Making the Numbers Add Up

Frustrated by heavy reliance on manual work across a range of treasury and payments processes, the treasury team at Vectrus partnered with BNP Paribas and Kyriba to harness the power of automation to drive accuracy.

Vectrus provides global solutions for IT, network communications, and facility and logistics services. The company, which is headquartered in the US, operates in locations across the Middle East, Asia, and Europe, all supported by the group treasury team.

Jody Hall
Senior Treasury Manager, Vectrus

Jody Hall, Senior Treasury Manager, Vectrus, comments: “Employing more than 8,000 people in 28 countries means that payroll is challenging. Our employees are our biggest asset, so treasury needs to ensure those payments are sent out in a timely and efficient manner. We also ensure that we have the cash in the right parts of the world so that we can respond at a moment’s notice to any of our customers’ needs, and maintain the entire treasury network throughout all the countries we’re in.”

Moving on from manual

The issue that the Vectrus treasury team faced when carrying out these obligations was a heavy reliance on time-consuming manual processes. It managed more than 70 bank accounts, using an Excel spreadsheet to produce daily cash positions on which it based borrowing and investment decisions.

“By doing everything manually, it took the better part of a day to obtain our cash position,” recalls Hall. “Then there’s the considerable risk of human error. We decided we needed to change in order to improve speed and accuracy, and free up staff time. We also wanted more analytical tools to analyse our data and support us in strategic decision-making.”

Vectrus wanted to obtain the balances of all accounts without logging on to individual bank platforms, and to automate comparisons between forecast and actual transactions. As the firm makes thousands of payments annually, the treasury team also wanted these to be automated. Additionally, treasury was searching for an easier route to post transactions to the general ledger.

“At that point, some payments were connected directly to the banks, while others were not,” says Hall. “Most of them needed at least some manual intervention to make them happen, whether it’s loading a file or even manually entering the payment.”

Hall and her colleagues wanted to forecast out the company’s cash position to make more effective decisions on borrowing, investing, currency hedging, and transferring funds between accounts. These decisions should be taken at the very start of the business day, but this was impossible with everything being managed through spreadsheets.

Dream partners…

Vectrus set about identifying a global banking partner that would enable it to manage its cash more effectively, and a TMS that would boost the treasury team’s efficiency. BNP Paribas was an obvious banking choice.

“We’ve been with BNP Paribas since 2015, and working with them has been a dream,” enthuses Hall. “They are always our first choice as a banking partner. We found them to have a top-notch implementation project, and the best customer service by far. For example, as we acquire new contracts that we’re working on and need to move into new countries around the world, we call BNP Paribas first to check that they can support our move into that country.”

With a TMS on the shopping list to tackle the efficiency issue, Hall met with several vendors at a treasury conference. She viewed demonstrations and began scoping out the offerings of various software providers, which informed her RFP process. Having reviewed the RFP submissions and assessed some demos, Vectrus narrowed the selection down to three providers, subsequently selecting the TMS from Kyriba.

“Once we were on board with Kyriba, they assigned a team to us that walked us through setting up the system in such a way that we could use it to our best advantage,” explains Hall. “It’s a flexible system, so we wanted to hone in on what we needed to do. As we set it up, we had to connect with our banks. We involved our different banking partners and started the implementation part of the connections. Our software has connections to get data in from the banks, and also connections to push payments out to the banks.”

With the project spanning four continents, Vectrus had to consider multiple regulatory requirements while ensuring appropriate controls were in place and processing payments efficiently on an end-to-end basis. The solution also had to respond to different time zone working hours and days, as well as local requirements.

Angello Wallace
Head of Implementation, Middle East and Africa, BNP Paribas

Angello Wallace, Head of Implementation, Middle East and Africa, BNP Paribas, comments: “Vectrus is based in the US – which is a 10-hour difference from our office in the Middle East – and operates in countries that span from the US to Asia Pacific. Ensuring co-ordination between all these teams is not an easy task. To manage this, we have formed a ‘one- bank’ approach across all countries. When a project starts, internal stakeholders are identified in countries covered in the implementation. We co-ordinate and ensure that every colleague knows expected milestones and key deliverables during the implementation lifecycle, while the central project team remains the single point of entry for our client. That’s how we achieve global efficiency from a bank perspective.”

