HSBC sharpens business efficiencies

HSBC is offering a packaged e-banking solution for speeding up budgeting issues

But business targets and strategies are often hampered by the need to meet payment deadlines for suppliers or employee wages while receivables have not been collected in time. In challenging economic times like these, an effective cash flow management plan is especially vital for a business to survive and ultimately thrive.

Managing capital flows

Let’s briefly compare cash flows to the pumping of blood through a body’s veins and arteries. If there are blockages, it can affect the health of the whole company and curtail effectiveness.

Managing principal  cash comes down to an ability to balance receivables and payables – this may seem simple, but once firms reach a certain size, and business operations start to involve multiple partners, distributors and suppliers, it can become increasingly complex.

The management of account receivables inevitably becomes more convoluted once a company expands in scope, particularly in cases where it may have multiple branches operating on different payment dates, or using different banks.

Take a company with 100 payers for example: accountants in charge of account receivables would need to notify each payer when a payment is due, and then review every payment item from different bank channels for account receivables reconciliation.

This is often a meticulous, fraught and time-consuming process. And not all companies could afford the deployment of Enterprise Resource Planning (ERP) for accounting, treasury and management of account receivables/payables  which could be remarkably costly, so most enterprise accountants handle the process manually.

Banking solutions

But there is another option. Some top-tier banks, including HSBC Vietnam, have rolled out state-of-the art receivables reconciliation solutions based on an e-banking platform to assist businesses burdened by such matters.

“We realised that businesses had an urgent need to control their account receivables and payables,” said the Head of HSBC Vietnam’s Global Payments and Cash Management Department, Nguyen Thi My Hanh. “This process, if effectively handled, could significantly improve company’s cash flow position and allow our clients to use their cash more efficiently and to make timely decision in order to create more business opportunities.. That’s exactly where our expertise in Payment and Cash management comes in.”

Integrated solutions

HSBC are offering a full suite of solutions for managing of account receivables including features such as virtual account, consolidated collection reports, notification of receivables on deposit, and auto receivables reconciliation in parallel to a pre-due and past-due receivables notification.

These solutions employ cutting-edge cash payment and management techniques, helping firms control their account receivables effectively thanks to improved transparency, aided by products including, Receivables Advising on Deposit, Consolidated Collection Reports and Auto Receivables Reconciliation.

The virtual account solution helps improve operational efficiency and downsizing related expenses from account receivables reconciliation by identifying and attaching payer information to these receivables.

Updated information, enhanced transparency

In addition, the solution provides up-to-date information about all transactions in the virtual account, reconciling account receivable information quickly with enhanced transparency, while reporting real-time information about transactions thanks to the notification of receivables on deposit feature.

Businesses can source detailed reports on daily receivables which can be produced 24 hours a day via HSBC’s global online banking services like HSBCnet or HSBC Connect. HSBCnet also enhances visibility and control of all entities of a company and allows the customer management team to access to all entities’ account from one single platform.

After identifying payer information attached to these receivables, the bank will send an email or a SMS notification to respective payers and the customer. Timely notification of receivables, particularly large receivables, would help businesses use the incoming monies more effectively, while simultaneously cutting intra-company department or business-to-business liaison time.

“In parallel to the solution, businesses may also opt for notification on a pre-due and past-due receivables which would help them more effectively control receivables and help the payers proactively handling their payment obligations to avoid incurring fines from late payments,” said Hanh. “This helps to cultivate and cement a sustainable relationship between businesses and their customers.”

Essentially, the suite helps to mitigate risks associated with late paymentsand ensures effective operating cash circulation . The bank’s integrated receivables solution would also provide firms with a comprehensive analysis of their cash flow position . This would allow a business to have better cash strategies which will maximise trading opportunities which is very vital in the current challenging time.