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Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

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Watch the footage of the live case study presentation below.

When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS market for a ready solution. Dublin-based international aircraft leasing firm Aergo Capital saw exactly what it needed in Salmon Software, as its finance and funding leaders explain.

Aergo Capital, founded in 1999, is an established aircraft lessor specializing in sourcing, remarketing, and selling aircraft. Aergo manages a portfolio of 234 assets, serving 75 airlines across 46 countries. With a senior management team boasting a collective industry experience of over 290 years, Aergo Capital offers a rich history of industry leadership. Aergo’s deep technical expertise and a commercial team with a global presence allows the company to provide unparalleled excellence in the aviation sector.

There’s a point in the life of a business when, as everything seems to be slotting into place with its core activities, its supporting units need a boost to help take it all to the next level. With Aergo Capital, its largely manual treasury processes were nearing the limits of acceptability, and a big change was in the air.

Indeed, with manual payments for all loans, managing Aergo’s treasury operations required the attention of multiple personnel every month. Calendar reminders were used by the finance team to track its debt servicing obligations each month, following which, every payment had to be manually entered on to Barclays banking portal and then manually entered again into a spreadsheet to be uploaded into the accounting system and posted to the GL. The same labour-intensive drudgery applied to booking interest accruals at each month-end.

With more than 100 legal entities within the Aergo group, constant daily cashflows between these group legal entities were a feature of the business. This too demanded more manual time and effort to log on to the Barclays portal, draft each and every payment, carry out the two-step authorisation process, and then book it into the accounting system.

On the funding side, this tale of process inefficiency was repeated. Manual filing systems on a shared drive provided access to all the schedules and documentation for each transaction, but covenant compliance, amongst other things, had to be tracked manually. What’s more, the system was far from ideal in terms of data sharing between Aergo’s various functions, with more time-consuming manual intervention required.

“It’s why, due to our growth over the past number of years, we knew we needed the help of a good TMS,” declared Paul Laszzalette, the company’s Financial Controller. “It was not an overnight realisation”, added Jerry Buhna, Assistant Vice President Funding, just a gradual recognition that the company’s financing activities were nearing what he terms “critical mass” and the awakening to the fact that benefits of having a TMS at this stage of the business’ development were now outweighing the cost and effort of deploying it.

Right choice

With the anticipation that Aergo’s growth would continue at a similar rate over the next 24 months at least, Buhna says the team took a proactive approach of selecting and implementing a TMS sooner rather than later, in order to be adequately prepared for future growth.

Seizing the moment, Aergo kicked off its selection process, reaching out to contacts within the aircraft leasing and broader aviation industry to seek recommendations. Doing so provided a general guide to the vendor market, so that the approach to each provider with its RFI, and later RFP, already had a degree of focus.

The path from here led to Salmon Software as the most likely candidate. Aergo naturally favoured the vendor’s Irish heritage. But, says Buhna, industry colleagues had also boosted the system’s provenance in the wider aviation industry, and in-depth conversations with existing Salmon aircraft-leasing clients further demonstrated to Aergo that the system had the necessary capabilities. It helped in no small way that Laszzalette could draw upon his positive experience with Salmon’s TMS in his previous employ at a Dublin-based low-cost airline group.

Scoping success

Automation of Aergo’s funding processes were key to the success of this project, says Buhna. It also places the Salmon TMS as “the single source of truth” for information such as amounts paid down on each transaction, loan schedules, and the related documentation for each deal and facility. “Having a system in place which provides data integrity minimises the potential for human error; in the simplest of terms, it ensures that everything is how it should be for a company of Aergo’s magnitude.”

Obviously, automation and strengthening of controls were also required on the finance side. But Laszzalette comments that when project scoping got underway with Salmon, it was vital that the vendor could appreciate and understand the nuanced requirements that every company and function has of a TMS. In fact, he says, “throughout the scoping sessions with Salmon, it was very apparent that there were additional functionalities and workarounds for us in terms of servicing some of our internal debt financings”.

Salmon’s consultants worked with Aergo to help build out a full set of requirements. Buhna describes this stage as a “slow and organic process of discovery”. It involved the Aergo team explaining how its own processes need to operate, and how these fit into its role as a lessor and asset manager, with Salmon then explaining how its solution directly meets these requirements, and where appropriate workarounds could be devised, “all with the aim of moulding the system to meet our needs”.

Helping hands

Because the Salmon TMS is modular, Aergo has not had to roll out the entire suite in one ‘big bang’. By taking on each component at a time, it is able to concentrate on what it needs, when it needs it. This brings focus to the implementation project. Indeed, with “a regular package” designed to tackle the “regular issues” of an expanding business, Buhna reports that the implementation has “flowed well” to date. And with most of the functionality already in production, full go-live is expected in early 2024.

The practical work on Aergo’s side has been split between Buhna and Laszzalette, with Buhna taking his first lead role on a project of this kind, revealing that “it’s all been very new to me”. Salmon’s role in the smooth progress to date has been key, he asserts. “One of the biggest benefits for us has been how responsive Salmon has been to all of our requests and helping us through the implementation process.”

