CFOs need to be very clear about what payment optimization means in practice and what implementing a new payment process will mean for their organization. The focus should be squarely on consolidating and optimizing cash flow across the entire business so that:
- All organization-wide cash-flows (payment runs and manual payments) are routed centrally through a payment hub
- Communication with banks is controlled centrally
- Foreign exchange costs are minimized by making all payments in a local currency. By doing so, cross-border payments are transformed into domestic payments
- All payments are grouped or re-grouped effectively to optimize transaction value
- Inter-company payments are performed without physical cash flows to save on transaction-based costs. All group-wide financial needs are managed by the designated payment hub entity
With these requirements in place, we turn to payment elements that are ripe for optimization:
- Cash pooling
- Inter-company payments/Netting
- Central payment processing
- Payments on behalf (POBO)
- Central cash collections (CCC)
To find out how to approach optimization in each area and how to capture the benefits, read this E-Book today.
Much of this email content was taken from the “Payment Optimization” E-Book authored by Serrala.
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