The Euro on the Move
Two types of company took part in these seminars : SMEs and large corporations. Three clear switchover profiles were highlighted during the first seminars:
- Companies who have already defined a switchover strategy to be in place by the end of 2001.
- Companies intending to switchover on January 1, 2002
- Companies with no fixed switchover date.
"Since March 2001, the bank switchover process has been given real impetus, with certain banks opting for gradual switchover and others for the "big bang". Companies have set a switchover date or period based principally on the quarter: April, July, October or December 31, 2001," explains Jean Beaufort, XRT General Manager for Southern Europe, the Middle East and Africa.
The main switchover periods are fixed for the start of the quarter. These dates are particularly useful for treasurers as they correspond to the close of a quarterly period. Companies are keen to be able to close the quarter in francs and open the next in euros.
Seminars were used to remind companies that XRT solutions can manage mixed periods (the interest period report for a single account can be issued in francs and euros) and gradual switchover strategies for all portfolios (cash, foreign exchange, rates, financing/investments, reconciliation, etc.).
Jean Beaufort, XRT General Manager for Southern Europe, the Middle East and Africa, highlights the key points arising from the eight seminars:
Convert Cash Flow to Euros as Soon as Possible
The Euro-opportunities seminars provided an opportunity to stress the link between accounting and cash flow. The majority of treasurers see themselves as bound by the accounting system and firmly believe they will be unable to convert cash flow before the accounting system. Up until now, some professionals were sure that it was impossible to reconcile account entries in francs and bank entries in euros. However, a number of decision-makers now plan to use XRT reconciliation functionalities to convert their cash flow into euros before the accounting switchover.
Improve the Bank Account Switchover Management
Seminar participants were convinced that all accounts would be converted simultaneously on a given day. This would have been an arduous task for treasurers with several banking partners.
The Euro-opportunities seminars showed that conversion practices were not the same for all banks and that it would be preferable to spread the switchover load. With the great flexibility offered by XRT solutions, a staggered switchover is no longer a problem.
Secure the Project and Implement a Test Platform
XRT and BNP-Paribas representatives also insisted on the need for a "euro-sensitivity" audit of the information system along with implementation of a test platform. A simple series of unit tests will not be sufficient, however. Guaranteeing the success of the project will involve real simulations for the entire financial flow chain, including risk assessment, financial hedging, cash management, accounting and reporting.
Comments and Reactions from those Attending the Seminars
Participants found that the seminar topics met their needs. They appreciated the quality of the presentations and the flexibility of the question-and-answer sessions in both workshops and conferences. This succeeded in raising awareness: the euro switchover does not mean simply dividing by 6.55957, but offers added value for companies (euro cash-pooling, reporting, changes to international billing in euros). Participants were thus able to see the merits of the various XRT solutions in helping them manage the euro switchover.