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Treasury Transformation: Why ACCO Adopted a TMS

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Carrie Horton of ACCO will present the immediate key benefits of moving away from spreadsheets, including perfecting cash visibility, reliable and more accurate cash forecasts, and an improved FX hedging program. As a bonus, hear ACCO's real-life story that drove them to invest in a treasury management system and a few tips and tricks to perfect your treasury management solution implementation.

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Treasury Transformation: Why ACCO Adopted a TMS

  1. 1. TREASURY TRANSFORMATION Why ACCO Adopted a TMS 1
  2. 2. ACCO BRANDS 2
  3. 3. BUZZWORD BINGO 3
  4. 4. WHAT DROVE OUR NEED FOR CHANGE?  European acquisition added significant complexity to treasury operations  Several new currencies  A couple hundred new bank accounts  Tripled size of intercompany loan portfolio  Executive Leadership wants the answers – NOW  Age of technology has created expectation of better, faster and more accurate information  Organizational objective to reengineer processes to make them leaner, more efficient  Reduce manual work where possible – STP is goal  Allow team to spend time on more value-add activities o Less data entry, reformatting o Better analysis, decision-making 4
  5. 5. 5
  6. 6. KYRIBA MODULES IMPLEMENTED  Cash management  Payments  Cash accounting  Market data  Debt position keeping  Risk management (FX hedging)  Financial accounting  Bank account management  Bank fee analysis 6
  7. 7. CASH POSITION WORKSHEETS  Multiple cash position views by account, entity, bank, currency etc.  View actual and forecasts together to see true bank balances for informed decision making  Customized transaction groupings for easy analytics  Offers both detail and summary level views  Drill down functionality to quickly view details of an amount
  8. 8. CASH FORECASTING  Compare multiple forecasts, and track against actual activity to track accuracy and reliability  AP and AR data direct feed from ERP systems for short-term view  Historical trending for mid-term view
  9. 9. PAYMENTS  Intuitive and interactive process maps to enhance payment controls and support large scale payment factories  Full Visibility from imitation, to approval, through acknowledgement, and finally to GL account posting  Standardize approval workflow across multiple banks and types of payments  Control the separation of duties in the payment process  Encrypted communication between Kyriba Hub and Banks
  10. 10. KYRIBA’S CASH ACCOUNTING PROCESS  Connectivity is established between Kyriba and banks, as well as between Kyriba and ERP(s)  Kyriba schedules imports of prior day files from banks  From these bank transactions, journal entries are posted to the ERP:  Mapping rules based on unique information bank account, reference text, corporate entity, etc.  Kyriba sends file(s) to ERP(s) to create journal entries Kyriba File(s) sent to ERP(s) Prior day bank files Bank 1 Bank 2 ERP 1 ERP 2
  11. 11. KYRIBA’S GL RECONCILIATION PROCESS  Kyriba schedules imports of prior day bank statement  All GL Cash Entries are imported from ERP to Kyriba for reconciliation to bank statement files  Exception Items are flagged and identified Kyriba: imports both bank statement and ERP ledger files Bank 1 Bank 2 ERP 2 ERP 1 Bank data: used to reconcile against ERP ledger balances ERP data: used to reconcile against bank statement files
  12. 12. MARKET DATA 12  Seamlessly integrates reliable FX and interest rates from external market data providers  Forward curves can be interpolated from rate points
