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Saving over £250K in bank charges

A TRUE STORY of how one organisation saved £250K in bank charges after improving cash visibility across their bank accounts.

The goal of any Treasurer is to effectively manage cash flow and ensure funding is available when required to steer the organisation towards sustainable growth. Funding typically relies on the utilisation of numerous credit facilities and where this is the case, the cost of credit becomes a key driver in treasury operations.

Depending on the sector the business operates within, there are niche strategies that can be deployed to manage this cost. There are also more generic strategies familiar to all businesses, regardless of sector.

Change is upon

Viewed in isolation, an overdraft charge here, and a late loan repayment fee there, are more a nuisance than anything else. However, where these are commonplace throughout the financial year, and when the aggregated cost of them over this time is finally calculated, the term ‘nuisance’ can suddenly feel like a gross understatement.

Undoubtedly, the inability to view the movement of finances in real-time and within one user-friendly interface has meant such financial management has been reduced to at best time-consuming, labour-intensive spreadsheet scrutiny, and at worst, guesswork.

Times though are changing.

Financial technological (fintech) innovations, which have traditionally focused on the private individual, are starting to direct towards the world of business and commerce. The objective of these innovations is largely two-fold; make processes easier and make bottom lines look better. To say that’s only two objectives, it’s fair to say that they’re enough to be turning the heads of many business leaders.

One turned head of many…

It didn’t take long for AccessPay’s cash management analytics tool and dashboard, to catch the attention of corporates of all persuasion.

One such company – a world leader in its sector – is a manufacturing company and subsidiary of a multi-national firm. The nature of their business necessitated heavy reliance on inter-company lending and debt financing. Utilising the services of several transaction banks, an ongoing requirement was to ensure the conditions of terms were being met to avoid fees and penalties.

Unsurprisingly, the Treasury team slipped into a cycle of concentrating energies into meeting criteria which would avoid, or at least reduce, the build-up of these fees and penalties. Time dedicated to the more proactive and productive pursuit of discovering more cost-effective ways of financing their operations was proving difficult to find.
Having explored the potential of being able to view multiple banks across multiple regions, the company quickly integrated the platform into their ERP, TMS and back-office infrastructure. They were soon identifying the cost of doing business with their transaction banks.

Moreover, their newfound ability to view multiple bank accounts in real-time has helped them to identify that by moving funds between two banks prior to close of business, they were able to partially cover overdraft positions using available funds of around £15m, rather than depending on revolving credit facilities or leaving accounts overdrawn.

The effect was that they were able to significantly reduce the overdraft charges on their accounts, which in turn led to savings of between £150k-250k per year. Not small potatoes by any organisation’s standards.

The multi-bank cash visibility solution not only provided a clear, single-point view of funds across the globe, but it provided insights into charges which had previously been neglected. Equipped with this new knowledge, the company had enabled themselves to make informed decisions which helped achieve significant cost savings to the business.

The effect was that they were able to significantly reduce the overdraft charges on their accounts, which in turn led to savings of between £150k – 250k per year.

The time to bring banking costs down is now

For far too long, organisations of all types have had to ruefully accept that bank fees and charges are part and parcel of monthly operations. For the company in the example above, they amounted to a figure approaching a knuckle-biting quarter of a million pounds over the year. That’s money that could go a long way to advancing any business in all kinds of different ways.

It’s this that is the beauty of real-time, multi-bank cash visibility. Yes, it makes the job of treasurers considerably easier and allows them to use their time more productively, but it’s the generous returns it can deliver that makes it a solution too compelling to ignore.

We live in uncertain economic times, which only adds fuel to the existing inferno that is the contemporary hyper-competitive marketplace. Costs such as unnecessary bank charges, from which zero value is derived, can become the difference between an organisation running comfortably, or regarding the future with a sense of stomach-clenching unease. And with the potential increase in cost of doing business in the UK, following Brexit – VAT charged upfront and higher credit card charges – it’s imperative for corporate and enterprise organisations to save now, so they aren’t stung later.


Empower your treasury and finance team

A secure, scalable finance and treasury operation starts with connectivity

A simple-to-use, single-point, and real-time view of the full corporate banking portfolio is a tool that is less a luxury, and more a necessity. Unlock the potential of the treasury and finance team to drive revenue growth and contribute towards key strategic decision making by automating the time consuming and risky process of cash and liquidity data gathering.

Find out more about the AccessPay Cash Management Analytics tool and our ability to help you achieve real-time multi-bank cash visibility through seamless bank connectivity and back-office integration.

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