That said, reaching the stage it is at now – around 95% complete – has presented various challenges. But Buhna accepts that, given the complexity of the project, this is not unusual. And with Salmon talking him through the process step by step, the team were able to overcome every obstacle along the way.

As part of the workload, additional conversations with Aergo’s primary bank, Barclays, were necessary. The team at Barclays played a pivotal role in the overall success of the implementation, providing valuable insights and support. Salmon had already worked with the bank, a familiarity Buhna describes as “an added bonus”. This ensured the highest level of integrity and robustness of all connectivity. In addition, Aergo’s IT service provider, Atoo Information Technology, was also instrumental in navigating the complexities of the project. Buhna comments: “Trying to manage three external parties while also managing the internal teams, to ensure the implementation process is constantly progressing, is demanding”.

Evolving needs

In operation, the system works with all data sitting within the Salmon software. Information can be created within Salmon, which is then automatically pushed, via Secure File Transfer Protocol (SFTP), to Barclays. The bank is then able to process it as required, returning (via SFTP) the relevant information to the TMS. “It’s all very much interconnected,” says Buhna.”

Despite the solid progress to date, there is no illusion within Aergo that once the TMS is live it signals the end of the project. “We have a good understanding of how all the issues will be tackled, and how our processes will be improved, but we still have work to do,” observes Buhna.

Indeed, the team looks on it as a two-step implementation process. So while Aergo will have some of its challenges solved with this first phase, the next, for example, will see the finance team connecting Salmon to the accounting system for activities such as reporting. One module that Laszzalette reports as having been earmarked for deployment in phase two is bank reconciliations.

Look to the future

With “plenty of room for extra functionality” and obvious capacity to scale the system as Aergo grows, Buhna reveals that one of the higher aims of the project has been to future-proof its investment in technology. The initial brief demanded everything that was needed to meet Aergo’s current challenges, but also those that it felt it may need over the next few years as the business grows and the environment in which it operates changes. Recalling conversations with another Salmon client – a larger player in the aircraft leasing industry – Laszzalette says that whenever a new idea was presented to the vendor, there was always a willingness to work with and meet those needs. He confirms that the vendor is on course to maintain its reputation for collaboration and support.

With phase one almost complete and go-live imminent, Buhna has an informed impression of what his team’s life will be like once it is fully up and running. “From the requirements of the funding team, it is just as we expected. In fact, it has exceeded my expectations because whenever there isn’t a clear solution for something, there’s always a good workaround that Salmon and ourselves can come up with.”

On the finance side, Laszzalette is equally happy to verify project success. “We’ve carried out a lot of testing for much of the functionality, and it is all doing exactly what we want it to do.” With at least one other TMS implementation under his belt, he is acutely aware of the value a project of this nature can bring to the business. The essence of that – a huge amount of time and effort saved – is going to place Aergo in a much stronger position as it rises to the challenges and opportunities presented by the next stage of its development.

By Tom Alford, Deputy Editor, TMI
First published by TMI: https://treasury-management.com/articles/time-to-fly/

Press Releases

Airplane in a sunset

Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

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Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
Woman looking out of the airplane window

Empowering Financial Excellence with Salmon Treasurer

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Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
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Empowering Financial Excellence with Salmon Treasurer

Woman looking out of the airplane window

Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft lessor. The agreement solidifies Salmon Software as the chosen partner to implement their cutting-edge Treasury Management System, Salmon Treasurer, for Azorra’s financial operations.

The system is renowned for its robust functionality, user-friendly interface, and advanced features designed to streamline treasury processes, enhance reporting, and optimize financial decision-making. Azorra’s decision to partner with Salmon Software underscores the company’s commitment to leveraging state-of-the-art technology to drive efficiency and transparency in their treasury operations.

Alan Stanford, Chief Financial Officer at Azorra, commented: “As we continue to expand our business, welcome new airline customers and acquire an increasing number of aircraft, our investment in Salmon Treasurer  will empower us to quickly make informed decisions and drive efficiency, thanks to detailed visibility of our financial operations.”

Salmon Software’s CEO, John Byrne, also shared his thoughts on the collaboration, saying, “We are honored to have been selected by Azorra as their trusted treasury management system provider. Salmon Treasurer is designed to meet the ever-evolving needs of modern businesses, and we are confident that our solution will provide Azorra with the tools they need to navigate the complexities of treasury management successfully.”

The implementation of Salmon Treasurer will enable Azorra to centralize and automate their treasury processes, providing real-time visibility into cash positions, forecasting, loan management, reporting and many more.  With a track record of successful implementations across various industries, Salmon Software is poised to deliver a tailored solution that aligns seamlessly with Azorra’s strategic financial objectives.

About Salmon Software

Salmon Software is a global leader in providing Treasury Management System solutions. With a track record of success spanning over 36 years, Salmon Software is trusted by organizations worldwide for its cutting-edge technology and commitment to customer satisfaction. Learn more at https://salmonsoftware.ie/.

