With major growth and an international setup, payment transactions quickly become complex. That’s why the automotive supplier ElringKlinger opted for a standardized treasury management system.
In the future, internationally operating groups will be able to simplify their payment transactions and deploy human and technical resources in a more targeted manner: A secure Treasury Management System (TMS) creates uniform structures worldwide while taking into account the different local challenges. By using modern analytics, payment flows, currency risks, maturity and interest rate structures are made transparent for the finance department. This is particularly important for companies such as automotive supplier ElringKlinger, which is undergoing a structural transformation from an SME to a corporate group as a result of strong sales growth and internationalization. The task of the Treasury department was to improve the overview of liquidity, ensure solvency, manage risks and leverage synergies for more than 40 group companies in 16 reporting currencies. The treasury department therefore opted for Ltc|treasury, in which payment transactions are also fully integrated.
TMS and SAP: a good combination
SAP is ElringKlinger’s preferred ERP system and is already being rolled out worldwide. Project experience encouraged the group to look for a combination solution that starts in SAP but maps significant parts outside of SAP. Above all, the flexibility and the possibilities for adaptation to the other systems, as well as the resource-saving implementation, spoke in favour of outsourcing certain functionalities from SAP. The Ltc|bank payment module in SAP, which is connected to Ltc|treasury and established in SAP, supports the local companies with payment proposal lists through a controllable workflow. The workflow functionality enabled the introduction of shared service centres, which relieve the local accounting departments, bundle resources and reduce the risk of fraud.
Local expertise remains in demand for vendor invoices and customer payments. Checking incoming goods and clarifying price and quantity differences require knowledge of the local language. Centrally controlled processes such as investment planning or research and development costs usually originate outside the ERP system landscape. These payment flows require cross-company control and monitoring. The database functionality and intelligent interface concepts in Ltc|treasury complement the on-site expertise. User-friendly input masks in the financing and project area support the implementation of global standards on a regional level.
With the help of database functionalities, ElringKlinger can also integrate other upstream systems into Ltc|treasury. Cash flows forecasts from R&D and investment activities are integrated and analysed in real time. The real-time analyses allow the Dettingen-based group to evaluate planned projects and their effects across companies and currencies.
Ltc|treasury enables global monitoring of all account balances and transactions through bank-independent communication. These are queried worldwide and made available in a single system. Despite strong sales growth and internationalization, the management of currency risks, cash pooling and forms of financing remain in the hands of the central treasury department at headquarters in Dettingen.