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Payment Factories : Driving Control, Centralisation and Cost Savings

Overall, the payments factory can be an excellent model for companies that want to improve control, centralisation and cost savings. It will streamline the operation, reduce bank transactions and reduce the number of accounts. The process, however, demands a good deal of organisational discipline.

Spying new opportunities to globalise operations and reduce costs, treasury executives are on the hunt for the ideal operating model to manage payments. In years past, they’ve pursued a number of strategies, including shared service centres (SSCs) and in-house banks (IHBs), to consolidate and centralise payables. Now there’s a new model to consider - the payments factory - a concept that’s getting a lot of attention among multinational corporations (MNC's) targeting redundancy and strengthening control. As with every new idea, it’s critical to analyse what this structure really offers, how the concept can be implemented and which companies are best suited to become payments factory managers.

Clearly, there’s increasing demand for streamlining the payables process. And each of the two more commonly used models, the SSC and thek IHB, has made progress in reducing costs. Because the payments factory concept represents a complex, hybrid approach combining aspects of both models, the first step in considering a payments factory is to recognise the value that the SSC and IHB deliver independently.
Shared Services: Efficiency and Service Benefits

The SSC model has proven itself within many global corporations. Here, a centralised payments operation makes all payments (including treasury and accounts payable (A/P)) through a single operating entity, standardising processes, leveraging process efficiencies and reducing costs. Other benefits include centralised expertise, which delivers better service, quality and timeliness, tight alignment with the corporate strategy, and the...

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By Dennis Gniewosz, JP Morgan Treasury Services - 18 Oct 2011

Lundi 24 Octobre 2011