About Azorra

Azorra is a relationship-driven aircraft lessor that provides leasing, financing, fleet transition and asset management solutions to aircraft investors, financiers and airline operators worldwide. Azorra’s multi-cultural team reflects the global markets that we serve and includes core competencies in aviation law, aircraft finance, maintenance, marketing, sales and leasing. Our team is led by seasoned veterans having a shared history of success and is complemented with young professionals that bring fresh perspective, ideas and enthusiasm. Azorra currently owns and manages a fleet of 100 aircraft on lease to 30 operators in 23 countries on 5 continents around the world, with total commitments of more than 160 aircraft including orders for new Airbus A220-100/300 aircraft and Embraer E190/195-E2 aircraft. The company is headquartered in Fort Lauderdale, Florida, and has offices in Dublin, Toulouse and Seattle.

For additional information, please visit us at www.azorra.com or on LinkedIn.

201 East Las Olas Blvd, Suite 2250
Fort Lauderdale, FL 33301
info@azorra.com

Press Releases

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Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

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Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
Woman looking out of the airplane window

Empowering Financial Excellence with Salmon Treasurer

| Uncategorized | No Comments
Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
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Reinforcing Dominance in the Aviation Industry

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– Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software's commitment…

Reinforcing Dominance in the Aviation Industry

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[Dublin, 20th of November 2023] – Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software’s commitment to serving the aviation industry with cutting-edge financial solutions.

LCI, an innovative aviation company that is uniquely positioned across the commercial fixed-wing, helicopter and advanced air mobility sectors, selected Salmon Treasurer as their preferred Treasury Management System (TMS).  Salmon’s strong reputation for delivering sophisticated, efficient and effective TMS solutions was the significant criteria in LCI’s selection.

“We are very pleased to welcome LCI as a new client into our growing portfolio of clients in the Airline and Aircraft Leasing sector,” said John Byrne, CEO at Salmon Software. “Salmon Treasurer has unique instrument coverage and rich functionality, particularly suited to this industry.”

LCI is equally enthusiastic. “Salmon Software’s reputation as a trusted, reliable and effective TMS provider in the aviation sector is well-deserved,” said Alan O’Rourke, Chief Financial Officer at LCI. “We believe that this collaboration will provide us with the best solutions, industry knowledge and expertise to meet our Treasury needs as we grow our fleet and our business.”

—ENDS—

About Salmon Software: Salmon Software is a leading provider of Treasury Management System, offering innovative treasury solutions to organizations across various industries. With a very strong position in the aviation sector, Salmon Software has earned a reputation for delivering sophisticated treasury management software and exceptional customer service.

About LCI: LCI is a leading aviation company that is uniquely positioned across the commercial fixed-wing, helicopter and advanced air mobility sectors. Since its inception in 2004, LCI has undertaken approximately US$10 billion of aviation transactions and provides leasing services to operators, Governments and end-users.

LCI is owned by Libra Group (www.libra.com), a privately-owned international business group whose subsidiaries own and operate assets in nearly 60 countries and Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL) (www.smfl.co.jp). For more information, visit www.lciaviation.com

 

For more information about Salmon Software and our TMS solution, please visit our website.

Press Releases

Airplane in a sunset

Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

| Uncategorized | No Comments
Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
Woman looking out of the airplane window

Empowering Financial Excellence with Salmon Treasurer

| Uncategorized | No Comments
Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
Airplane

Reinforcing Dominance in the Aviation Industry

| Uncategorized | No Comments
– Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software's commitment…

Cleared For Take-Off: Salmon TMS Gives Aviation Treasurers Essential Visibility

Airplane

The aviation industry often uses leasing arrangements for its high-value assets. The financial complexity of these contracts requires the expert input of treasury to unravel them, but when spreadsheets are the only tool available, the task takes on new and unwelcome challenges. Conor Ward, Managing Director of MoyleRoe Corporate Services and aviation consultant to Salmon Software, has a solution.      

Leasing is a vital tool for airlines when acquiring aircraft. Many will typically have a mix of owned and leased assets. Ownership is a good investment, but a new aircraft is a huge capital expenditure. List price for the European industry workhorse Airbus A320 family, for example, starts around $101m.

By leasing rather than buying, airlines overcome the huge capital requirements of ownership, but more importantly they enable a faster response to market change, says Ward. That response time may be critical in meeting short-term capacity changes, or moving quickly into or out of certain routes. And it’s not just brand-new aircraft that are subject to leasing agreements: with planes having a typical ‘useful life’ of around 25 to 30 years, and a pre-owned example of the A320 going for an average of $25m, the used aircraft-leasing market is buoyant.

 

Increasing complexity

 

Aircraft leases typically range from three to 12 years, the tenor being steered by the airline’s strategy. In addition, leases tend to be acquired via aviation lessor or broker companies. New assets are often directly acquired from the manufacturer and then leased out to airlines. If an airline has bought an asset directly, a lessor may offer a sale-and-leaseback arrangement, in which it buys that asset from the airline and leases it back to it. Leases may be wet or dry, where dry means the aircraft and nothing else is provided, and wet includes the crew.

