Liquidity risk management is essential for the success of any organisation. Without sufficient visibility over liquidity, a business cannot make smart decisions about yield management, achieve its daily cash management goals or survive a crisis.
As a result, treasurers are under immense pressure to ensure business resilience and agility. But the pressure is even greater for non-profit organisations, especially in the humanitarian aid sector, where the ability to respond rapidly saves lives.
This is a challenge that Save the Children International faced as it attempted to modernise its treasury processing. Formed in 2011, Save the Children International provides services to regional charity members around the world, including fundraising operations in 30 nations that last year raised $1.5bn for international causes.
Save the Children operates in more than 100 countries, including war-torn nations and volatile regions, from Afghanistan to Sudan to Yemen. During crises, the treasury team must be ready to respond and send funding to humanitarian emergencies at a moment’s notice.
It was like we had a Ferrari in the garage, but we never took it out to drive
Liquidity risk management requires visibility into cash positions and having an overview of balances in all available banks, bank accounts, and countries. This can be difficult for large international organisations: Save The Children International deals with a high volume of transactions, including more than 4,000 non-dollar transactions every month, and manages over 120 banking partners with more than 500 bank accounts around the world.
Technology is critical to provide this visibility, by pulling together organisation-wide data and increasing efficiency. When it was formed, Save the Children International recognised that treasury management software could deliver more efficient processes compared to cash management done exclusively through multiple bank websites, and chose Coupa Treasury for this, but the software was not utilised to its full capacity at first.
“As my colleague put it, it was like we had a Ferrari in the garage, but we never took it out to drive,” said Asha Kumari, deputy treasurer of Save the Children International. “We had Coupa Treasury, but we didn’t allocate enough resources to it.”
The organisation began working closely with Coupa to unlock its potential, starting with cash management and improved bank reporting. Three years ago, only 35% of its bank and mobile wallet accounts were reporting via Coupa Treasury, and the organisation was still reliant on Excel spreadsheets and manual processes, like keying in banking data and sending faxes to confirm transactions. Coupa also allowed Save the Children to centralise its funding, moving from multiple disparate teams trying to manage cash in each country, into a single team managing cash globally.
But after making changes, including linking into the global payment messaging system SWIFT and using MT940 bank statement reporting, the organisation now captures over 90% of statements electronically and automatically into the treasury system. This has improved visibility and freed teams from time-consuming manual tasks to focus more on value-adding work that supports front-line humanitarian tasks.
The local finance team was attempting to pay tens of thousands of families
The treasury team’s rapid response capability was put to the test in 2022 when the war escalated in Ukraine. While the charity has had a presence in the country since 2014, the conflict required it to ramp up operations quickly.
“The local finance team was attempting to pay tens of thousands of families,” recalls Edward Collis, head of treasury at the organisation. “Coupa Treasury played a key role here in helping to work with local banking partners and create a process that meant Ukrainian families could receive money within 24 hours of registering with the charity.”
By embracing automation and digital transformation, the treasury team can now focus on more challenging – and rewarding – work, such as offering a better, faster service to offices in crisis countries. The lesson for businesses is that, with the right processes in place, they too can ensure money gets to where it is needed, at exactly the right time.
Tamir Shafer is vice president at Global Coupa Pay & Treasury
This article was taken from Issue 4, 2023 of The Treasurer magazine. For more great insights, members can log in to view the full issue.