Cash & Liquidity Management
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Payables and Receivables Management in the Modern Treasury

by Matthew Davies, Co-Head of EMEA Product Management, Global Transaction Services, Bank of America Merrill Lynch

Treasury continues to play a more strategic role within many corporates. It is increasingly using its skills and vantage point as the location for concentration of all inflows and outflows to own the management of capital and help the organisation achieve operational goals. One way that treasury is achieving these objectives is by taking a coordinated approach to integrated payments and receivables management.

Many corporates have already embarked on some of the changes required to achieve integrated payments and receivables, using shared service centres for example. However, today treasury has to contend with myriad new payments and receivables options which, potentially, introduce complexity and inefficiency. Treasury also needs to consider its approach to centralisation to make sure that its decisions take a holistic view. In addition, treasury should keep abreast of developments in regulations and technology, which can complement the overall strategy.

Increasing payments and receivables choice

The options for both payments and receivables are greater than ever before. As an example, in order to meet the needs of their customers, companies are now quick to accept the latest online or mobile wallet or contactless card. From a sales perspective, this strategy makes sense: the goal is to make it as easy as possible for customers to pay. However, each option comes with its own associated costs as well as benefits.

Treasurers need to be aware of the implications of these new methods on receivables management. Receivables paid using an online wallet are often not automatically transferred to a company bank account and are therefore not as easily integrated into cash management structures. Treasury can work with sales to create incentives and understand different payment methods that are advantageous to the company while still offering a choice of payment methods.