A lessor seeking to buy a new aircraft will usually need financing. This could be from a group of financial institutions, other investors, its own equity, or a combination of these. In leasing out an asset to an airline, commercial contracts will be negotiated, normally involving the setting of fees for rent and maintenance, the term of the contract, and the deposit of a security either in the form of cash or a bank LC. With the commercial terms established, counterparties progress to technical acceptance. This ascertains the aircraft’s fitness to fly, ensuring its unique technical log is fully up to date. Acceptance will see the lease executed.

The terms, cash flows and covenant obligations of aircraft financing can be complex, with derivatives or hedging instruments often embedded within the debt or equity instruments. In addition to the financing element, the associated operating cash flows, which include lease rentals, maintenance income or expenses, and other operating expenses, need to be managed over the ownership life of that asset.

Frequently, the cost and complexity of aircraft ownership and leasing will see a special purpose company (SPC) arrangement deployed. Where one asset is owned by one SPC, it ensures no cross-collateralisation with any other asset. This may be a lender requirement, with the SPC being owned by the holding or financing company which holds the debt/equity instruments, which in turn issues an intercompany loan to the SPC acquiring the asset, mirroring the terms of the external debt or equity. It’s a necessary structure that significantly adds to the volume of instruments held by an aviation group, consequently amplifying the volume of financial data it generates.

Of course, understanding the debt/equity position of the business is just one aspect. Another fundamental aspect of aircraft ownership and leasing is the day-to-day management of core treasury elements such as bank statements, payments, and accounting. “The volume of payments and the accounting-related tasks associated with banking transactions can be overwhelming at times, especially where there is a lack of visibility over the data,” says Ward.

 

An aviation-friendly platform

 

Of course, there needs to be a better process if all transactions are to be accounted for, and payments are to be made on time. However, Ward notes that treasurers in the aviation industry are all too often beholden to a mire of spreadsheets.

“If you had one leased asset financed by a bank it would be relatively practicable to use Excel. But aviation companies have multiple assets, and therefore multiple counterparties, to manage. Basic spreadsheet software would not give treasury teams the tools to collate, track, maintain and produce the output required to present to management and relevant stakeholders in good time, but this information is fundamental to the business.”

Frustration with the lack of visibility, timeliness, and clarity of spreadsheet data is compounded by the risk of error inherent within manual processing. The answer is the deployment of a TMS, which can begin to automate the treasury activities associated with leasing, and remove the risks. With the right connectivity, a TMS also facilitates faster processing speeds and easier access to essential data.

As with most modern TMSs, Salmon Software gives users the capability to track and update loan schedules, covenants, and cash flows for all instruments. It also presents this information in real-time. “This gives treasurers and other stakeholders the ability to make quick decisions and manage their business effectively,” Ward states. “It also improves the efficiency of the accounting process two-fold.”

But while Salmon Software has for many years worked with clients across a range of industries and sectors, it has a noteworthy number of implementations in the aviation space. As such, Ward says the Salmon TMS has developed into “a very aviation-friendly” platform.

The system can, for example, record all of a client’s aircraft-related lease transactions and present its data through dashboards tailored to the industry-specific needs of its user. With the requirements of the aviation sector well understood by Salmon allied to the platform’s design flexibility, Ward says the vendor has also been able to embed groundbreaking industry-focused contracts management functionality. While he says this is not intended to replace a specialist platform, it nonetheless provides the ability for treasury and other stakeholders to monitor essential contract components.

The covenants dashboard, for instance, checks and tracks compliance, flagging any potential issues in good time. The contract management function also records and tracks other significant elements such as current securities on leases, loan-to-value ratios, and even market values of aircraft.

A further example of Salmon’s aviation-friendliness cited by Ward is its capability to log and track the serial numbers and specific data points of each leased aircraft, including those of key components such as its engines. This data is static but nonetheless important, as it is often required by different stakeholders to help them easily monitor portfolio concentrations and other relevant information, with individual aircraft data linking to the various financial instruments, and associated providers, underpinning its lease.

 

Implementing for success

 

Salmon Software did not set out to attract the aviation sector per se, but the platform’s flexibility gave it the edge when meeting the nuanced needs of that sector, notes Ward. That it is used successfully in a diverse range of industries is certainly testament to that flexibility.

Of course, any treasurer taking the TMS path will need explore in depth every system that is being short-listed before signing on the line. “Functionality, flexibility, security, and the implementation process are all areas that must be explored in depth in every selection process,” urges Ward. Integration is another key topic, he adds, noting that any existing and planned internal systems, especially ERPs, and external systems including banking platforms, must be both compatible and connected.

The successful integration and connectivity of a TMS should ensure not only that automated data transfer is unhindered but also that cash is optimally visible across the enterprise, preferably in real-time. The addition of the aforementioned industry-customisable dashboard design, and the contract management functionality, should ensure every user is able to see what they need to see, when they need to see it, aviation sector or otherwise.

