Syngenta Crop Protection, the world’s largest agrichemical company, was spun off from parent companies AstraZeneca and Novartis and faced real challenges in cash flow management. Using Emagia, Syngenta created an infrastructure and efficient model for its cash flow process, significantly improved cash forecasting and prepared for SOX compliance. Emagia created levels of consistency and financial transparency to align the collections team with the corporate objectives of the company.
The Goal: Address issues around DSO & Cash Forecasting and maximizing cash flow
Following a recent spin off, Syngenta needed to build an organizational, comprehensive system around cash flow management that would meet the challenges unique to their business structure and quickly pay off billions in debt.
Syngenta met with three distinct problems:
- Inability to access real-time visibility into its receivables due to its complicated network of distributors, agents, dealers
- Cash forecasting inaccuracies because of irregular/long cash conversion cycles consequent of a seasonal business model
- Pressure to meet SOX compliance around receivables and cash flow
The time-consuming process of manually compiling and sorting receipts via their existing ERP system (SAP) proved to be sub par; their inability to gain real-time visibility into receivables across their 5000 farming customers in a complex network of dealers, agents and distributors affected accuracy and efficiency. Syngenta’s cash conversion cycle was highly dependent on agricultural cycles resulting in non-uniform cash receipts arriving 9-10 months after invoice. Another compounding factor was variable discounts extended to customers leading to inaccuracies in cash forecasting.
Syngenta was eager to show their employees that Emagia’s software solution to cash flow management would considerably improve individual effectiveness and consequently company performance. The Emagia solution offered a vehicle for automating time-consuming manual processes and its intelligent dashboard provided real-time, comprehensive data necessary for proper A/R operations. With improved cash flow management and increased visibility into receivables management, executives were better enabled to more accurately predict and monitor cash flow trends.
The Solution: Align receivables management with corporate goals
Today, Emagia provides Syngenta with Cash Inflow Manager, Emagia’s collection and cash receipt-forecasting tool. Bert McCuiston, head of credit, uses the Emagia solution for his collections team. “We used to forecast aggregate cash, but now we can drill down to specific customers,” McCuiston says, “it’s a lot more detailed, and Syngenta’s treasury really appreciates that.”
Emagia provides collections strategies that prioritize and monitor many of the collectors’ tasks driving the A/R team to better monitor and manage the cash collections process. Highlighted below are a few of the Emagia capabilities that customers appreciate and make Emagia best-in-class:
- End-to-end A/R portfolio management
- Strategy driven collector automation with emailing and faxing of invoice and dunning letters
- Workflow enabled deductions resolution
- Real-time cash forecasting engine
- Pre-built internal controls for Sarbanes-Oxley (SOX)
According to McCuiston, the exercise has put the subsidiary on the parent’s radar. “Nobody from treasury asked us to do this, it has elevated our position with treasury,” says McCuiston. “They came over to see what we’ve got. We’ve got better numbers but we also have a better relationship with treasury.”
Using Emagia’s built in functionality for clear audit trails and efficient reporting, Syngenta passed its internal Sarbanes-Oxley (SOX) audit with significantly less associated stress and time compared to similar companies.
Bottom Line Impact: Superior cash flow process, cash forecasting and faster compliance
Emagia’s specialized cash flow management platform gave Syngenta the tools to achieve control over its receivables.
- DSO reduction of 4.5 days
- Cash Forecasting accuracy improved up to 35% resulting in $3 million annually to bottom line savings
- Average past due balance dropped by $29 million
- Average deductions balance decreased from $2.9 million to $1.1 million
- Fast, accurate, less-stressful SOX compliance
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