«Enterprise Clearing Centre (ECC)»

Enterprise Clearing Centre (ECC) is a exclusive banking service for a bank’s corporate customers.

When provided, the service would ensure financial management of the bank’s corporate customers: monitoring, control, and management of financial flows within enterprises in real time.

When running, the ECC system allows the bank to create and fully automate additional unique banking services for corporate customers with a geographically distributed structure and served by the bank’s branch network.

This comprehensive organizational and technical solution involves the very software product «Enterprise Clearing Centre (ECC)» as well as the Remote Banking System BS-Client.

The «ECC + BS-Client» complex would enable the bank that has corporate customers to solve a wide range of tasks within financial and economic areas — from status monitoring for transactional and personal accounts of subdivisions as well as of movements of funds against them to generation and full control of execution of subdivisions’ budgets.

Yet another important feature of the «ECC + BS-Client» complex is its capability to easily and flexibly integrate with other software products applied for corporate management and financial accounting (accounting systems, ERP systems, ABSs, etc.).

Multiple largest banks, including VTB Bank, Gazprombank, BANK URALSIB, Bank Petrocommerce, Sviaz-Bank, Vozrozhdenie Bank, NOMOS-BANK and others are applying ECC for exclusive corporate customer service.

Advantages

Advantages to use the system for the bank:

Advantages to use the system for the bank’s customers:

Cementing relationships with corporate customers by way of rendering additional unique services, raising customers’ motivation to work with the bank; Concentrating accounts of corporations, their subsidiaries, and affiliates within the bank’s structure, raise balances on the bank’s accounts as well as volumes of transactions through the bank; Integrating the bank’s infrastructure into a customer’s financial back office; Commanding loyalty of customers through their usage of the bank not only as a settlement instrument but a supplementary own financial management tool as well; Ensuring an additional revenues source from the legacy IT infrastructure.

Corporate funds saving through hands-on finance management; Ensuring transparency of the corporation’s financial status and cash flows; Ensuring a low cost of service to a single client as the total cost of the ECC solution is distributed among multiple corporate customers of the bank; Ensuring the capability to ’technically prohibit’ expenses from accounts of subdivisions, subsidiaries, and affiliates of a corporate customer at the level of payment documents, provided that the corporation’s financial top management has not accepted them; Using informational and technological, communicational, hardware support of the bank (outsorcing of the bank’s IT infrastructure).

Tasks of bank customers to resolve: Fully picturing the current status and allocation of financial resources in real time; Controlling (preliminary and subsequent controls) cash flow movements; Accepting (’allow’ mark) transactions performance (or ’technical prohibition’ of transactions performance if there is no acceptance mark); Planning cash flow movements (generating budgets for cash flow movements, calendar of payments); Generating a centralized database of regulatory and reference information; Ensuring highest possible transparency of the corporations’s financial flows; — Analysis of cash flow movements; — Analysis of subdivisions’ account balances; — Analysis of flows broken down by types of finances; — Analysis of finance movements broken down by analytical indicators; — Analysis of performance of the budget for cash flow movements), etc. Ensuring the capability to generate reports for management of different levels: — Consolidated reports; — Reports with subdivisions breakdown.

Specific features of the solution: Covers the whole financial structure of the corporation taking into account its organizational, geographical, and project composition; Automates activities of corporate treasury (department of finances) and its subdivisions with different levels of centralization and geographical distribution of functions; Operates in real time; Creates an e-workflow system; Integrates with ERP systems and banking systems (bank-client). Organizes a common information system for corporate management.

The customer can be provided with all basic functions and features of the ECC system individually combined or within a complex, thus enabling the bank to adapt services to be provided to corporate customers in accordance with their needs.

Basic features

The set of ECC features applied by a certain corporation can vary depending on its current and future needs and tasks to be resolved.

Functionality can be gradually enlarged thus allowing to start with a minimal set of functions and features and progressively add new ones («from simple to complicated»).

Centralized maintenance of regulatory and reference information (RRI)

EEC maintains RRI through populating and updating system directories/registers used to support business processes.

Directories/registers are sets of data that are rarely updated in daily activities (e. g., a list of organizations, banks, accounts, etc.) but are frequently used to generate and process various documents. Master data usage ensures that data input errors are avoided as well as increases the speed of document population.

The standard configuration supports the following ECC directories/registers:

The «Organizations» group of registers: — Register of Organizations (including counterparties) — Register of Organizations’ Accounts — Register of Territories — Register of Groups of Organizations List of Banks register Register of currencies with exchange rates history

The «Structure» group of registers: — Register of Parent Companies — Register of Structures — Register of Responsibility Centres — Register of Planning Periods The «Analytical Classifications» group of registers: — Register of Budget Classification Codes — Register of Projects — Register of Agreements

Composition and structure of analytical classifications can be easily adapted to needs of individual bank customers.