But there’s even more to Salmon’s offering than a host of useful and usable tools, states Ward. “A huge selling point for us is not only our aviation-friendly system but also our ability to work with clients on their implementations,” he explains. “We support that process with our detailed knowledge of the sector, helping them to get the best out of the system. It’s our level of communication in that process that reassures each client that there is an efficient and effective process in place. This is definitely a big advantage for them.”

Indeed, in terms of keeping treasury’s feet on the ground, when the rest of the business is intent on taking off, a TMS that comes with deep-rooted sector expertise has a lot to recommend it.

 

First published by TMI.

Press Releases

Airplane in a sunset

Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

| Uncategorized | No Comments
Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
Woman looking out of the airplane window

Empowering Financial Excellence with Salmon Treasurer

| Uncategorized | No Comments
Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
Airplane

Reinforcing Dominance in the Aviation Industry

| Uncategorized | No Comments
– Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software's commitment…

Raiffeisen Digital Bank Selects Salmon Treasurer for their Treasury Needs

Raiffeisen Digital Bank - Mobile Phone Payment

Raiffeisen Digital Bank AG Austria selects Salmon Software’s, Salmon Treasurer Treasury Management System for their Treasury and Cash Management Operations.

  • Salmon Software Limited is happy to announce another major digital banking brand as a new Salmon Treasurer customer.
  • The move will help Raiffeisen Digital Bank AG to strengthen banking operations and deliver their fully digital banking service to their customers with speed and efficiency.

Salmon Software Limited today announced that Raiffeisen Digital Bank AG has selected their Treasury Management System, Salmon Treasurer, as one key IT component in their internal operations, supporting sustainable growth of their fully digital products and helping to offer banking services with convenience and speed.

Raiffeisen Digital Bank will be adopting Salmon Software’s Treasury Management System ‘Salmon Treasurer’, deployed on Microsoft Azure, allowing the organisation to scale their resources up or down as needed. This in turn can help to reduce costs and ensure that they have the resources they need to meet operational demand as the service grows.

Michael Kearney, CEO of Salmon Software commented: ‘The Global Banking market is continuing its journey towards greater banking digitisation and we’re delighted to add Raiffeisen Digital Bank AG to our growing list of Banking customers on this new digital journey. Raiffeisen Digital Bank AG customers can be confident in the knowledge that the underlying system will provide Raiffeisen Digital Bank AG with dynamic & comprehensive information to support their customers digital loan activity.’

Alexey Kapustin, CEO at Raiffeisen Digital Bank AG, added: ‘After an extensive evaluation of potential Treasury Management System providers for our new Digital Banking operations the Salmon Treasurer solution fits perfectly to our needs. With its comprehensive functionality, modular feature set, strong integration capabilities and flexible dynamic reporting tools, we are confident that Salmon Treasurer will support us in our ability to provide our customers with an efficient and effective Digital Banking service that today’s customers demand. We’re excited to work with Salmon Software on this project to successfully achieve our goals.’

Raiffeisen Digital Bank AG will go live with Salmon Treasurer in the coming months.

 

About Salmon Software

Since its foundation, Salmon Software has focused on delivering a world-class treasury management software system with functionalities that fulfil the requirements of the treasury front, middle and back offices, including integration with third-party systems ranging from dealing platforms and market data providers to ERPs and risk systems.  The solution is based upon Microsoft Azure hosting that allows every client to operate on a separate environment.  The business has achieved great success and coverage with its flagship treasury management software system ‘Salmon Treasurer’.  The system has evolved to reflect the technological innovation and increasingly complex global financial systems that have paralleled the company’s history making it one of the most sophisticated treasury software platforms in the world.  This achievement is due to the dedication of a highly skilled, multi-disciplined support and development team who focus on producing a world-class product.  These capabilities combined with meaningful ongoing client engagement enable Salmon Software to pursue a policy of continuous, customer-focused product enhancement and development.

 

About Raiffeisen Digital Bank

Raiffeisen Digital Bank AG offers digital banking products and services to private individuals with the aim to become the bank-of-choice for core customer needs that is trusted, fast, effortless and has a genuine human touch. Under the Raiffeisen brand, they currently offer various digital banking services in Poland and Romania, including current accounts and fully digital loans and that enable consumers to apply for loans in a fully digital way. Raiffeisen Digital Bank offers digital banking expertise, a state-of-the-art digital banking platform as well as banking products for international clients under a trusted brand. Raiffeisen Digital Bank AG is an Austrian bank based in Vienna, with an Austrian banking license.

 

For more information:
Louise Cassidy
Tel: +353 86 383 5727
louise@ckcomms.ie

Press Releases

Airplane in a sunset

Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

| Uncategorized | No Comments
Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
Woman looking out of the airplane window

Empowering Financial Excellence with Salmon Treasurer

| Uncategorized | No Comments
Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
Airplane

Reinforcing Dominance in the Aviation Industry

| Uncategorized | No Comments
– Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software's commitment…

Cash flow – The lifeblood of every business

Cash flow the lifeblood of every business feature image

Cash flow forecasting is a financial management tool used to predict the expected cash inflows and outflows of a business over a specific period of time. It provides a framework for companies to plan, budget and control their cash resources to meet financial obligations and manage risk. It also enables businesses to anticipate future cash shortages and surpluses and take appropriate actions to manage cash effectively. In this white paper, we will discuss the benefits, the potential pitfalls, and how companies can implement this tool effectively.

