Creating an Integrated System: Interview with

A privately held $500 million company with a two-person treasury operation can find affordable technology and use it to achieve a high degree of automation and straight-through processing if it finds the right formula. For Chicago-based, the first step is finding the right people. Director of treasury Philip Mattes joined in 2007 from PricewaterhouseCoopers, where he had spent eight years as a corporate treasury consultant, helping companies improve their treasury functions and choose and implement treasury workstations.

Then in 2008, Sunil Patel was hired as senior treasury analyst. Patel had worked at La- Salle Bank as an implementation manager and served as treasury analyst at Schwarz Supply Source before joining CareerBuilder. Treasury
reports through vice president for corporate finance Bill Razzino to CFO Kevin Knapp.

With the team in place, it was a matter of choosing the right technology and configuring it for maximum efficiency. One key was replacing spreadsheets and a lot of manual entry with a new Kyriba treasury workstation. Another was moving to electronic file transmissions connected to a streamlined banking structure that uses Bank of America for international cash management and U.S. lockbox, and JP Morgan Chase for the rest of domestic cash management.

Add a money-market investment portal, Institutional Cash Distributors (ICD), that interfaces with the Kyriba workstation, Axiom custom cash application software as part of the revenue system, and a lot of patient interface
building, especially with the company’s legacy Lawson accounting system, and the result is a high percentage of treasury and accounting transactions and reporting that never requires human intervention.

CareerBuilder has 22 U.S. and 14 international offices, and 88 bank accounts in 16 countries across Europe and Asia. Depending on a location’s requirements, there is one stand-alone bank account per legal entity per country or a zero balance account structure, with all reporting done automatically through Kyriba, Mattes says. “It used to be all Web sites, spreadsheets and paper, but now we get it all electronically through the workstation,” he explains.

It helps that CareerBuilder is a high-tech company with a bias toward technology solutions. The online job site provides job postings and related services to employers, recruiters and staffing firms. Job seekers come to the Web
site, enter their search criteria and review the listings that match their skills and requirements. “We compete with,” Mattes says. “They’re larger internationally but we’re the largest domestically.”

To automate receipts, Mattes and Patel chose a lockbox system from Bank of America that uses two lockboxes identified with legal entities but just one reporting and application stream. About 90% of the company’s roughly 6,000 incoming payments a month are checks and 10% electronic payments. A nightly file transmission from B of A contains the check information.

“The lockbox captures the check and remittance information and passes it to us electronically,” Mattes explains. “We then feed it through our revenue system, Axiom, which scans for invoice numbers and applies the paymentsto the customer accounts. We get about a 78% hit rate for automatic application.”

For disbursements, CareerBuilder’s centralized AP function exports daily files from the Lawson AP module to its banks. Two files go to JP Morgan Chase, one containing check information for outsourced check printing and the
other the information on ACH payments, and a third file goes to Bank of America for international electronic payments. Outgoing payments are about 40% checks, 40% ACH and 20% international payments. “The file transfers are all done automatically using secure [file transfer protocol], Mattes says. “There’s no more logging onto Web sites.”

Mattes, who was well acquainted with the various treasury systems offerings, says the choice of Kyriba was fairly straightforward. “We’re pretty much a vanilla treasury operation,” he notes. “We don’t use derivatives. We don’t have debt. We really liked their softwareas- a-service delivery method, and the cost was certainly attractive.”

Information reporting is daily, it’s automated, and it’s all done through Kyriba, Mattes explains. “We get all the bank account data for same day and the previous day. And we monitor our cash position on a dashboard.”

The benefits of an integrated financial system based on Lawson and Kyriba are considerable. “Before Kyriba, for us in treasury it was a lot of logging onto individual bank Web sites for daily reporting,” Mattes says. “Now it’s all consolidated in one system. Everything is automated. We have on-demand visibility into all our bank accounts. That was our first goal.”

But the benefits go far beyond treasury. “Once we had the treasury reporting automated, we worked to leverage that information with the accounting department and use the information in Kyriba to automate some of
their tasks,” he adds.” They were using spreadsheets and doing manual entry. By interfacing Kyriba with the accounting system, we saved them a huge amount of time.”

The benefits came largely from an interface with the general ledger, the first part of which records issued checks. “When checks clear, Kyriba sends that information to the Lawson GL. That keeps our GL in synch with the bank records of what checks have cleared and what checks are still outstanding,” he explains. “The second part of the interface automatically assigns GL coding to cash transactions.”

Mattes says Kyriba uses rules to code transactions for the general ledger. “For example, take the weekly payment we make to American Express for our corporate card charges,” he says. “When that payment comes through Kyriba from the bank, the system reads the bank account number, three-digit BAI code and the keyword ‘American Express’ in the text. That’s enough to trigger the rule for the American Express payment and to debit expense and credit
cash automatically in the general ledger.

“We’ve created rules that result in 75% of cash flows being applied automatically in the GL,” he adds. “The accountants only have to deal with 25% manually now.”

One of the final steps in the automation process involved linking Kyriba, Lawson and the ICD investment portal. CareerBuilder invests about $65 million in cash through ICD. “The treasury analyst buys or redeems investments through the portal,” Mattes says. “The trades flow into Kyriba so that we can see the balance in our cash position and then [they] are journalized and passed on to the GL without any manual involvement. We did that about three months ago. It’s really slick. It’s working flawlessly.”

Treasury & Risk Magazine
February 2011