  13. 13.  Track all debt activity related to term loans, credit facilities, interest rate swaps, leases, and other debt- related instruments  Automatically integrate cash settlements into daily positioning and forecasting  Automatically generate payments from the financial transaction contracts in the system  Track credit facility syndicate participants and prorate related event payments: principal, interest, and fees DEBT POSITION KEEPING Cur. 05/16/2018 05/17/2018 05/18/2018 AUDRevolver (A_RV) USD -86,445,697 -86,445,697 -86,445,697 USDRevolver (U_RV) USD -137,000,000 -137,000,000 -137,000,000 Letter of Credit (XL/C) USD -12,498,256 -12,498,256 -12,498,256 Swingline Draw (VB) USD 0 0 0 Debt&investment USD -235,943,953 -235,943,953 -235,943,953 Balances USD -36,940,217 -41,793,038 -41,079,763 US Dollar (USD) USD 164,056,047 164,056,047 164,056,047 Available credit line USD 164,056,047 164,056,047 164,056,047 Available + balances USD 127,115,830 122,263,009 122,976,284
  14. 14.  Provides visibility and control over funding needs and FX, offering better use of internal balance  Borrowing requests are processed through Kyriba’s dedicated in-house banking module, centralizing the entire workflow across all corporate entities IN-HOUSE BANKING  Automatically generate and send interest statements to entities for review  Approve and release physical cash settlements or postings to IHB balances
  15. 15. Relationship number: HR000771 Company: CAACCO Reference: CAACCO MAR 2019 Accounting standard: FAS Hedged risk: Full Fair Value Assessment: Cumulative Prospective: Critical terms match Retrospective: Critical terms match Period Hedged Risk MTM Settlements Periodic change Cumulative change Hedged Risk MTM Settlements Periodic change Cumulative change Effective Cumulative Effectiveness Initial value (5 177) 12/21/2018 136 0 136 136 (5 313) 0 (136) (136) Yes 136 12/31/2018 586 0 450 586 (5 765) 0 (452) (588) Yes 586 01/31/2019 (4 440) 0 (5 026) (4 440) (736) 0 5 030 4 442 Yes (4 440) Hedging transaction Hedged transaction RISK MANAGEMENT  FX Position Keeping  Transactions executed within FXall platform, then imported into Kyriba database via direct connectivity with Fxall  FX Valuations  Using market data provided by Thompson Reuters to construct FX curves and Yield curves for valuation within Kyriba  Hedge Accounting  Centralize Hedge Accounting documentation outlining hedged risk, and effectiveness testing methods  Centrally track all hedge relationships outlining the exposures, derivatives and testing results  Track OCI and P&L impacts for each accounting period
  16. 16. FINANCIAL ACCOUNTING  Borrowings and repayments of debt – both external and intercompany  Interest expense accrual  G/L on hedges  Reclass of G/L from OCI to P&L  Forward point amortization 16 From: 11/01/2018 to 01/07/2019 Order by: GL account/Accounting date/None Description GL account GL account description Debt Reference Company Cur. Debit Credit Date Initial Principal Exchange 3000 Debt Principal REVOLVER ABHQ USD -43,000,000.00 11/30/2018 Accrued Interest 1000 Period Interest Expense REVOLVER ABHQ USD -146,553.75 11/30/2018 Interest Payment 2000 Interest Paid REVOLVER ABHQ USD 248,708.54 12/31/2018 Interim Principal Exchange 3000 Debt Principal REVOLVER ABHQ USD -5,000,000.00 11/30/2018 Final Principal Exchange 3000 Debt Principal REVOLVER ABHQ USD 55,000,000.00 11/30/2018
  17. 17. REPORTING DASHBOARD  Include multiple reporting widgets and reporting tabs for quick access to pertinent information
  18. 18. KYRIBA BANK ACCOUNT MANAGEMENT  Gain control of bank account relationships with automated change management workflows  Track all details of organization’s bank accounts including signatories  Key capabilities include audit trails, bank account tracking, confirmation letters, document storage, and signatory management
  19. 19. IMPLEMENTATION TAKEAWAYS  Be hands-on  Ask to be advised of best practices  Set expectation for peripheral teams that the path to improvement will require their time & effort  Engage a strong project manager within your organization  Plan your time to allow practice immediately following any training sessions 19
  20. 20. THANK YOU FOR ATTENDING Best of Luck if you will soon be starting your Kyriba implementation (or if you are visiting the casinos later)! Please feel free to reach out if you have any questions along the way. It would be my pleasure to share additional experiences and learnings with you. Carrie Horton, Treasury Manager 847-796-4432 carrie.horton@acco.com ACCO Brands 4 Corporate Dr. Lake Zurich, IL 60047 20

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