 

Benefits of Cash Flow Forecasting

Better Financial Planning

Cash flow forecasting enables businesses forecast their cash requirements accurately, which helps them to plan their budgets effectively. Companies can use the forecast to identify potential shortfalls and take corrective action before they occur. This tool also helps businesses to plan for capital expenditures, debt repayments, and other financial obligations.

Improved Liquidity Management

It gives businesses the ability to identify potential cash surpluses and deficits in advance. Companies can then use this information to manage their liquidity better, by investing surplus cash or securing additional funding to cover cash shortfalls.

Enhanced Risk Management

Cash flow forecasting helps businesses identify potential financial risks, such as cash shortages, delays in customer payments, and unexpected expenses. Companies can use the forecast to develop contingency plans, such as securing additional financing or negotiating payment terms with suppliers.

Better Decision Making

It also provides businesses with accurate and timely information about their cash position. Companies can use this information to make better decisions about investments, borrowing, and other financial activities.

 

Pitfalls of Cash Flow Forecasting

Inaccurate Data

The accuracy of a cash flow forecast depends on the quality of data used. Companies need to ensure that the data used in the forecast is accurate, up-to-date, and comprehensive. Failure to do so can result in inaccurate forecasts, leading to poor decision making.

Limited Scope

Any forecast is only as good as the assumptions made about future cash inflows and outflows. Companies need to consider a wide range of factors, including market trends, economic conditions, and customer behavior when developing their forecasts.

Poor Implementation

Forecasting demands a structured approach and a commitment to ongoing monitoring and adjustment. Companies need to have the right processes, systems, and resources in place to implement this tool effectively.

 

Implementing Cash Flow Forecasting

Identify Key Drivers

Companies need to identify the key drivers of their cash inflows and outflows. This includes factors such as customer payments, supplier payments, capital expenditures, and debt repayments.

Develop a Cash Flow Model

Businesses need to develop a cash flow model that reflects their unique cash flow drivers. This model should be based on accurate data and should include a range of scenarios to reflect potential changes in market conditions and, for example, seasonal variations.

Monitor and Adjust

Companies need to monitor their cash flow forecast regularly and make adjustments as needed. This includes updating the forecast with actual results and adjusting assumptions based on changes in market conditions.

Inter Company Communication and Collaboration

Cash flow forecasting requires collaboration and communication across different parts of the business. Companies need to involve key stakeholders, such as finance, sales, and business unit operations teams, in the forecasting process to ensure accurate data and effective decision making.

 

Conclusion

Cash flow forecasting is an essential financial management tool providing  businesses with the ability to plan, budget, and have visibility and control over their cash resources.

It helps companies manage liquidity, identify financial risks and make better decisions.

However, businesses need to be aware of the potential pitfalls of cash flow forecasting, including inaccurate data, limited scope and poor implementation that may occur with the use of Spreadsheets or accounting systems with multiple possibilities for data error entry and origin, alongside limited proactive reporting capabilities.

By following a structured approach to implementation using such solutions as a Treasury Management System supporting automated straight through processing and ongoing monitoring, businesses can benefit from the advantages of cash flow forecasting and dynamic reporting and avoid potential pitfalls.

Press Releases

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Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

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Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
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Empowering Financial Excellence with Salmon Treasurer

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Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
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– Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software's commitment…

Designing a Robust and Scalable Treasury Policy for an International Business

Dechra Pharmaceuticals Preview Image

Dechra Pharmaceuticals is a global leader in the veterinary healthcare market, with a presence in over 50 countries worldwide. Founded in the UK in 1997, Dechra has expanded rapidly over the past two decades, both organically and through acquisitions, to become a major player in the animal healthcare industry. As the company has grown, so too has its need for a robust and scalable treasury policy that can support its global operations.

Before 2014, Dechra’s treasury operations were decentralised, with each subsidiary managing its own cash and treasury functions. This approach led to a lack of visibility into the company’s consolidated cash positions and foreign exchange (FX) exposure, making it difficult to manage risk and optimize cash usage. To address these challenges, Dechra implemented a central group treasury and adopted a netting system in Europe. The cash pool became a zero balancing cash pool and also expanded into the USA when the company  implemented a Treasury Management System (TMS) from Salmon Software, known as Salmon Treasurer, to support its treasury operations.

 

Key objectives of the new treasury policy

 

The primary objectives of the TMS were to provide better transparency into Dechra’s consolidated cash positions and FX exposure, as well as to enable the company to hold intercompany positions and capture zero balancing and netting movements. To achieve these objectives, Dechra established a close relationship with Salmon Software and implemented MT-940 reporting of bank account balances and transactions. This allowed the company to account for daily interest and taxes arising from those balances and transactions.

“Dechra manages risk in its treasury operations by centralising FX risk in the UK at group treasury”, explains Steve Card, group treasurer at the pharma specialist.

