nanopay’s Liquid: Solving today’s liquidity management challenges
Fun fact, Coca Cola operates in more countries than any other company in the world. This, however, creates challenges for the company when managing their cash and liquidity. How does a company with approximately 500 brands, operating in 200 countries, manage their cash and liquidity? Now we don’t know the specifics of Coke’s treasury operations, but global companies like Coca Cola are all forced to operate under similar, costly conditions:
- Excessive banking fees associated with managing thousands of bank accounts
- Costly transaction fees, especially for intercompany transactions (typically 30% of all payments), including cross-border payments, which can take up to T+3 days to settle
- Steep operational costs due to reconciling payments and managing such complex finances
- Unreasonable amounts of capital trapped by ‘liquidity buffers’ (holding cash in accounts that may or may not need to be used based on different financial scenarios)
- Lack of visibility due to accounts and operations spread out across the world, under different subsidiaries, different currencies, and even multiple different banks.
So, this begs the question, “How does nanopay’s Liquid solve these challenges?”
- The self-service Virtual Account Management (VAM) platform enables companies with many bank accounts to rationalize the majority of their physical accounts and replace them with virtual accounts. These virtual accounts have all the capabilities of a physical bank account (and arguably more) and they link back to a physical bank account. Thus, one physical account could be holding funds for dozens of virtual accounts. These accounts can then be structured into any account hierarchy the company desires, based on entity, brand, product, currency, etc. This significant reduction in physical accounts also significantly reduces the fees and time associated with opening, closing, and maintaining physical bank accounts.
- The VAM platform enables real-time intercompany transactions for a fraction of the cost, as the majority of intercompany transactions can be executed from within the platform as ‘sub-ledger’ movements that do not require use of payment rails or correspondent banking. Thus, Liquid enables a more streamlined, centralized cash management structure with complete visibility. Additionally, view all accounts and transactions in real-time to make timely decisions and begin releasing trapped capital.
- The solution not only provides all the functionality of traditional liquidity management tools (sweeping, notional pooling, etc.) but has improved upon these tools. Sweeping can be automated based on pre-defined liquidity thresholds and can be executed 24/7. Pooling is no longer notional, but what we call ‘virtual pooling’ due to the virtual account structure pooling funds in one physical account. nanopay’s Liquid can even be used as a cost effective replacement to in-house netting solutions.
- Liquid enables clients to simplify reconciliation with straight-through processing. Real-time transactions matched to invoices enable a faster, more accurate, more cost-effective reconciliation process.
The features described above are not the only features available through Liquid. Some additional functionality includes:
- An intuitive dashboard
- An intercompany loan management tool
- Customizable reporting
- Instant notifications,
- A purpose built ‘rules engine’ that will help dynamically configure payment flows and manage regulatory requirements
- A world-class user authorization feature
These features create one of the world’s most advanced, scalable, secure, and cost-effective cash and liquidity management solutions.
To learn more about nanopay’s Liquid, watch our new product video: