Chocolate is a very global business. Just ask Jurgen Auerbach, the CFO of Ghirardelli Chocolate Co., who is on the road almost as many days as he is in his office at the San Leandro, Calif.-based confectioner. In particular, he is a frequent flier between California and Kilchberg, Switzerland, headquarters of Ghirardelli's parent Lindt & Spr
ngli Group.
This was a problem for Ghirardelli's finance department, which has no treasurer and needs Auerbach to be able to approve wire transfers in less than an hour at times. The solution: Wells Fargo Co.'s Commercial Electronic Office (CEO). These days, Ghirardelli gets nearly all of its cash management service through CEO, a single electronic portal, even as many companies resist moving any closer to straight-through processing or relying on Web-based, real-time systems.
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CEO represents the new paradigm in cash management–systems that are available anytime, anywhere. A company executive with access can always see the current status of any transaction or account. Because it uses the Internet, there's no infrastructure to build and maintain. Security concerns have been answered. CEO is also self-service; you almost never have to call the bank to get information or effect a transaction. It's built for straight-through processing and integration with accounting systems, even though Ghirardelli, like many corporate cash management customers, is not quite there yet. "We're saving massive amounts of time," says Ghirardelli controller Rick Gutierrez, who is usually the person trying to track down Auerbach.
Wells Fargo launched its CEO portal in the summer of 2000, and has been adding services aggressively ever since. Among CEO's offerings: domestic and international wires and automated clearing house initiations; account register maintenance; positive-pay exception item viewing and response; stop payments; item inquiry and research; loan information; interest rate sensitivity analysis; foreign exchange trades; letters of credit; trust account and pension plan reporting; purchase of Treasurys and commercial paper; purchasing card program management and procurement of indirect goods. "It's pretty deep now," boasts Danny Peltz, senior vice president for the wholesale Internet solutions group. Eighteen months after CEO's launch, more than 30% of the bank's 11,500 business customers are using it. During 2001, the number of registered users jumped to more than 12,000 from 2,250, Peltz reports, obviously indicating multiple users at some companies. One-stop banking has been a big hit–at least among the banks themselves. Of the top 25 banks, 15 now offer all their cash management services on a single platform. (See Buyer's Guide.)
Keeping Globetrotters in Touch
To make this kind of access work, it helps that Ghirardelli's treasury operations are fairly simple. It has a network of 17 depository banks, but uses just one bank– Wells Fargo–for concentration, lockbox and disbursements. However, because the chocolatier is global, a significant portion of funding generally is done through its Swiss parent and it has a line of credit at a Swiss bank. No matter, Web-based CEO doesn't differentiate.
The program has proved ideal for globetrotting executives like Auerbach. Gutierrez can originate a wire in CEO and send Auerbach an e-mail that it's waiting for approval. Auerbach, wherever he might be, can log onto CEO and, using his PIN and "security token" (essentially a secure digital signature), can approve and release the wire, Gutierrez explains.
For repetitive wires, managers can create templates on CEO, reducing the chance that wires might be sent accidentally to the wrong supplier, Gutierrez notes. Ghirardelli also can use CEO to send ACH initiation files to the bank. Daily reconcilement for both A/P and A/R is a by-product of using this service, he adds. "At the end of the month, there's very little left to do."
Lockbox reports are posted on CEO, where Gutierrez can download them the same day payments are processed and apply them manually to accounts receivable. Eventually, lockbox activity will be downloaded directly into the company's recently installed J.D. Edwards ERP system.
Clearly, when experts talked of an Internet revolution in banking, this is part of what they envisioned.
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