Formed “by educators for educators” in 1945, the Horace Mann Educators Corporation originally aimed to provide quality affordable auto insurance for those in the teaching profession. Today’s company has extended into home, property and life insurance as well as retirement annuities. It serves more than 4,100 US school districts and has nearly $10 billion in assets.
Horace Mann is a multi line insurer. As such, the firm’s treasury team handles a high volume of payments. They include no less than 2,200 tax payments annually, totaling $20 million. Each of the 40 states in which the company operates imposes its own regulations, reporting requirements and report format for these payments and requires specific addenda formats for ACH credit tax payments. Horace Mann’s treasury team collaborated with GTreasury to amend 180 addenda templates in GTreasury covering 300 different fields. The effort saved time and improved forecasting.
Horace Mann’s three-person treasury department is tasked with multiple responsibilities. A central one is ensuring that timely and accurate tax payments are made that comply with each state’s requirements.
Before signing on with GTreasury, the team’s work was mostly manual. Cash positioning still involved Excel spreadsheets, and completing payments was a repetitive, lengthy process that involved logging into multiple bank portals at several different stages. The tax payment process involved the redundant, manual activities of the tax department as well as the treasury team. As tax payments were the largest in volume for Horace Mann’s cash management team, relying on an outmoded process carried a high risk of human error.
Compounding the team’s treasury challenges with multiple bank portals was the fact that a growing number of states had abandoned the traditional check payment process and began requesting electronic ACH payments. Each of the 40 states Horace Mann operates in has its own regulations, reporting requirements, and report format. New or changed addenda record formats and state bank account information created by banks were either communicated too late or not at all to Horace Mann. So, many payments missed the deadline or were rejected, incurring late fees or penalties.
Treasury efficiencies were further hampered by an absence of set procedures, impacting multiple areas of the company’s operations, resulting in a high volume of reconciling items.
GTreasury’s implementation team was really great about taking our ideas and bringing them to fruition. They helped us to solve a problem and, in turn, other clients are able to utilize those same tools.
The Horace Mann treasury team worked in partnership with GTreasury to amend addenda templates in response to changes. Between 300 and 400 templates for tax payments were imported into the GTreasury system, starting first with withholding taxes and progressing successfully to premium taxes. Beyond taxes, the team used the imports for intercompany and third-party transfers. Using the new templates within the GTreasury Payments module, Horace Mann set up a centralized approval process that consolidates the payment process and creates a single point for regulatory scrutiny.
The solution satisfies several key criteria, including reduced manual data entry; creating an accessible audit trail; improving cash forecasting; and making payment processing easier– above all for tax payments. Last-minute adjustments are now fast, easy and inexpensive. The tax team has saved 10 hours of work per week but is continuing to unlock further savings. When the project is completed, Horace Mann will have automated and efficiently processed almost 100 different types of tax payments.
Horace Mann’s collaboration with GTreasury to implement the solution has helped treasury overturn the fallacy that it is the company’s cost center, instead emphasizing its role as the gatekeeper of corporate money. This has raised the team’s profile and won it respect at the senior executive level. The tax project has also extended benefits to other departments within Horace Mann beyond treasury. It has also produced support for other projects, such as integration for short-term investments and a money market portal. In the end, having chosen GTreasury’s multi-tenant SaaS solution for treasury management means that Horace Mann’s efforts to improve its payment processes not only moved the company forward, but it helps moves the needle on efficiency and compliance for other treasury organizations using GTreasury.