Innovation, Efficiency, Simplicity. | 2015 Commercial Cards Conference | May 18 - 20, 2015 Helping to drive working capital benefits, process improvement and key challenges across Treasury, Procurement and Accounts Payable Rodrigo Sanchez, North America Commercial Cards B2B Product Manager Citi ® Integrated Payables Solutions Treasury and Trade Solutions | Citi Commercial Cards
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Citi Integrated Payables Solutions - Citibank · Citi® Integrated Payables Solutions Treasury and Trade Solutions | Citi Commercial Cards . 1 Innovation, Efficiency, Simplicity.
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Increased regulation of the Banking sector Centralized operations / Global
coordination
Emergence of Digital/Mobile
Data Management Regulatory Reform Regional Treasury Centers/IHB
4
Innovation, Efficiency, Simplicity.
Increasing Influence of the Corporate Treasurer
1947 1970 2015 2007
Treasury 1.0
Fragmented or informal function
Manual processes
Treasury 2.0
Centralization, SSCs, process outsourcing
Increased focus on transparency, control, automation
Increased technology and computing power
More sophisticated financial risk mgmt
Treasury 3.0
Strategic advisor more closely tied to business
Globalization and efficiency
Trading Partner / Supply Chain integration
Greater sophistication in risk / return optimization
Treasury influence
& ‘Value Add’
Source: The New Role of the Corporate Treasurer: Emerging Trends in Response to the Financial Crisis, International Research Journal of Finance and Economics, Issue 78 (2011)
5
Innovation, Efficiency, Simplicity.
Pressures on Treasury to Deliver Supply Chain Improvements
75% 67%
29%
25% 33%
71%
A/P paymentprocesses
Supplier paymentterms
Supplier financingprograms
Current Focus Focus for Next 12-18 Mos
Sources: Survey of Treasurers’ Group of Thirty 2, Citi and The 2NeuGroup, September 2014
How focused are you on the following aspects of
supply chain and risk management?
6
Innovation, Efficiency, Simplicity.
Physical and Financial Supply Chain Convergence
Within many firms, these trends are driving increased convergence of the physical and financial
supply chains – and creating a need for better cross-functional organization
Financial Supply chain
Procurement Treasury
Accounts
Payable
Payments
Physical Supply Chain
7
Innovation, Efficiency, Simplicity.
Financial Supply Chain: Organizational Goals
Treasury & Finance
Accounts Payable
Strategic Sourcing & Procurement
Audit & Compliance
Technology
Key Stakeholders Typical Client Goals
Capital • Minimize capital
required to operate
business Working Capital
DPO
Process • Create efficiencies
and strengthen
governance Operational Expenses
Control
Cost • Reduce costs Net Expense
Net Income
COGS
Rebate
Risk • Manage business
risk
Supply Chain Stability
Sustainability
8
Innovation, Efficiency, Simplicity.
Financial Supply Chain: Adoption Trends for Key Solutions
13% 11%
30%
22%
DynamicDiscounting
Supply ChainFinance
Planned for Next 12-24 Mo
Currently Use
1. Palmer and Gupta, Purchasing Card Benchmark Survey Results 2014, use of solution among Fortune 500 companies ;
Current & Expected Use of Solutions Focused on Payment or Discount Optimization
9
Innovation, Efficiency, Simplicity.
Building Bridges across Functional Silos
Sources: National Association of Purchasing Card Professionals, online survey : “How Does Your Organization Pay for Larger Transactions?”, Sept. 19-Oct 10, 2014; EuroFinance,
Corporate treasury and commercial cards 5-click survey, October 2014
55%
46%
40%
21%
12%
Procurement A/P Pcard Admin Other Treasury
Procurement / A/P View Treasury View
62%
20% 18%
Owns or part ofdecision-making
Consulted No Influence
“How Does Your Organization Pay for Larger
Transactions?”
“What influence does Treasury have
on selection of commercial card
programs?”
10
Innovation, Efficiency, Simplicity.
Food for Thought: Procure to Pay as Competitive Weapon
The level and quality of Procurement and AP convergence varies dramatically among
enterprises in the marketplace today, which means
that more agile organizations are effectively
using their P2P operations as a competitive weapon to gain advantage
over their rivals.
“
” - Ardent Partners, ePayables 2014: The Quest
Introduction
Citi Integrated Payables Solutions
12
Innovation, Efficiency, Simplicity.
