Daily In-House Banking Management Solution
US Headquartered company operating in the aerospace sector with annual revenue of approximately $3.0 billion and operating with a global footprint.
This client had a complex liquidity structure involving zero balancing arrangements and a multi-currency notional pool, which required daily tracking and active management. In addition to the automated liquidity structure, a range of manual intercompany loans were also in place. This client also wished to introduce an intercompany netting process. The client wanted to house all these activities on a single balance sheet and ensure that they are being managed on a best-practice and cost-effective basis.
FTI Treasury Solution
FTI Treasury implemented the solution for this client on a phased basis, migrating intercompany lending first, followed by the liquidity structure and netting. This was done to ensure minimal disruption to the group processes. We manage all daily cash flows within the zero balancing structure and manage balances within the multi-currency notional pool within agreed balance parameters. Any currency balances in excess of these agreed parameters are converted to base currency and hedged, allowing the headquarters to access a significant pool of base currency cash on a daily basis.
Out netting solution has proved highly successful with full integration of AP/AR data directly from the group ERP system and netting settlement provided both via intercompany GL entries and cash.
All accounting requirements for the IHB transactions are provided via an automated SFTP link from our treasury management system to the client’s ERP system.