“For acquisitions, Dechra matches the currency of the acquisition price with borrowings in the same currency. For transactions, we use a daily zero-balancing cash pool for the majority of our operating subsidiaries to centralise FX risk.”

FX position is monitored throughout the month, with actions taken to reduce the impact of currency movements on the group P&L.

“No transaction hedging is undertaken at subsidiary level, nor is there any other translation hedging undertaken by the group. Dechra relies on the Salmon Software TMS for the processes, information, and reporting needed to execute this strategy efficiently,” Card further clarifies.

“Dechra’s approach to liquidity management and funding is reactive, using a combination of cash, committed RCF facilities, private placements, and equity funding. The company’s treasury policy requires that group leverage (total group borrowings/EBITDA) be maintained at a ratio of 2:1 or below. If the ratio rises above this, it must be returned to 2:1 or below within a 12-month period.”

Dechra’s investment strategy to date has been conservative, holding deposit funds only on a short-term basis because of the opportunistic nature of acquisitions and the desire of both the group and its rating agency to minimize outstanding debt. Dechra does not currently have any treasury KPIs in place.

 

A conservative approach to tech infrastructure

 

Card is a strong proponent of a policy-led treasury tech stack, rather than having software guide decision-making.

“Dechra is not an early adopter of new technology, and its treasury technology is based around proven technologies such as intercompany netting, TMS from Salmon Software, fed by MT-940 feeds from participating banks, and centralized daily zero-balancing cash pools,” he states. “Dechra has tailored these technologies to its particular requirements, especially in the areas of intercompany accounts, transfer pricing, FX exposure reporting, and dividend management.”

Dechra approaches capital structure management and debt management primarily at the time of assessing the funding structure of an acquisition. There are no hard and set rules, other than the leverage requirement to be 2:1 or below, which is a key element of the company’s treasury policy.

Press Releases

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Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

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Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
Woman looking out of the airplane window

Empowering Financial Excellence with Salmon Treasurer

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Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
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– Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software's commitment…

How Caldic transformed its treasury function with a new TMS

Treasury management system connectivity thumbnail - Rotterdam city

How Caldic transformed its treasury function with a new TMS

Caldic’s adoption of Salmon Treasurer helped the business to standardise processes and grow with scale, freeing up its treasury function to become a strategic part of the business

The world is changing: despite the pandemic, the cost of living crisis, the horrors in Ukraine, and the rising spectre of inflation, the business outlook for many companies remain extremely positive. Many are expanding and whatever short-term difficulties there might be, in the longer term, many are expected to grow and thrive. But this has created several problems across the global economy, for while companies grow, their treasury systems are often very out of date.

While spreadsheets had their day, they are not sufficient to cope with huge multi-national corporate’s (or even a smaller one) treasury needs. Other companies are plagued with too-small treasury teams or an ever-complex setup which means several companies require bespoke treasury management systems (TMS).

But even for the most well-established treasury teams, let alone those of start-ups and new entrants, it can be difficult to know where to start. Company needs vary enormously and there is no size fits all approach. So, what are the challenges, how did they arise, and what should a corporate do when their business is growing, and previous systems are no longer adequate for the job?

In 2017, Caldic, which provides inspiring solutions in life sciences and specialty chemicals, focussing on life sciences (food, pharmaceuticals, and consumer care) and industrial formulation markets, was bought by a private equity company. This transformed the business into a more centralised organisation, dramatically changing its treasury needs in the process.  Previously local management teams had been encouraged to take responsibility for their own profit and loss as well as funding and liquidity management, but now increased debt levels required Caldic to set up a central treasury function. Something had to change.

In 2017 Bas Baaten started as a Caldic’s first Treasury Manager in history, to ensure Caldic remained within the adequate liquidity spot and central debt servicing. After setting up a global cash pooling structure and an excel based short-term cash flow forecasting process, Caldic was ready for the next step.

Now it needed standardisation and automation, with a treasury management system that mirrored its move from essentially a family-run company to a private equity-funded level of entrepreneurship. Economic growth, fuelled by an expansion into developing markets, also spurred the need for change, specifically for a more in-depth and detailed cash overview, cash pooling, cash positioning and cash flow forecasting.

 

Choosing the right provider

 

The first need to be recognised was the need to move from local management to a more harmonised way of working. The company was expanding and needed to update its processes by implementing a system that would run the day-to-day operations. But there were challenges.

For a start, as in any company making huge shifts in how it operates, in particular the shift of taking the autonomy of the local management to arrange domestic credit lines and funding to group treasury. Although supported by cash pooling, dozens of IC loans and ample administration of those movements occurred, including the accrued interest calculations. Everyone wanted to know ‘where and when is the cash?’ Following that, Caldic had to consider which software provider was the right fit for its business.   Flexibility was the key: given Caldic was in full growth mode, any software needed to ensure it could grow and adapt with the company. At the time of making its software decision, it was making acquisitions of small companies, while merging with a similar-sized peer-based in Latin America. The merger of two different entities, combined with the ongoing acquisition programme shows that it is crucial to get a firmer grip and control of processes to stay on top of its cash positions and visibility.

