Company and starting point
Schüco is one of the world’s leading suppliers of high-quality window, door and façade systems made from aluminum, PVC-U and steel. The company has 4,900 employees and 12,000 partner companies and operates in more than 80 countries. It achieved an annual turnover of EUR 1.575 billion in 2017.
Schüco has been a BELLIN customer since 2010 and uses the tm5 treasury management system. After the implementation and worldwide rollout of tm5, the work focused initially on cash management. The web-based system enabled Schüco to establish transparency and reliability when working with its subsidiaries in other countries. The second stage of the work was to harmonize payment processes internationally and move to central processing via tm5’s integrated payment platform.
- Number of employees: 4,900
- Number of entities: 40 subsidiaries in 30 countries
- Operates in more than 80 countries
- Uses the tm5 treasury management system worldwide
- Uses SAP as its ERP system
- Payments in 25 countries
- Central cash management
- Central payment processing using tm5
- Payments of EUR 1.2 billion processed using tm5 (equivalent to 80% of the group’s total volume of payments)
- 5 main banks
- 200 bank accounts, including 180 with electronic bank statements and 120 with payment transactions
As an international company with over 40 subsidiaries and payment transactions in 25 countries, Schüco used numerous electronic banking solutions including some with manual processing.
This led to a lack of transparency, significant costs for maintaining the individual solutions and increased risks due to manual processing and paper-based signing authorities. With the global rollout of the payment solution in tm5, Schüco wanted to achieve efficiency, transparency, visibility, security and reduced running costs for international payments.
Head of Group Treasury, Schüco International KG
Schüco’s payment model
The key features
Schüco’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
- Integrated dual approval process
- Cost-effective setup
A milestone in the project was incorporating all subsidiaries into the extensive banking agreements and granting worldwide authority for all accounts to central treasury (corporate seal). tm5 enables Schüco to centrally manage all user rights and roles. Treasury can independently grant and withdraw signing authorities in the system. Schüco can therefore carry out all treasury processes securely using dual approval, in accordance with compliance requirements and in a decentralized way.
In addition to efficient payment processing, the integrated central rights management capability empowers treasury to act directly at any time when there are staff changes. An otherwise time-consuming exchange of correspondence has been replaced by the system’s digital process.
In view of the company’s fragmented banking landscape and its requirement to be able to process individual payments, credit and debit payment runs, HR payments and payment files generated from other systems directly in tm5, Schüco identified a new structure for the format and communication channel architecture. In order to cover all countries involved in Schüco’s payment transactions, Schüco focused on a three-pronged approach that has been followed step by step:
- EBICS connection to banks in Germany and Danske Bank for Scandinavian and Baltic countries
- Use of Deutsche Bank’s Global XML format for ten countries in Europe, four countries in Asia and two countries in the Americas
- Global EBICS connection with BNP for France and Morocco
Step 1: EBICS for German subsidiaries, Scandinavia and the Baltic States
tm5 was first implemented in 2010. Initially, the payments module was only rolled out to the subsidiaries in Germany with DTA/DTAZV via EBICS. In order to accommodate the largest possible volume of payment transactions in tm5, new formats and communication channels had to be implemented. The previous fragmented banking relationships were overhauled, resulting not only in increased transparency and process security, but also a reduction in costs. Seven Scandinavian and Baltic countries were then connected to Danske Bank via MT101 and EBICS: Denmark, Finland, Sweden, Norway, Estonia, Latvia and Lithuania.
Step 2: Global XML for Europe and the world
The next step involved connecting 17 countries to Deutsche Bank via Global XML and host-to-host, including ten countries in Europe and seven others worldwide. With the host-to-host connection, Schüco covers Great Britain, Belgium, the Netherlands, Poland, the Czech Republic, Turkey, Portugal, Spain and Italy in Europe; China, Singapore, Thailand and Vietnam in Asia; and the USA and Brazil in the Americas.
A focal point at this step of the project was incorporating all subsidiaries into the extensive banking agreements and granting worldwide authority for all accounts to central treasury (corporate seal).
Side note: the entire digital process of payment processing, reconciliation and account statement retrieval in detail
Schüco’s ERP system generates the necessary format for the subsidiary. In accordance with the dual approval process, this is authorized in tm5 either by the subsidiary or central treasury. The payment file is then forwarded to Deutsche Bank via the host-to-host connection for execution. After validation of the payment file by Deutsche Bank, a corresponding pain.002 payment status report is provided for tm5. Dedicated reference fields and standard ISO codes enable fast, transparent reconciliation. Finally, Schüco receives the electronic account statements in SWIFT MT940 format, which tm5 automatically assigns.
Step 3: Global EBICS for international payments
Finally, together with BNP, the use of the French payment format CFONB XML was achieved via Global EBICS. Schüco uses CFONB to process payments in France and thus the payments of the company’s largest subsidiary. Schüco also uses the connection for French direct debits. Payments in Morocco are processed via BNP.
The project in a nutshell:
From the starting point of a fraud-prone, expensive and completely fragmented banking process, Schüco has now established a centralized solution for efficient, transparent, secure and cost-effective payments in tm5. Schüco now processes 99% of international payment transactions on tm5’s integrated payment platform.
The fully digital process in tm5 enables account statements to be imported automatically and processed seamlessly. Managing user rights centrally and adopting the corporate seal results in security, efficiency and transparency.
With its three-pronged solution involving EBICS, Global EBICS and host-to-host, Schüco has established the right channels and formats, stable processes and a very cost-effective solution to meet the requirements specific to the regions in which it operates.
- Integrated central payment platform for the whole corporate group
- Integrated minimum dual approval for maximum security
- Digital authorization of payments via corporate seal
- Automatic importing and seamless processing of account statements in tm5 and the ERP system
- Cost-effective format and communication channel architecture for group-wide payments
Let’s get in touch!
Interested in learning more about our solutions? That’s great.
Because we’d like to learn more about you. So give us a shout.