Process Automation and Visibility Are the Lifeblood of a Lean Treasury Team

A small niche of the global pharmaceuticals sector, the plasma industry manufactures life-saving drugs using living cells found within human blood. Medications built on blood plasma generally treat diseases that are relatively rare. Still, it’s a fast-growing market sector, projected to expand from worldwide sales of $31.4 billion in 2021 to $45.7 billion by 2027.

Keeping up with this demand requires plasma centers to collect more than 40 million liters per year from donors around the world. Perhaps partly because the U.S. allows companies to pay for plasma donations and partly because of the strict U.S. regulations around blood-plasma quality, about 70 percent of the world’s supply comes through the United States’ more than 1,000 plasma centers. Once these organizations collect blood, they separate the plasma from the white and red blood cells, returning all but the protein-rich plasma to the donor. Then they freeze the plasma at a temperature of -35° to  -40° Celsius or colder, so that it retains the chemical characteristics which make plasma so valuable.

The ultra-low-temperature freezers required for plasma storage are the specialty of Post Falls, Idaho–based NWR, Inc. “Approximately 30 years ago, a refrigeration technician named Ken Wilkinson was servicing equipment built for plasma storage when he saw the opportunity for a more cost-effective and efficient design,” explains Scott Carpenter, CFO of NWR. “He started to design and build freezers that operated in the -35° to -40° Celsius range, enabling the capability to flash-freeze.”

Wilkinson’s freezers were so effective that the company he launched has grown to support approximately half of the plasma centers across the United States. NWR remains a fairly small organization in comparison with the customers it supports, but it consists of more than 40 legal entities. In addition to a holding company, the business includes manufacturing companies and investment companies to support the capital needs of growth.

“Plasma is in high demand globally,” Carpenter says. “Our customers are growing rapidly, and we are growing so that we can continue to support them. The number of plasma centers we support has increased about 30 percent in just the past four years.” That rapid expansion has increased the organization’s need for capital, as well as management’s focus on treasury processes. And a couple of years ago, those processes were extremely out of date.

“Like many similar companies, we had treasury processes that were very paper-based and Excel-oriented,” says Savanah Reilly, corporate controller. “They were manual and disconnected, so it took us a lot of time and effort to put data together in a way that enabled us to do analysis. That hampered our ability to make timely decisions. It was frustrating. We had a lot of data, but that didn’t really matter when it might take us a month to pull it together in a way that was useful for decision-making.”

Just tracking key information about the organization’s legal entities was difficult. “With as many legal entities as we have, we were drowning in organizational documents,” Reilly notes. NWR tracked legal entities, bank accounts, account signers, officers and directors, business registrations and licenses, and tax IDs either on paper or in spreadsheets.

Managing cash flows was another challenge. “We were manually reconciling the bank accounts for all our entities,” Reilly says. “Staff members were logging into each bank’s portal multiple times every day to look at cash flows to and from our different accounts, then putting that information into spreadsheets. It was inefficient, and continuously logging into and out of bank portals created a security risk.” Plus, Reilly adds, short-term cash forecasting was nearly impossible. “We would export some information out of our ERP [enterprise resource planning] system to Excel, then create forecasts within spreadsheets. But even getting to a reliable cash flow statement was cumbersome, at best.”

The team realized they needed more sophisticated treasury technology. “Our president wanted to take NWR to the next level, and that meant focusing on efficiency and transformation in everything that we did,” Carpenter says. They surveyed the landscape of solutions for both treasury management and legal entity management. The team selected the Treasury4 platform because they felt it would provide easy access to the information they needed, without more complexity than they needed.

“It also provided a self-service model,” Carpenter says. “Savanah and I were constantly getting pinged for the same information from our third-party attorneys, accounting firms, etc. And I’ve learned over the years that if you want to have a life outside of work, you need to enable people in other areas of the company to answer their own questions.”

NWR deployed the Entity4 module, which provides tracking of entity registration information and offers a calendaring feature that can track timelines for state and local business-registration renewals. “It’s now very easy to see who the signers are on a given account, or who the registered agent is for a particular entity,” Carpenter says. “Even something as simple as an organizational chart is much easier to visualize with this new tool.”

Better yet, the system includes document management functionality, which has enabled Reilly to retire many of the paper files she used to maintain. “Now, rather than filing cabinets full of paper, we have all our entity information in one place,” she says. “The dashboard that shows all the upcoming deadlines also enables us to click through to legal documents when we need them. And if our attorney needs something, he can go in and access it himself, really easily.”

See also:

• Small Company Excellence Award in Technology Excellence—TeamViewer: “Gaining a Real-Time View of Global Cash”
• The on-demand webcast celebrating this year’s Alexander Hamilton Award winners in the category Small Company Excellence
• The 2023 Alexander Hamilton Awards in Treasury Transformation

NWR also deployed the Cash4 module, which connects to the company’s banks via an application programming interface (API). The system automates collection of daily balance and transaction data, assigning each transaction to categories using predetermined definitions and rules. It also automates reconciliation and provides a search capability that the legacy Excel spreadsheets did not offer. “For example, if someone wants to know whether we paid taxes in a certain state in 2020, we can do a quick search and find that,” Reilly says.

The automated categorization sorts transactions by entity, by function (e.g., operations, investing, financing), and by payment type. This enables the NWR treasury team to build a daily cash flow statement based on transactional details from the banks. It also enables the team to more easily spot opportunities to better utilize cash.

“We are a borrowing company, so efficiency means taking advantage of cash whenever we can,” Carpenter says. “Shortly after we rolled out this treasury system, we were in a meeting looking at the dashboard and noticed that some cash had been sitting in one of our accounts for several days. We had a significant draw on our line of credit, and when the cash in question came into our account, there was no corresponding outbound flow to reduce the line draw. We pointed this out to the bank, and not only did they end up moving the cash for us, but they paid us some of the interest we would have earned had they moved the funds when they were supposed to.”

By dramatically increasing visibility into their cash flows, the NWR treasury and finance team also positioned themselves to better support the business: The company is now evaluating whether to start paying vendors on behalf of its customers, to reduce the number of discrete invoices the customers receive and pay. “To do this with our old spreadsheet model, we would have had to add 10 more people to manage it all,” Carpenter says.

“The size of the company does not dictate the complexity of the organization,” he concludes. “Efficiency is just as important—maybe more important—for a company our size as for a Fortune 500 business. To move forward with this project, we had to have the right audience within the organization. But once we gained the support of management, we discovered that there are a lot of tools out there that can relieve treasury and finance teams of their manual workload. It’s worth spending the time to figure out whether any of them is right for your organization.”