It was becoming increasingly complex with every acquisition, and full visibility was needed, along with the ability to have daily reporting and monthly profit and loss statements. In the wider economy, cash was also becoming more expensive, another element that had to be factored in. At the same time, any new treasury software provider would also need to cope with existing processes and procedures that could not be changed overnight.

The specific needs for applications centred on visible cash management with real-time reposting and interfacing with bank portals. There was a requirement to centralise FX hedging, including central execution and deal capturing, which included an automated settlement process. Forecasting played an important role too, including data aggregation and data analysis over different time periods (weekly, monthly, and annually), comparing it to the allotted budgets. Another important function was monitoring positions and risk exposures, both on the FX and intercompany (IC) loan administration front. Caldic also required there to be an audit function, a third-party account for future changes to payment processing on the FX side.

After reviewing several potential providers, Caldic opted to partner with Salmon Software. A boutique TMS provider, Salmon offered to provide Caldic with the individual attention required during a treasury overhaul.  Unlike much of the competition, the company was able to offer a TMS that would fit with Caldic’s needs, as opposed to the other way around.

Many systems offer a prescribed way of working, a variation of Henry Ford’s dictum about the cars he would sell: “Any colour as long as it’s black.” To avoid that Caldic’s shortlist would be restricted to TMS systems that Bas worked with before in his career, Bas decided to team up with Dutch-based Treasury consultants Orchard Finance. After discussing Caldic’s functional and technical requirements, a TMS vendor selection process was executed. Several TMS vendors were identified as possibilities, but in the end, it was Salmon that won through.

The reasonable price and quality of the option of course played a role, but perhaps the most important element was the flexibility in both the software and with regards to flexible implementation approach. During weekly progress calls between Caldic, Orchard Finance and Salmon, implementation progress was monitored, and workload adjusted to Bas Baaten’s availability. Flexible interfacing was based off Microsoft’s cloud hosting service, Azure, allowing Caldic to operate in a separate environment, while also providing the ability to aggregate various sources to maximise efforts. Scalability, when new acquisitions are made, is also part of the system. Both incoming and outgoing sources can work with any file format required. Interfaces can be automated meaning no user intervention, while it also provided better cash visibility, making it easier to have in-depth insights on cash positions.

Perhaps the biggest benefit of the new TMS was it freed Treasury Manager Bas Baaten from the minutia of the day-to-day running of the function which gave him more time to concentrate on strategic decisions. It also allowed the treasury function to move from a reactive to a more proactive approach.

The system also created a central connectivity point, important for a company rapidly expanding. Local finance directors were able to input data from their business and geographical area, which could then be used in a logical manner in the TMS. Specific tools across the board also supplied not just connectivity but conversion to make data standardised across the board. Furthermore, the TMS also made it possible to take data from other systems. A core reason for choosing Salmon was its user interface – Caldic needed a system that existing subsidiaries could switch to without impacting their working practices. Salmons’ software did just that and allowed new subsidiaries – bought on through acquisition – to also latch on without problems.

Caldic's Integrations Schema

Another benefit was improved cash visibility. When Baaten – or anyone else – walks into an office and turns on a computer, whatever he wanted to see would be there on the screen. Previously this had entailed a lot of work and now it was done in the back office overnight. There is now one system with a single source, which has created dashboards that provide a complete view.

 

Benefits enshrined

 

Since adopting Salmon’s platform, Caldic has seen its processes harmonised, centralised, standardised, and benefited from its scalability as it has continued to grow and acquire other companies. From the automation of cash flow reporting between the ERP and Salmon Treasurer to improved visibility of the daily FX process workflow, Caldic’s treasury function has been enhanced.

The adoption of Salmon’s software has had an impact on Caldic’s bottom line. Treasury, who were previously bogged down with tediously manual tasks, can now take a greater role in the strategic decision-making so crucial to today’s treasury function. And this is only the beginning: Caldic plans to expand its treasury function further – as it does, new products will be needed.

TMS systems are crucial for today’s treasurers, but companies should take their time choosing the provider who is right for them. A provider should be there for implementation and be able to adapt its offering to each client’s specific needs.

Press Releases

Airplane in a sunset

Time to Fly: Aergo Capital In Control With Salmon Software’s TMS

| Uncategorized | No Comments
Watch the footage of the live case study presentation below. When manual processes across the financial function meet consistent growth and increasing complexity, treasury teams often look to the TMS…
Woman looking out of the airplane window

Empowering Financial Excellence with Salmon Treasurer

| Uncategorized | No Comments
Dublin, 18th of December 2023 – Salmon Software, a leading provider of treasury management solutions, is thrilled to announce the signing of a significant contract with Azorra, the relationship-driven aircraft…
Airplane

Reinforcing Dominance in the Aviation Industry

| Uncategorized | No Comments
– Salmon Software, a leading provider of treasury management systems, is pleased to announce LCI, a leading aviation company, as a new client. This contract further strengthens Salmon Software's commitment…