DKSH builds future-ready treasury with API and QR code innovations

Founded in 1860, Swiss-headquartered DiethelmKellerSiberHegner (DKSH) is one of the largest market expansion services providers. DKSH operates in 37 markets through a comprehensive network of business locations across Asia Pacific, Europe, and North America.

DKSH Thailand currently serves over 550 multinational and local companies through four specialised business units including Consumer Goods, Healthcare, Performance Materials, and Technology.

The challenge

While business grew over the years, DKSH’s treasury structure in Thailand had remained highly manual and the company was looking to address the following challenges:

Manual payments reconciliation. DKSH maintained relationships with five collection banks for their receivables capabilities, leading to significant manual effort spent on account maintenance. Due to the ‘payer field’ being optional in bank transfer transactions, DKSH often encounter difficulties in reconciling payments, hindering their ability to identify the paying customer.

Complex collections process. The bulk of payments made to DKSH from customers were in the form of traditional cheques, cash, bank transfers, and credit cards. Cash collection specifically required salespersons to collect manually, giving rise to risk of fraud.

Sub-optimal liquidity management. DKSH operated 16 entities in Thailand, but without a sophisticated liquidity structure in place, DKSH faced challenges in cash visibility and efficient management of its cash operations.

DKSH sought to modernise its treasury approach by accepting new digital payment methods into M-Collector – a collection device carried by DKSH salespeople when collecting funds from B2B merchants – while streamlining its overall liquidity structure to increase operational efficiencies.

The transformation

Partnering with HSBC, DKSH implemented the following digital banking solutions to overhaul its archaic infrastructure and build a future-ready treasury.

Digitalising collections via Dynamic QR and Credit Notification API

Integrating the Dynamic QR code solution into the M-Collector device, DKSH provided customers with an additional digital payment option that enabled them to scan a QR code to make real-time fund transfers from their banks.

Coupling this with the Credit Notification API, DKSH was able to receive real-time notification of each payment with payer details and other transaction information embedded in the QR code. The real-time notification will also be sent to DKSH’s account receivable system once payment is received to automate reconciliation. This solution enabled DKSH to consolidate its collections with a single bank through HSBC, easing reconciliation efforts.

Enhancing liquidity through centralisation

To optimise liquidity across multiple entities, a domestic cash concentration structure was set-up with target zero-balance and two-way sweeps mechanisms for 3 entities as part of the first phase. Moving forward, other entities will be gradually integrated in subsequent phases.

The zero-balance sweeps enabled full centralisation of excess cash across participating entities to the master account under DKSH Thailand, while the two-way sweep structure allowed funds to move between master and subsidiary accounts, thereby optimising internal funding.

The Results

DKSH Thailand is a winner of The Asset Triple A Treasurise Awards 2024 in the Best Payments and Collections Solution category for Conglomerates in Thailand.