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Frank Douglass, Assistant Treasurer, WEX Inc.
WEX inc, formally known as Wright Express, is in the corporate payment solution area.
We provide services in the physical, digital and virtual payment areas.
We started here in Portland Maine, and we expanded beyond Portland to provide services
across the US, we also expanded into Canada and then internationally, we started our international
operations by buying a business in New Zealand, we moved over to Australia where we purchased
the largest fleet card provider in Australia, and last year we purchased a business in the
UK, corporate pay, we also made an investment in a company down in Brazil and they provide,
their main product is an employee payroll card
As the assistant treasurer, treasurer I would say I spend 40% of my time now purely on looking
at bank services and looking at how we are going to be moving money around, what our
global account structure and strategy is going to be.
A global account strategy
A strategy is really important in these times when treasury area have limited resources
so if you've got a plan out there, that can really help you make the most efficient use
of your time and your resources.
We were quite fortunate in the fact that we didn't have a large legacy structure that
we had to deal with when we were setting up these accounts. So I went the approach of
going straight overseas, to a bank overseas to see if I could open an account that way,
I worked through an introduction process where one of our banks introduced me to a bank overseas
and I took the ball from there and tried to open accounts with them. I worked with banks
here that have branches overseas and opening accounts that way and I would say it really
helped me define my vision and my focus for an international accounts strategy.
Challenge: Adapting to local cultures
One of the lessons I've learned as we opened accounts and made banking arrangements in
other countries is that other countries will have very different expectations of the services
that their banks will provide and also turn around times, customer service things like
that. So as we've gone overseas I've learned that we really need to adjust the local customs,
local expectations and rethink through my timelines when I'm planning activities over
there to be able to accommodate for that.
In the UK, we needed to open a bank account due to some M&A activity and it's not uncommon
in M&A activity here at WEX to be told, listen we are going to be buying something in a month
and we and we have to have bank accounts set up and we actually don't even have the entity
set up that we are going to be using to purchase this company with. So what it gets down to
is that there is always a big rush at the end. I went to one bank over there and this
was a local bank over there and I was told it takes 6-8 weeks to open an account, to
go through the whole process, well we didn't have 6-8 weeks. By that time I think we had
about 3 weeks left to do the acquisition.
* UK bank says 6-8 weeks to open account * Only 3 weeks until acquisition
So I went to a member of our bank group and they really worked with me to tailor a solution
to our specific needs. And they said, you know what, I think we'll be able to get this
done and they did. Within 3 weeks I had an open account.
Part two As we approached this process of creating
a global accounts strategy, I talked with a number of my peers and what I continually
heard from people is that there is poor visibility into the resources they have overseas so they
don't know how much cash they have, they don't know who has access to it.
Challenge: Visibility
Visibility is a challenge because one, what I tend to find with international accounts
at least in our business, at this stage of growth is that they are not accounts that
you look at everyday so there is not a broad corporate knowledge about these or broad corporate
familiarity about these.
Challenge: Limited Resources WEX, much like I am sure every other company
has limited resources in treasury, so it was very important to us to make process of managing
international accounts very efficient, flexible and very simple. So the process of getting
data aggregated into a single feed, into a single portal that we can upload really is
an efficient way for us to use our resources and that's very important to us.
Challenge: Control The problem with control is one, who can have
access to the cash and who can make arrangements for the accounts so it's very important that
you gain control of that straight away as soon as you do some M&A activity or as soon
as you do an acquisition.
Change Title: Solution: A streamlined approach So what we've done essentially is we've tried
to limit the number of banks that we use for our global accounts structure to just a very
few banks. And then within that what we've done is we've asked our banks, any account
we've got overseas we've asked them to send a SWIFT MT940 message and that gets sent to
a central hub bank, which we upload into our treasury work station every day. So everyday
I can look back and see the previous days transactions. I can see the previous days
balances so I have total visibility into our cash and total control over the cash as well.
It's really simple, it's really efficient and it fits very well into our plans and our
methodology for monitoring cash overseas. If we were to go out into each of these bank
websites, log on, download the information, put it into a format that we can use to upload
to our treasury workstation it would be easily 2 hours a day, if not a little bit more but
now it literally it takes us no more than 4-5 minutes to upload that information, it's
all at our fingertips so we've got complete visibility of our bank accounts.
Final Advice Final advice I would say you can never go
wrong talking to peers and finding out what their experiences have been with countries
and also with banks. My second piece would be to hold close the bank relationships that
you have developed here in the US. Those relationships will stand you in very good stead overseas.
Those banks are the ones that know you best and when a push comes to a shove and you need
something done, that relationship is going to be very important to making sure that you
get what you need.