AFP Payments

Treasurers and controllers are the targets of cyber-fraud, according to the Financial Services Information Sharing and Analysis Center, receiving e-mails that contain a virus-laden attachment or a link that installs mal-ware designed to steal passwords upon opening. The scammers then conduct wire-transfer fraud in increments of less than $10,000 to avoid banks’ anti-money-laundering reporting requirements. Read the rest of this entry »

Consider using risk-based collections instead of targeting the largest and oldest dollar amounts first. That’s the advice from Rob Olsen, VP/Chief Risk Officer, Wright Express Financial Services Corp.

The result: Wright’s DSO is 19, helping to minimize costs and maximize cash flow. Read the rest of this entry »

Has the job market improved for treasury and finance professionals? According to some headhunters, large and even some midsize financial-services institutions have begun hiring, although not at the pace they were a couple of years ago. Read the rest of this entry »

General Electric faces a myriad of counterparty credit risk: from over 15,000 bank accounts worldwide, to credit exposure from derivatives used to hedge interest rate and currency risk, to short-term investments in everything from third-party money market funds to reverse repurchase agreements. By developing tools to assess its counterparty risk daily, GE’s treasury risk management team helped the company and, in the process, won the 2009 AFP Pinnacle Award for risk management. Read the rest of this entry »

Even Fortune 100 companies sometimes face treasury challenges — as Microsoft’s treasury department will tell you. Microsoft tackled one of the profession’s most common, but toughest, tasks: producing an accurate, consolidated global cash forecast. For its efforts, Microsoft won the 2009 AFP Pinnacle Award for innovation. Read the rest of this entry »

The next time you grumble about your treasury department’s big challenge, consider the Herculean task the City of Los Angeles Office of the Treasurer faced when it updated its processes:

- A $17 billion annual budget with 50,000 workers
- A 30-year-old payments system
- A highly politicized office environment
- The largest budget deficit in the city’s history
- An overwhelming resistance to change.

Despite all that, the Los Angeles Office of Treasury succeeded, winning the 2009 AFP Pinnacle Award for strategy along the way. Here’s what it accomplished:

- Reduced unidentified deposits from 1,220 to less than 20 per month
- Automated general ledger posting, resulting in the reduction of 107 FTE hours per week
- Realized annual float savings of $1,127,000 from implementation of four controlled disbursement accounts
- Decrease compensating balances with an associated increase in return on investment of $4,025,000.

LA’s Treasury Department will be honored for its effort at the AFP’s Annual Conference, Oct. 4-7.

Read more about it in the next issue of Exchange.

There is one silver lining for beleaguered treasury and finance professionals this past year—unprecedented opportunity to shine. No surprise, then, that AFP received a record number of submissions for its annual Pinnacle Awards, sponsored by Wachovia, a Wells Fargo Company. The bumper crop of submissions was among the highest quality in the history of the Pinnacle Awards, which annually recognize excellence in treasury and finance.

This year’s Pinnacle Award winners, and their winning category, are the City of Los Angeles (Strategy), General Electric (Risk Management) and Microsoft (Innovation). Read the rest of this entry »

How long do you wait until contacting a vendor or customer who hasn’t paid? The answer, according to C.J. Wimley: It depends.

Wimley, EVP of Corporate Solutions with SunGard, advocates risk-based collections. Some customers and vendors are riskier than others, he says, so they merit closer scrutiny.

“Don’t wait until 15 days late; call three days before payment is due,” Wimley says of high-risk customers and vendors. “When you properly do credit in trade receivables you assign a risk rate with customers. It’s as important as the credit process.”

According to the Credit Research Foundation, only about 20% of companies use risk-based collections.

Look for more from Wimley in a future issue of Payments. Wimley also will speak at AFP’s Annual Conference, Oct. 4-7, in San Francisco.

It’s tough for North American-based companies to get up and running in China. Ruth Lycke, CEO of China Connection Global Healthcare, and Daniel Paulson, President of InVision, have extensive business connections in China. They offer five steps for North American treasury and finance professionals who wish to open a business account at a local Chinese bank:

1. Select a bank. Bank of China, Agricultural Bank of China and ICBC are three of the best. Each of these banks has a variation of the same requirements. Opening an account with U.S. dollars costs between $100 and $500. You can also start an account with a low amount of Ren Min Bi (RMB-Chinese currency). You will either need an account that can deal with both RMB and USD or two accounts.

2. Bring a valid passport of the investor, and, if available, a residence permit and the permit of the registration of new company. Other forms of identification should not be necessary. A Chinese employer, such as a university, can set up a bank account for their foreign employees to make direct deposit payments. Having a native speaker along helps.

3. Start with the Agricultural Bank of China. The bank requires a minimum of $100 and a valid passport. Just 1 RMB is required to open an RMB account. The Agricultural Bank of China is also the official bank for Western Union in China.

4. Try the Bank of China. The Bank of China requires a passport and $500 to open an account. After completing the application form, the customer is issued a debit card for use in Bank of China ATMs all over Beijing. The Bank of China has several account types for foreigners.

5. Open an account with the Industrial and Commercial Bank of China (ICBC) with a passport, residence permit and a notarized translation into Chinese of the account holder’s name. The Chinese name is required to open the account.

The biggest challenge firms face entering China from a treasury perspective: Understanding the rules, regulations and laws in China. Paulson and Lycke say this is where having a relationship with a good accounting firm is invaluable. Laws and regulations in China can change in a matter of days and it is important to always be in compliance.

The biggest mistake treasury executives make when doing business in China: Underestimating the importance of relationships and doing things the “Chinese way” which often requires patience, perseverance, devotion, dedication, honesty, and time.

Read more from Paulson and Lycke at Asia Pacific Forum.

Does your organization intend to purchase/install a treasury workstation in the next 18 months?

That’s the question in a new poll from AFP. Whether or not you make this important decision, tell us about it at AFP Vote, sponsored by GTreasury.

You can find more AFP research here.