An Optimal Recipe for Global Payments
With more than a century of experience, Darling Ingredients today provides a global growth platform for the development and production of sustainable natural ingredients, including edible and inedible bio-nutrients. With a variety of processing operations in over 200 locations on five continents, Darling Ingredients creates a wide range of products and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, fuel, bio-energy, fertilizer and food service industries. Darling Ingredients Inc. is a publicly traded company (NYSE/DAR), headquartered in Irving, Texas and staffed by approximately 10,000 dedicated employees.
- Number of employees: ~10,000
- Number of entities: 120 legal entities
- Operates in more than 17 countries
- Uses the tm5 treasury management system worldwide
- Uses JD Edwards as its ERP system
- Processes payments with tm5 in 15 countries
- Central cash management
- Central payment processing using tm5
- 5.4 billion EUR in payments processed using tm5 annually
- 6 main banks
- 283 bank accounts, including 186 using tm5 as their electronic banking system and the remaining 97 using local systems
Back in 2013, following the carve-out from VION Food Group and before the subsequent acquisition by Darling International, the newly formed Darling Ingredients had to set up a brand new treasury department. This came with a review of banking relations and connectivity. Historically, cash management for European and US-based companies was centralized with four banks. Commercial payments and cash management activities in Asia, South America, and Eastern Europe were executed locally. Darling Ingredients Treasury asked Enigma Consulting, partner company of BELLIN, for support to perform a thorough analysis of the group-wide usage of banks, bank accounts, and payment products. The two prerequisites of the project for Darling was finding a system that can support all of their core treasury functions and can be implemented within a 6-8 week time period.
By working with BELLIN and implementing tm5, Darling aimed to achieve the following:
- Standardize and improve payment and reconciliation processes
- Reduce the total number of payment systems
- Straight-through processing
- Elevated security and control
- Central authorization and reduction of operational risks
- Improved daily cash positioning and interest result
- Streamline cross-border payments, specifically ones through intermediate banks
Treasurer, Darling Ingredients International
Darling’s payment model
The key features
Darling’s treasury team and BELLIN’s experts developed a comprehensive model for international payments with the following key features:
- Centralized group-wide payments in tm5
- As many payments as possible processed directly in tm5
- Automated processes
- An integrated dual approval process
- Cost-effective setup
With BELLIN’s help, Darling integrated EBICS to handle commercial payment traffic for all of their German entities and the cash flows with German banks. Following a great deal of immediate success and the simplicity using tm5, they decided to utilize BELLIN’s SWIFT service as their connectivity option for the rest of the world, specifically to tackle the consistent challenges involved with cross-border payment processing.
Key challenges: maintaining the control, visibility, and transparency of the payments and the data.
With 120 legal entities in more than 17 countries, Darling processes over 5.4 billion euros per year within tm5. This created an obvious need for a consolidated payment platform landscape, specifically with a cross-border connectivity option that suited their needs.
One of the most important requirements for Darling was that the system can support them on core daily treasury activities and can be quickly implemented. Following the groupwide analysis, Darling Ingredients Treasury and Enigma defined the operating model and business case for bank optimization and connectivity. The Payment Gateway of BELLIN was selected. For practical reasons, EBICS was implemented to handle commercial payment traffic for all the German entities and cash flows with German banks. The BELLIN SWIFT Service was selected for the connectivity to the rest of the world.
In this second phase, reporting via MT940s and treasury payments via MT101s was introduced. At the same time, a connection was established between BELLIN and the ERP system to support salary and commercial payment files. Darling Ingredients Treasury has successfully implemented the new operating model, effecting payments globally in one generic way, with authorizations maintained in one place, whilst improving their cash management on a daily basis.
As an early adopter of SWIFT gpi for corporates and a welcome addition the BELLIN SWIFT Service, BELLIN approached Darling Ingredients in late 2018 to gauge their interest in integrating the new and innovative corporate connectivity option. The unique value addition of SWIFT gpi for Corporates are as follows:
- Treasurers can initiate and track all of their gpi payments across all of their banking partners through a single interface
- Provides corporates with a seamless experience across banks with tracking, transparency and real-time notifications
- Enables corporates to integrate payment tracking information directly into internal corporate processes
- Provides insights into payment routes, including traceability on processing times, the number of intermediaries involved and the fees charged at each stage
Darling Ingredients became one of the flagship companies to implement the new SWIFT gpi for Corporates integration, effectively becoming one of the first companies to do so. And now we look at the value-added…
With SWIFT gpi for Corporates via BELLIN tm5, Darling Treasury now has full payment transparency and can follow payment location from A – Z. They have complete visibility of the status of the payment, available real-time, and can monitor for payment errors. In the event there are payment disputes or errors, Darling can pinpoint the exact location and responsible party that they would need to contact.
With BELLIN tm5 and SWIFT gpi for Corporates, Darling has been able to save more than 50% of time in processing payments and the reconciliation of data. An added bonus has been the maximum centralized control and increased fraud protection within the system.
The next steps for BELLIN and Darling Ingredients is maintaining our focus on delivering innovative solutions to modern problems while ensuring security and transparency is maximized.
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