Reaping the benefits

Vectrus has adopted a single solution spanning multiple countries, currencies, and payment types, with a centralised approach that provides significantly improved visibility and control. The solution also includes a high level of security through encryption and digital certificates. Crucially, the Vectrus treasury team now has central visibility over its bank accounts, and the ability to process a higher volume of payments without manual intervention.

“Our relationship with BNP Paribas and our partners has strengthened as a result of this project,” declares Hall. “We’ve tried to stick to the banks with which we’ve already established connections within the TMS, making it easier to set up in new countries. Having that existing relationship can expedite the process – we can trust our banks and know that they are the subject matter experts that can get us to where we want to be.”

As the system rolls out to the countries in which Vectrus operates, one major benefit that the treasury team has seen is the streamlining of bank account management, as Hall explains: “We are closing our smaller bank accounts and trying to bring all of our accounts and activity to BNP Paribas. For instance, we had some German bank accounts that weren’t with one of our premier banking partners. We spoke with BNP Paribas about their capabilities in Germany and were able to make the switch and close our older accounts. Bringing our German activity into our relationship with BNP Paribas has been great.”

Where efficiency is concerned, the project has freed up time for the treasury team. Transactions and accounts are no longer reconciled in Excel. Instead, decisions are made based on data presented by the software, enabling more effective working capital management. In addition, communications previously sent by email have been eliminated, as users can now update their data in the system in real-time.

“Thanks to automation across payments, journal entries, and reconciliation, we’ve reduced our workload,” reveals Hall. “This has benefitted not only treasury but also the billing and the general ledger departments, which are also seeing a workload reduction. For example, now that we have a feed, staff don’t have to enter all the journal entries that we were manually preparing.”

Payment processing has also been greatly simplified, with payments flowing directly to the bank instead of requiring manual entry. The system’s auto-balancing feature also means that after accounts have been reconciled, the system recommends where money should be moved, based on target balances. A further benefit is that the team is notified in real-time if any payments fail.

“Senior leadership love the accuracy of our numbers now,” enthuses Hall. “Our forecasting ability has strengthened, and we don’t have to worry about whether the formulae were correct every time we give a number to senior leadership. The new set-up gives us that peace of mind.”

Vectrus has also gained the ability to forecast its FX positions in individual countries, place FX payments, and also use local currency payments to make FX payments. The team previously spent a lot of time gathering information from disparate sources, including spreadsheets, emails, and paper documents. Using Kyriba as the system of audit, most of the necessary information can be readily accessed from a single location, streamlining the process and freeing up time.

“Now that we can forecast out our cash position, we’re able to see ahead of time where we need to have a foreign currency,” elaborates Hall. “We could decide to put a hedge in place if we think the rate is moving in a certain direction. By more accurately forecasting, we can create efficiencies when looking at the FX exposure.”

Set up for success

Since the project started, Vectrus has made acquisitions that have required onboarding, in addition to the planned roll-out among all the countries in which the firm operates. “We’ve purchased three companies since we started the project, and with each new acquisition, we have to set them up,” notes Hall. “Then, of course, as we move into new regions, we are continuously opening new bank accounts, setting up the reporting connection, and carrying out payments testing, for example.”

Along the way, through the fine-tuning of the system and treasury processes, the team has found other efficiencies that were not part of the initial plan. “We did add in a few things that weren’t laid out as goals in the beginning,” affirms Hall. “For example, we are creating a few more interfaces between our ERP system and Kyriba to cut down further on manual inputting. We can pull data out of our ERP and put it right into our treasury workstation.”

Reflecting on the success of the Vectrus project, BNP Paribas’ Wallace concludes that the openness of the bank to partner with agile technology providers together with its close working relationship with clients puts it in an ideal position to assist treasurers with specific needs.

“We work very closely with fintechs, third-party organisations and corporates to apply a co-creation approach,” he explains. “Through these partnerships, better technology is provided to corporates, which results in a great client experience. The Vectrus team clearly agree. Innovation remains at the heart of the bank’s strategy through continued investment in digital technologies and services to meet our customers’ expectations.”   

Members of the BNP Paribas and Vectrus Project Team

Emmanuel Ruban, Cash Management Sales – Qatar, Kuwait & Bahrain, BNP Paribas

Aaron Russell, Senior Treasury Analyst, Vectrus

Nicholas Ford, Senior Treasury Analyst, Vectrus