Citi® Integrated Payables Solutions - Overview
Citi’s holistic suite of payment services, leading-edge analytics and other capabilities can help
optimize working capital and process efficiencies across a client’s end-to-end supply chain.
Citi Integrated Payables Solutions
Cost
Channel and
Connectivity
Services
Innovative
Payment
Services
Working Capital Analytics
Advisory,
Partnership
and Servicing
Supplier
Enrollment
Services
Generate
Returns
Increase
Free Cash Flow
Reduce
Costs
Support
Suppliers
Minimize
Risk
Client Benefits
13
Innovation, Efficiency, Simplicity.
Citi Working Capital Analytics: Building the Business Case
Total Client Benefit = $23.5MM - $26.5MM annually
Increased
Rebate
Working
Capital
Operational
Efficiencies
Payment Terms Extension
Payment Digitization:
Savings per Transaction: $2
Checks converted: 182K - 237K
Estimated Savings: $364-$474K
Supplier Finance:
Freed Working Capital: $180MM (30-day DPO extension)
Financial Benefits: $17.8MM
Cards:
Total volume: $226 - $349MM
(based on DPO 40 days)
Financial Benefit: $2.5-$3.8MM
$20.3MM-$21.6MM $0.4MM-$0.5MM
Recurring Recurring
Card Rebate
Opportunity
Cards:
Total Volume: $226-$349 MM
Rebate share: 125 bps
Financial Benefit: $2.8-$4.4MM
$2.8MM-$4.4MM
Recurring
Key Driver:
Spend on Commercial Cards Key Driver:
Check replacement Key Driver:
Sample Data for Indicative Purposes Only
14
Innovation, Efficiency, Simplicity.
Strategic Approach to Payables Optimization
A one-size-fits-all rarely works. Treasury, Procurement and Accounts Payables most align to
deploy the appropriate solution for specific segments of the organization’s supply chain.
IR S C irc u la r 2 3 0 D is c lo s u re : C it ig ro u p In c . a n d its a f f i lia te s d o n o t p ro v id e ta x o r le g a l a d v ic e . A n y d is c u s s io n o f ta x m a tte rs in th e s e m a te r ia ls (i) is n o t in te n d e d o r w r it te n to b e u s e d , a n d c a n n o t b e u s e d o r
re l ie d u p o n , b y y o u fo r th e p u r p o s e o f a v o id in g a n y ta x p e n a lt ie s a n d ( ii) m a y h a v e b e e n w r itte n in c o n n e c t io n w ith th e " p ro m o tio n o r m a rk e tin g " o f a n y tra n s a c tio n c o n te m p la te d h e re b y (" T ra n s a c tio n " ) .
A c c o rd in g ly , y o u s h o u ld s e e k a d v ic e b a s e d o n y o u r p a r tic u la r c irc u m s ta n c e s fro m a n in d e p e n d e n t ta x a d v is o r .
A n y te rm s s e t fo r th h e re in a re in te n d e d fo r d is c u s s io n p u rp o s e s o n ly a n d a re s u b je c t to th e fin a l te rm s a s s e t fo r th in s e p a ra te d e fin it iv e w rit te n a g re e m e n ts . T h is p re s e n ta tio n is n o t a c o m m itm e n t o r firm o f fe r a n d d o e s n o t
o b lig a te u s to e n te r in to s u c h a c o m m itm e n t , n o r a re w e a c tin g a s a fid u c ia r y to yo u . B y a c c e p tin g th is p re s e n ta tio n , s u b je c t to a p p lic a b le la w o r re g u la tio n , yo u a g re e to k e e p c o n fid e n tia l th e in fo rm a tio n c o n ta in e d h e re in a n d
th e e x is te n c e o f a n d p ro p o s e d te rm s fo r a n y T ra n s a c tio n .
W e a re re q u ire d to o b ta in , v e r ify a n d re c o rd c e r ta in in fo rm a tio n th a t id e n tif ie s e a c h e n ti ty th a t e n te rs in to a fo rm a l b u s in e s s re la tio n s h ip w ith u s . W e w ill a s k fo r yo u r c o m p le te n a m e , s t re e t a d d re s s , a n d ta x p a ye r ID n u m b e r .
W e m a y a ls o re q u e s t c o rp o ra te fo rm a tio n d o c u m e n ts , o r o th e r fo rm s o f id e n tif ic a tio n , to v e r ify in fo rm a tio n p ro v id e d .
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