project. In doing so, Weiland’s approach was to help us to leverage the data we already had, and then improve and expand on it from there. They helped us to reach out to our major banks so we could reconcile our list of accounts with them. Having implemented the solution, we went through another major acquisition, which brought a new influx of accounts, so we were grateful that we had a starting point for recording and managing these accounts.
While we started with the basics, we have now extended our bank account management further. For example, while we originally stored PDF versions of bank account documentation on a shared drive, this is all now stored on BRMWeb. As a web-based application, everyone across our four locations has easy access to the same set of information, and it has been a major step to be able to control this information more easily and systematically. Furthermore, we are now extending read-only access to the system to internal audit so they have visibility over the data management process.
Rationalisation and automation
While our ideal solution would be to limit our banking activity to our 16 core banks that make up our financing panel, this is unlikely in practice as we need to work with local banks in some countries. Therefore, a more achievable goal is to have close partnerships with 25 cash management banks. We have been encouraging these banks to support eBAM (electronic bank account management capabilities introduced by SWIFT but which banks will also be introducing into their proprietary tools). For Thermo Fisher, with multiple account openings and closures each week, being able to conduct this electronically would be a major advantage and reduce bureaucracy significantly. So far, we have found that banks are at different stages in their preparation; however, there is definite progress and we have been working closely with them to help define the corporate requirements of eBAM. There are various elements of eBAM which are currently absent. For example, while there is reporting on the opening of a new bank account, this is not the case when an account is closed or a signatory is changed. Consequently, better status reporting would be very helpful for audit purposes.