Providing Working Capital Solutions for the Food and Beverage Industry

The last several years have been challenging for the food and beverage industry, as companies have managed through a global pandemic, worker shortage, supply chain snarls, soaring inflation and unpredictable weather. As a result, while implementing strategic plans and growth initiatives, companies are under pressure to do more with less in nearly every part of their business — and that includes treasury management. 

Food and Beverage (F&B) companies have complex cash flow needs. Income and expenses can vary significantly by season, and there are often long gaps between expenditures and revenue realization. In addition, fluctuations in commodity costs can create unexpected hiccups, and labor expenses continue to rise. Companies must have an accurate, real-time view of their receivables and payments to thrive in this fast-changing environment. Companies also need access to flexible financing solutions for their evolving needs and to be able to easily track key indicators like liquidity, cash flow, operating efficiency and available inventory.

In today’s environment, open banking systems can simplify day-to-day operations and automate payments, receivables and balance information while providing a rich source of data on every aspect of a company’s financials. Here’s how City National helped one company meet short-term funding needs and take more control of their financials and cash flow.

From Crisis to Growth, with Our Food & Beverage Clients

At City National, our Food & Beverage group has the financial expertise to understand the industry’s opportunities, challenges and trends to help our clients manage ever-changing growth. During the COVID-19 pandemic, we had the opportunity to assist a client through the crisis. Their initial goal was to avoid layoffs and ensure their valued employees were paid on time, despite the hardships at their door. Therefore, we helped our client secure the necessary funding that allowed the company to continue operations and keep its employees. After helping the company with financing, our working capital advisory team began a discovery process to assess the company’s treasury systems and processes. The client used an accounting software for many years that did not connect directly with vendors, customers and other key constituents. As a result, the finance team had to rely on error-prone and inefficient manual data entry to keep financials up to date. The company was ready for a change that would allow it to scale and provide additional insights into its financials and cash flow.

Helping Businesses Scale with Integration Solutions

Banking Application Programming Interfaces (APIs), like City National’s EASI Link® , work by providing a secure connection from a client’s accounting or enterprise resource planning (ERP) system to their bank.¹ These solutions allow them to simplify day-to-day operations and automate receivables, payments and bank reconciliation while providing a rich source of data on every aspect of a company’s financials. In addition, this allows clients to view historical data, analyze trends and create detailed forecasts.

City National Bank works closely with clients to evaluate integration solutions that meet their needs. With our EASI Link solutions, clients benefit from:

• Convenience and automation: Processing speeds increase and errors decline as the EASI Link system replaces time-consuming manual data input processes. Because EASI Link is an extension of existing accounting systems, businesses can adapt quickly without learning a new system.
• Improved accuracy and security: EASI Link creates better risk controls, approval workflows and audit trails for payment processing, reconciliation and cash management.
• Ease of implementation: For EASI Link Connector solutions, which are plug-and-play, installation happens quickly, without significant company resources required for the integration.

For companies with more complex needs, we work with them to develop a curated set of transactional APIs and custom integration to the company’s accounting or ERP system.

Overall, integration solutions offer companies process efficiencies, better reporting and insights, and improved working capital and risk management. Time and money saved can reduce the burden on your finance team, while providing more customized reporting options and granular, nuanced information on payment trends.

The Outcome: Immediate Improvements in Working Capital and Process Efficiencies

When advising our Food & Beverage client on potential integration solutions, ease of implementation and the ability to recognize improvements quickly were important factors, driving us to the decision to implement an EASI Link Connector solution. This solution offered the company a plug-and-play experience and fast onboarding, while providing many long-term benefits related to the company’s working capital management, including:

• Information reporting: Automatic bank feed of account data to their ERP system replaced the previous process, which included manual entries and uploads of bank data to the ERP. This change provided improved data accuracy and timeliness.
• Payables management: The client now sends payment files directly from their ERP to City National, integrating ACH, wires and check printing. This streamlined, automated process resulted in better controls and management of DPO (Days Payable Outstanding). The company gained additional efficiencies by outsourcing check printing and distribution of checks paid, reducing hours spent on this task from four to six hours to one to two hours.

City National Bank’s EASI Link provides you with the solutions you need to achieve your strategic financial goals. You’ll gain more control over cash flows and enable seamless, accurate processing of the financial transactions that drive your company’s success and help to scale your business operations more efficiently.

For more information, contact your City National relationship manager or get in touch at cnb.com/foodandbev.