Case Study: Formica

Brief

Formica is the market leaderand only manufacturer of High Pressure Laminate (HPL) in the UK, as well as being a manufacturer of a wide range of other interior surfacing materials. Formica manufactures and distributes decorative laminates, solid surfacing, and other decorative surfacing materials used in commercial and residential applications throughout Europe.

In 2007 Formica set up a Shared Service Centre in Newcastle. The objective was to implement a shared service payment solution to facilitate better control of cash across EMEA. The project’s goal was to standardize on a single European bank, reducing the number of bank accounts across Europe and get a better handle on cash balances and the bank reconciliation process.

With a total of 56 multi currency bank accounts a bank reconciliation solution was also sought from Cashbook. The objective was to reduce the time taken to reconcile the banks, enabling 95% of the reconciliation to be done prior to month end in order to meet close deadlines of Formica Corporate headquarters.

Here was the business process before the solution was implemented:

• 56 bank accounts used across all Europe.
• Manual processing of Draft payments and receipts.
• Bank reconciliation process not standardized across Europe.
• Paper based remittances were being printed and posted to vendors.
• Bank charges were substantial for cross-border payments.
• Payment process was slow and cumbersome.
• Lack of visibility of funds across Europe.
• Payroll interfaces were being completed by numerous banks across Europe.

Solution

A customer since 1998, Formica upgraded from V4 payment processing to V5 Global Payments in June 2007. Formica reduced the number of bank accounts from 56 to 37 and implemented a global payment solution which enables Formica UK to complete payment runs centrally for all vendors across Europe. The European Treasury centre was then able to manage the treasury function with greater degree of accuracy and increase investment potential. By implementing the email remittance solution, the company was able to reduce the time spent printing & posting remittance advices.

The automated bank reconciliation process enabled the company to have live reconciliations for all bank accounts across Europe. Bank accounts were reconciled on a weekly basis to ensure closer cash control & eliminated month end pressures around this process. The accurate audit trail, prompt resolution of outstanding items gave users time to focus on managing the exceptions to the bank reconciliation process. Having a single bank for Payroll, employee expenses and supplier invoices ensured banking fees were kept to a minimum.

The key features of the solution are:

• Modules featured include Global Payments, Cashbook Bank Reconciliation, Automatic Bank Statement Upload & Automatic Email Remittance Modules.
• Can be adapted for any Bank globally.
• Standard payment process no matter what bank, currencies or ERP you are using.
• Check printing, positive payment file capability
• P-card reconciliation capabilities.
• Complete audit trail & SEPA Compliant including XML/XSL reports.

Results

Key benefits of this project included:

• Reduction in number of bank accounts – thus reduced costs.
• Treasury management have greater control over cash and less cash holding at regional sites.
• Reduced processing time of payment runs.
• De-selections of invoices, vendors and companies occur with ease prior to payments being completed.
• Consolidation of payments to create a single payment file including numerous bank accounts and currencies across multiple business units.
• Central payment process has replaced multiple heterogonous methods in different countries for payroll and vendor payments.
• Automatic email remittance solution has reduced time & costs of payment process considerably.

Customer Comment: