Heinz Rotzoll - Implementation of a Cash Pool / Optimisation of Cash Management

Project title	Implementation of a cash pool structure / optimization of cash management
Company	International logistics group (private equity)
Industry	Contract Logistics, Freight Management, Private Equity Shareholders, eight companies and 60 sites in Central European Sub-Region (Germany, Austria, Switzerland)
Revenues	About EUR 380m in Central Europe (CE)
Number of employees	About 2.900 in CE
Own area of responsibility
Revenues/Budget	No revenues; budget of finance area about EUR 1.5m
Number of employees	Leadership: Management of about 30 employees, thereof 5 direct reports SSC (Shared Service Center) Finance (Onshore SSC) SSC transactional finance and accounting processes in India (Offshore Accounting Factory)
Background for the assignment	Implementation of a standard requirement for a large, internationally operating private equity portfolio company
Situation within the company	Post-merger integration phase, business combination of the contract logistics and air and sea freight divisions (worldwide) High liabilities from purchase price financing Requirement to comply with loan agreements (“covenants”) Need to place cash management under central management and improve cash position significantly
Customer	Private equity shareholders
Autonomous role	Director Finance (authorized representative) Central Europe
Assignment	Realization of a European cash pool structure and implementation of a central treasury function with the following objectives: Simplification and harmonization of the banking landscape and reduction of transaction costs Securing financing and liquidity planning Increasing the efficiency of capital employed in current assets (net working capital, NWC) Ensuring compliance with contractual requirements (“covenants”) from the sale and purchase agreements (SPA) for cash performance Sustainable improvement in cash flows from operating activities, reduction in interest charges from purchase price liabilities, improvement in financial result
Measures	European Cash Management Project Conversion of the banking landscape to a large global credit institution as the company’s leading bank for Central Europe Implementation of an efficient cash pool structure that complies with civil law regulations Automatic daily zeroing of all bank balances and cross-currency cash pooling Implementation of a central treasury function Management and monitoring of the cash pool including contractual bases Execution of payment transactions Preparation and consolidation of cash planning (daily and 13-week cash flow forecast reports) Interest and currency management Sale of assets not required (incl. sale and lease back of real estate)
Achieved results/outcomes	Cash pool organization Successful implementation in accordance with civil law regulations Monitoring and management of cash pooling Management of liability risks Treasury function Successful establishment of a central treasury function for the companies in Central Europe Ensuring solvency at all times Provision of reliable cash planning and timely cash reports Sustainably improved cash flows and financial results
Special feature of the project	No alignment of interests between the cash pool leader and the companies connected to the cash pool E.g. balance between rights and obligations arising from the cash pool contract / liability issues

Special features with regards to the style of leadership:

I ensured close and trustful cooperation in this project.

Providing reliable cash planning and timely cash reports requires the cooperation of various departments and individuals
From the company’s point of view, this is a “common problem” that can only be solved together
Establishing and maintaining contacts with various contacts at Group and company level as well as with the SSCs at BPO service provider level
Implementing and leading regular conference calls to discuss performance and initiate measures to improve KPIs

I used “Job Design & Assignment Control” to ensure clarity.

Reviewing the organizational structure, updating job descriptions and clearly assigning activities and responsibilities
Adaptation of the organizational structure in Finance & Accounting by implementing a treasury function
Handover and promotion of personal responsibility, coaching and induction

I improved the framework conditions for success.

Providing clear definitions of key performance indicators (KPIs) and ensuring reliable ongoing measurement of these KPIs
Provision and automation of reports in relation to KPIs
Elimination of technical problems
Implementation of a treasury software solution
Optimization of the existing ERP system/conducting training courses

I dealt constructively with stress and conflicts.

Coordinating the negotiation of the cash pool contracts between the parties (Group Management/Group Treasury, banks, local management)
Constructively bringing about clarifications and decisions regarding the implementation of civil law provisions for the cash pool contract
Acting as an intermediary to achieve a balance between the interests of the cash pool leader and the respective Group company connected to the cash pool against the background of liability risks
Using appropriate negotiation skills and good communication skills to ensure relaxation / de-escalation in stress and conflict situations