We are delighted to feature the following article which has been written by Somil Goyal, COO at Adjoint.
Accelerating Digital is crucial to business success as we recover from a dislocated economic and social context. Experts and observers are talking about intelligent blocks that go beyond robotic automation to support this strategic activity.
In the first phase response to Covid-19 dislocation, company CFOs shored up their liquidity and cash management - be it in Europe or the US. This has already shone a light on current shortcomings, be they from banks or conventional technology systems. Most CFOs continue to suffer from cost, uncertainty and data quality issues in tracking and consolidating liquidity.
- Conventional methods are laggy, i.e. cash and information flow takes longer than reasonable to access and consolidate.
- They are lossy, i.e. transactions and balances have associated data but it frequently gets lost in reporting.
- And, they are expensive, especially compared to the current low interest rates.
It is no wonder that companies have to look at new offerings from fintechs and innovative banks. Tools like Adjoint Treasury use secure Open Banking APIs to stitch together data from conventional systems and banks, and give CFOs reliable, accurate, complete, instantaneous reporting and decision capability.
Clearly the second phase response will be even more crucial. Key need here is deploying capital buffers for rebooting business performance. Having a rich, liquid war chest puts a company in a position of strength. Now using that position to revitalise production, supply and distribution will be crucial. This will typically require review and adjustments to intercompany and cross-company agreements, e.g. financing, supply, distribution, sourcing, tolling, shared services, intellectual property.
For some time now companies have used tools to automate and digitise agreements. These include in-company workflow management, digital document storage, electronic signatures, etc. However these point solutions are not joined up, and also do not have features needed for rapid review and adjustments to reboot business, e.g.
- Combined oversight of agreements, workflow, terms and status
- Analysis and decisions support based on embedded key terms
- Ability to amend and execute across parties: quickly, digitally and end-to-end
- Tracking key terms without overhead of financial data sourcing and reconciliation
Such features are needed for adjustments that companies have to consider, e.g.:
- Differentiated credit and discount terms for dealers and customers to drive demand
- Dynamic usage of supplier discounts for supply chain resilience and margin protection
- Volume or speed incentives in tolling, distribution and other fixed margin services
- Forbearance on repayment terms and covenants for financing
- Targeted deferment or payment holidays for intellectual property
- Compliance and market changes like LIBOR replacement and BEPS roll-out, etc.
LCN Legal, world-leading experts in providing intercompany agreements for transfer pricing and corporate governance compliance, and Adjoint are collaborating to offer a set of tools for forward-thinking CFOs. Adjoint Treasury provides multi-party workflows on an easy-to-use, no-code platform with the following forms of specialist contribution from LCN:
- Embedded standard documentation: Companies create their own agile workflows with embedded precedent documentation provided by LCN. Thus users can manage intercompany agreements quickly, and in an auditable and compliant fashion.
- Bespoke templates: LCN can work directly with a company to create industry and transaction specific templates, which can then be accessed digitally from within the Adjoint Treasury platform.
- Specialist support: In addition to options 1 and 2 above, real time access to a team of senior lawyers at LCN can be provided as part of a workflow incorporating specialist input - be it for the provisions of additional tailored templates, specific clauses or a document review.
In order to commence on this digital journey, LCN also offers an online tool which enables users to quickly identify the key agreements likely to be required to support business and compliance.
We believe modern CFO tools are essential for recovering strongly and thriving in a post COVID-19 world. Reach out to discuss how LCN and Adjoint can help you achieve that.
LCN contact: firstname.lastname@example.org
Adjoint contact: email@example.com