Monitoring of cash flow movements

Algorithms for documents movements within ECC

Monitoring of cash flow movements is ensured through collection of full information on actual execution of operations by the corporation’s subdivisions. Transactions involving cash flow movements within ECC are recorded in accordance with results of performing e-workflow algorithms: Monitoring of balances on subdivision’s transactional accounts; Monitoring of cash flow movements broken down by appropriate analytical attributes; Real time monitoring of execution of a budget for cash flow movements; Monitoring of status of individual e-documents; Status monitoring for lists of groups of e-documents (through the system of filters).

ECC provides customizable algorithms for movements of documents: Against control level; Against analytical detail level; Against process automation level.

When combined, the customization capabilities enable various schemes of documents movements, which help arrange the corporation’s activities in line with its individual needs.

Maintenance of the budget for cash flow movements (limits, plan of receipts)

A budget for cash flow movements is a financial plan of expenditures and receipts composed for a Group of companies, Corporation, Holding and broken down by organizational and financial units over a certain period (year, quarter, month). Revenue and expenditure part of such budget refers to sources of receipts and targets of expenses, usually presented as a classification.

Within ECC, a budget for cash flow movements is generated through entering limits of expenses and a plan of receipts.

The capabilities of classical budget maintenance are enhanced within ECC:

Depending on the corporation’s needs, the structure of budget lines can be enlarged with other analytical indicators, such as project, type of funds, type of settlements;

Different planning periods can be set for different items of receipts and expenses: current expenses can be planned by quarters, whereas investment expenditures can be planned by months;

Added can be budget execution control settings (setting for non-limiting, setting for admissible over-limit amount);

Multi-segment control of limits.

Accounting of receipts

Financial receipts can be accounted as follows:

In the automated mode through import of documents into the system;

Manually through user-generated documents that record transactions.

Any of the alternatives allow additional analytical attributes to break down receipts that ensure monitoring and reporting with relevant analytical breakdown as well as budget execution reporting.

Accounting of expenses with preliminary control and/or acceptance

The scheme for accounting of expenses with preliminary control and/or acceptance lies in handling of a single electronic payment document within the system, which combines budget and payment functions.

It should be noted that with the limit control procedure enabled, an urgent and high priority document with negative control result can still be manually transferred to another processing phase (accepted), with a grounding comment specified.

A result of expenditure can be recorded both automatically (through importing a bank statement into ECC) and manually by an operator.

Thus, the scheme enables:

a management company to:

— Obtain valid consolidated information on movements and balances throughout all subdivisions;

— Run preliminary control and accept expenses, prevent operations without approval of the management company;

— Obtain reports in real time on budget execution, funds movements, with appropriate breakdowns.

a subdivision to:

— Cut on time it takes to prepare documents through combining budget and payment functions within a single document;

— Simplify training of users in new functionality on an available workplace («Bank-Client») with patches;

— Monitor movements of own funds;

— Run preliminary control of own payments against a budget for cash flow movements.

Multi-segment control of limits

A control segment is a set of analytical and financial indicators that the corporation uses for planning and accounting of funds movements.

Individual rules and algorithms of passing payment document controls are set for each segment.

Co-ordinates of segments differ in analytical classifications only. Each control segment would always have: Responsibility centre, limit over a period.

Multi-segment control of limits can be applied to separately limiting against various analytical indicators and planning periods, for example, against budget classification codes — broken down by quarters, against projects — broken down by months.

The system supports the following settings for control segments:

• Set of limiting co-ordinates of a segment that are used for planning within the segment and for controlling the limits;
• Setup of non-limitness for each responsibility centre for each segment;
• Setup of the document control algorithm within a segment (permitted% of over-limit amount).

Passing of documents through individual segments is set within ECC through setting up an additional attribute.

With the multi-segment control passed, the document goes to the acceptance phase with its further processing being standard for the given expenditure scheme.

Currency transactions

ECC supports multi-currency recording of transactions as well as auto-alignment of data to a common accounting currency in order to consolidate full information on financial movements.

This feature ensures:

• Generation of currency documents within the system;
• Control of currency documents against limits and their preliminary approval and acceptance;
• Consolidated reporting on execution of a budget for cash flow movements, denominated in a single accounting currency;
• Analytical reporting on status and movements of currency funds both in original currency and accounting currency;
• Re-evaluation of currency funds balances at exchange rate changes;
• Valid information on ruble equivalent of currency funds balances.

Management of accounts of subdivisions, subsidiaries, and affiliates

This feature involves:

• Capability for the management company to generate payment documents against accounts of subdivisions, subsidiaries, and affiliates;
• Generation of rules and conditions for re-allocation of funds (in particular, daily transfer of funds from revenue accounts of subdivisions to the main account, replenishment of expense accounts, etc.);
• Auto-control of funds allocation in accordance with generated financial management rules (in particular, tracing of payment limits, permissible overdrafts, generation of payment position, etc.);
  Hands-on re-allocation of funds, including re-allocation between subdivisions, in accordance with set rules (in particular, replenishment of expense accounts at the expense of receipts from revenue accounts, etc.).