by Kelvin Walton (Published: 09/24/2015)
In response to increasing needs for enhanced visibility and control of treasury risk, Children’s Healthcare of Atlanta (CHOA)’s treasury team made the decision to migrate from spreadsheets to a treasury workstation. In this exclusive interview with AFP, Selwyn A. Carter, MBA, corporate treasury manager for CHOA, explains how the project was conceived and organized, as well as the range of benefits now being achieved
AFP: Why did CHOA decide to implement a treasury workstation?
CHOA’s annual revenue in 2014 was $307 million, along with an investment pool of $3.363 billion. I felt that this represented too high a level of financial risk to be supported by no more than spreadsheets in a very manual operation. We clearly needed a more robust and streamlined treasury system, giving better visibility of cash and financial risk, and providing the means to deliver dependable cash forecasts and other management reporting to the CFO and other senior management. Without strong technology support, the team was fully occupied with basic day-to-day operations, such as managing bank data. An effective workstation solution would eliminate many effectively redundant, unproductive manual tasks, and would free team capacity for value-adding functions.
AFP: What were the high-level objectives of the workstation project?
Firstly, we wanted to control all of our bank accounts on one portal, for all funds transfers (wires and ACH), and manage bank data for cash positioning, cash accounting and forecasting. We also planned to cut the payment process cycle time, automate the GL interface, and manage our debt portfolio, which comprises two bond series. We sought to improve accuracy, the scope and quality of management reporting, and the level of treasury control, through the implementation of a ‘go to’ app for treasury. There were substantial efficiency gains to be made through redirecting the team’s work effort.
AFP: Can you walk us through how you made your selection and what the implementation process was like?
I acted as project owner and leader. The rest of the team did not have prior experience of using a workstation, so it was important for everyone to participate actively in the selection process, to achieve team consensus in the decision, and shared ownership of the resulting solution. We did not use external consultants. We issued RFPs to three potential vendors. We used the RFP responses and the follow-up system demonstrations and meetings to make our decision—which was for the GTreasury workstation. The GTreasury sales team delivered a detailed and streamlined presentation, showing the efficiencies that could be achieved. Most importantly, they talked to all the CHOA team members at a clear level, ensuring that everyone achieved the understanding they needed. We put together a project plan with an overall time frame, organized into four phases:
1. Bank accounts setup
2. General ledger setup
3. Funds transfer
4. Debt portfolio management.
We hit some unexpected issues with a bank’s incapability to integrate effectively with a treasury workstation for executing funds transfers. The proposed solution would have been too manual to achieve the planned efficiency gains. So, we had to change our funds transfer bank and perform additional set-up operations during the implementation, and this unplanned effort delayed the project.
AFP: What was involved with implementing CHOA’s debt portfolio?
Carter: This was quite a complex operation, which was completed as planned. It involved two non-standard bond issue series, one fixed and one variable rate, plus interest rate swaps and a construction loan. The process required the special configuration of GTreasury, and the use of a schedule to upload the customized interest payment structures.
AFP: What cash forecasting benefits are now being achieved?
We are forecasting, as planned, out to a two-month time horizon, based on historical cash flow data stored in the workstation. The table driven setup could be more easily scalable for slicing and dicing the data to give us the required groupings. We now enjoy a much improved forecasting environment, enabling us to see the upcoming small peaks and troughs which form our typical cash flow profile.
AFP: Please describe today’s reporting solution.
We are now able to supply the VP of finance and senior management with a timely, dependable and functionally rich set of reports, which define and analyze such key metrics as target balances and projected investment surpluses. The process is very clean, as the team no longer has to struggle with the ‘Excel dance’ to produce a minimal set of reports. The reporting is now generated automatically, and is based on accurate and complete data.
AFP: How is the new payments solution working?
The new payments workflow is great. CHOA is now operating a fully automated payments process with Wells Fargo Bank. The bank acts automatically on the required value date to create and execute wire and ACH payments. The system issues alerts so that our treasury team can research any detected issues, and can apply corrections as required. The system issues payment confirmations and related reporting. It is extremely valuable to have the workstation operating as a single central repository for wire and ACH payments, and it holds the supporting documentation for each transaction. This provides a useful research facility—and it has improved the audit quality of the payments workflow most significantly. We can slice and dice the information and export it to Excel or as a PDF file as required.
A longer version of this article will appear in an upcoming edition of AFP Exchange.
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