An Integrated Aluminum Company
J.P. Morgan helps global aluminum company gain efficiency and visibility over BRL* accounts
A global aluminum company based in Europe. It currently uses J.P. Morgan for their BRL liquidity and core cash management needs for all entities in Brazil.
At a Glance
- The company was eager to centralize its operations with a core bank in Brazil
- Counterparty risk reinforces J.P. Morgan’s position with the company, as it is highly risk-sensitive
- The company’s demand for a high level of automation in its treasury operations was key when selecting its banking partner (e.g. global file format (EDIFACT) for payments and new data on MT940 message for reconciliation purposes)
To cater to expected growth, and to operate more
efficiently, the company required:
- A full spectrum of cash management services, including supplier payments, tax payments and liquidity management
- A fully-integrated and globally consistent cash management platform to provide headquarters will full visibility
- A single global payment layout through EDIFACT (ISO currently under implementation) to ensure globally-consistent processes
- Most importantly, effective reconciliation automation
Clearing houses in Brazil do not allow invoice information to flow from the originator to the beneficiary bank, creating additional challenges to reconciling payments and receivables.
The J.P. Morgan Solution
Services were tailored to meet client specific local needs:
- J.P. Morgan added the invoice number for outgoing payments and additional account details in the MT940 statement, improving vendor and intercompany reconciliation
- The company leveraged its existing host-to-host connection (Morgan ACCESS® Host-to-HostSM Payments) from its centralized treasury in Europe in order to integrate local BRL payments to its multi-currency payment process
- J.P. Morgan’s ACCESS® OnlineSM, coupled with host-to-host connectivity using the EDIFACT format, provided the company with a secure and robust technology framework, account visibility and a bank-agnostic file format
- Local cash excess left in the demand deposit account (DDA) is automatically invested in J.P. Morgan time deposits via sweep
Elisabete Marchesini, Brazil Treasury Services Coverage
Full reconciliation of BRL payments was key for the client to centralize BRL balances in J.P. Morgan.
Automatic and improved standard process for payments, as well as cross-company liquidity management, as operating balances were previously on a non-interest bearing DDA.
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