It may be a back-office function, but automating treasury management processes at one NGO is helping to put a roof over the heads of vulnerable children in war-torn nations around the globe. Save the Children International already had treasury management technology in place, but had not implemented all the functionality it had to offer. A program to improve automation has saved time and increased visibility across the organization's complex foreign exchange dealings in troubled regions.
Save the Children International was formed in 2011 to create a global umbrella organization within which the various national Save the Children charities could channel their funds so as to be more effective. In effect, Save the Children International is a shared services organization. Funds are raised by national Save the Children offices for both local and global programs to benefit children. To simplify and maximise the impact, Save the Children International co-ordinates a range of services, including treasury. Edward Collis, Head of Treasury, says:
$1.5 billion is raised for international purposes, and that money used to be routed through a very fragmented system. There would be offices run by Save the Children UK, USA & Sweden, for example, in a place like Mogadishu, so there were high levels of duplication.
The Save the Children movement realised that it needed a services company that would do all the international programming work as a single entity.”
Deputy treasurer Asha Kumari describes the role the Treasury department plays:
We look after everything to do with execution and the funding of country offices, including managing compliance and sanctions.
This in a global Non-Governmental Organization (NGO) with an income in 2022 of $2.7 billion and 30 national members. Seventeen of those national members raise money for international programs.
From the outset in 2011, it was understood that treasury management would be important. Collis says:
There was recognition that treasury management does allow for much more efficient processes. So a Treasury Management application was implemented. There was a good foundational base, but the integration wasn’t where it needed to be. Since then, we have taken it to the next level.
Since joining Save the Children International in 2017, Collis and Kumari have been digitizing the treasury processes. Kumari says:
We were still using spreadsheets and manual processes like fax for foreign exchange confirmations. When you look at our operations’ in-country offices, we have colleagues working on a number of different awards [initiatives being funded], and there is a need to place accounting codes against these awards correctly.
Our members send us money in G20 currencies such as euro, krone and sterling, and we then convert that into US dollars. Then we buy the local currency from US dollars and send that to an office in the country where we are helping children.
The metrics around this gets quite challenging, and that is where the digital transformation comes in helpful as the volumes are high. We have over 500 bank accounts globally in some of the most challenging locations in the world, places like Yemen and Sudan.
Automation and utilization of all the functionality of the treasury management system was therefore vital. Kumari says:
We had the system, but we didn’t have a proper plan to get the team to use it more. As a colleague said, we had a Ferrari in the garage, but we never took it out to drive.
Save the Children International spoke to its treasury management application provider Coupa. Kumari says:
We worked with Coupa on the problem cases. We broke it down into different themes, such as cash management, visibility, liquidity, payments and compliance, and how to use the system as best we can. We started with cash management and the aim to get better bank reporting.
Each of the themes was systematically worked through to improve treasury processes. Kumari says:
We have got rid of manual processes, and it has helped the team do more value-added work. Where a system can do the work, it should do it.
Visibility has improved, and Save The Children International has influenced 90% of its banks to provide e-statements, which is not a common practice in many geographies. Collis says:
That visibility allows the Treasury team to manage liquidity, and we have removed re-keying and delays in bank reconciliation, so there is more accuracy. This reduction in re-keying allows finance colleagues to reduce the amount of time spent on completing bank reconciliations whilst also improving the accuracy and speed of the bank reconciliation completions.
The original foreign exchange process was highly manual. Now Save the Children International carries this out automatically, with electronic confirmations with foreign exchange partners”
The impact has been significant. He adds:
Foreign exchange (FX) at Save the Children International is the most complex FX that I have seen and in some really volatile currencies. The Coupa system does an amazing job of allowing us to clearly identify our FX position by providing us with the necessary exports into our ERP system.
Coupa is also at the heart of compliance, and using this functionality we understand that we are one of the few NGOs that are screening payments before they go out. Sanction screening of payments is really important given the high-risk nature of where we work.
With the technology already in place, how did Collis and Kumari get Treasury employees to trust the technology and do less manual work? Kumari answers:
People think the system will replace their job, so it’s explaining that the system will give you space to do better. The benefits have to be sold to everybody, as the only constant is change.
Making a difference
The adoption of all the functionality is providing greater transparency and process efficiencies both for the offices on the front line helping vulnerable children and for national offices raising funds. One example is in Ukraine, which has some different characteristics than other locations where Save the Children usually operates. Collis explains:
Ukraine is unique in that it is a tech-oriented economy with an advanced banking infrastructure and technology. We have been responding in Ukraine since 2014, but with the invasion last year, the local finance team were trying to pay tens of thousands of families. We utilized a fintech partner to build a bank payment upload file that allowed the small local finance team to process a high volume of payments to families and children.
In the same response in Poland, we had to set up our Polish banking and associated connectivity from scratch. Coupa was an amazing support for connecting our new Polish bank accounts to SWIFT in less than a week.
These initiatives mean that Ukrainian refugees can use their debit cards regardless of where they are located in Western Europe, even if they are displaced, and leverage the more advanced banking technology available. Coupa means we are putting processes around the cash we pay to make sure we have maximum visibility.
The Ukraine response is also an example of how the Treasury team is able to quickly meet new demands. Collis says:
We work really closely with the country offices. All of this automation has shown that if they need funding, we can be really responsive, as the level of administration has dropped. The system has really allowed us to take on high volume day-to-day transactions, and that has freed up a huge amount of time.
The Treasury leaders themselves feel some benefit, too, Kumari says:
When we get funds through to these difficult countries, it is so rewarding, as it is a child or a family that gets to go to school or have a roof over their heads.
Finance departments in all vertical markets in recent years have begun process and technology transformations. As ever with new technologies, if departments don’t extract and use the full range of functions in the technology, then the benefits may not be fully realized. The treasury team at Save the Children International has embraced a culture of digital transformation to maximize the opportunities of automation.