Liquidity management thinks outside the box


The Holiday Inn Club Vacations management team prioritizes cash flow. The company currently owns 28 resorts across North America and is continually adding new properties, as well as renovating those already in the portfolio.

“We’re a very acquisition-driven company,” says Sasha De Gracia, director of finance and treasury services for Holiday Inn Club Vacations. “Over the past two years, we’ve added Tahoe Ridge Resort overlooking Lake Tahoe, David Walley’s Resort at the foothills of the Sierra Nevada Mountains and a New Orleans resort just one block from the French Quarter. . Our strategy is to create a memorable vacation for our owners by continuing to add resorts where they want to vacation.

Because acquisitions are always a priority, so too is liquidity. Unfortunately, a few years ago, cash management and cash positioning were significant challenges for the company’s six-member treasury team.

“Positioning the money would take two different team members over two hours each day,” says De Gracia. “We work with many different banking partners, leveraging them in different ways for different departments and different accounts. Cash managers would download cash balances and other data, consolidate them, and load them into an Excel spreadsheet. Then they would generate a report from Excel which they would send out to anyone who needed cash information, including me.

The forecast was also manual. “Much of the forecasting was done in Excel,” says De Gracia. “A member of the treasury team would look at the different lines of business to determine what the histories were telling us. The FP&A [financial planning and analysis] The group had their own forward looking model, and we would fit them both into Excel and create a cash flow forecast.

Holiday Inn Club Vacations decided to implement a TreasuryXpress cash management system to automate many of the tedious and routine cash management tasks. The company has established data flows from its banks so that balances and transactions are automatically transferred into the treasury solution. “We have integrated the BAI (balances and bank transactions) of all our banking partners into the TreasuryXpress system,” explains De Gracia. “Anyone with the appropriate permissions can access the system and see a consolidated cash positioning snapshot that is always up to date. “

This approach “has completely eliminated that two-hour per person process,” she adds. “Now a person spends maybe 15 minutes a day on it. In addition, automation makes treasury staff more interested in exploring the data coming out of the system. “It’s human nature that if you spend two and a half hours writing a report, you might not want to spend two more hours digging it for variances and measurements. This transition motivates our team not only to write the report, but to really take a look at what it says and what needs to be of concern to us.

Holiday Inn Club Vacations also leverages the forecasting capabilities of the cash flow system. “We have created budget codes that describe different types of payments and income,” says De Gracia. “The system places incoming and outgoing flows in these compartments, leaving those it does not recognize labeled ‘on hold’. Users can enter and assign budget codes to these transactions. Then there is an AI [artificial intelligence] component of the treasury system that predicts future cash flows for each sub-fund based on historical trends.

Staff can manually adjust TreasuryXpress forecasts as needed. “If, for example, we know that a big expense is out of the ordinary, we can go in and manually adjust the forecast to reflect that,” she says.

One challenge that arose during the implementation of the system was that the company’s line of credit balance was not automatically recovered. “We have a credit revolver linked to one of our operating accounts,” says De Gracia. “If the account balance drops below a certain threshold, the account automatically borrows from the gun to bring its balance to the specified level. The amounts fluctuate daily and the bank’s BAI files do not include the line of credit as it is technically not an account. We had the ability to dip into transactions going in and out of the operating account to find a balance for the line of credit, but to confirm that balance someone had to email the bank and wait for a response. We wanted this balance to come automatically with others.

Holiday Inn Club Vacations worked with TreasuryXpress to develop a custom solution to this problem: They created a dummy account in the treasury system that holds the revolver credit balance. “The system takes a snapshot to show where the balance is and then provides it with everything else in our accounts,” says De Gracia.

The company also uses its treasury system to support the management of bank accounts. “Like most large companies, we have a lot of accounts,” says De Gracia. “With all the different lines of business and activities that cross them, it is very useful to have a central data repository for maintaining bank accounts. We use the cash management system to store documentation including names of legal signatories and COBO [certification of beneficial owners] shapes. “

Holiday Inn Club Vacations and TreasuryXpress have also collaborated to innovate on this front. The problem, says De Gracia, was that credit card companies require an independent merchant ID for every outlet that accepts card payments at every resort. So, for example, each reception, restaurant, bar and spa on the premises of the resort will require its own merchant ID. In the past, the company used spreadsheets and a paper trail to track merchant IDs and link them to specific bank accounts. “If we closed a point of sale, then we had to manually discover the accounts from which the Merchant ID should be deactivated,” says De Gracia. “It could become very time consuming. “

The solution is a custom module within the cash management system that stores all of the company’s merchant IDs and associates them with specific accounts. “So now if we have to deactivate a point of sale, we know exactly which accounts this change affects,” says De Gracia. “It dramatically improves our visibility and helps us disconnect merchant credentials much faster. It also saves money, she points out: “There is no chance of a lag, where we could continue to pay fees because the cash does not realize that the merchant ID has to. be disconnected until the close of the accounting cycle, when we notice that the merchant has any activity for a while.

De Gracia says a lesson learned from this project is not to just take the technologies that vendors and banks are offering at face value. “Push your partners to create data connections and create the functionality you need,” she says. “Even if you need capacity that is not currently commercially available, there is still a viable workaround that can be created. The end result may not be perfect, but there is always room for improvement.

She adds, “I would also advise treasury professionals who undertake a project like this not to assume that everyone understands the implications of what they are doing. Sometimes you need to explain to your stakeholders what you are trying to implement and clarify what it means and how it will drive change for the business.


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