Estée Lauder transforms treasury operations with Serrala
Streamlining Payments, Netting, and Cash Management for 175+ Entities in 25 Currencies.
Business need
Business need
A Global Leader in Beauty – A Treasury Vision for the Future Founded in 1946, Estée Lauder Companies is a $14.3 billion global leader in prestige beauty. With a portfolio of 25+ brands, the company reaches 500 million+ consumers across 150+ countries.
With corporate treasury operations run from two separate treasury centers based in the U.S. and Belgium, Estée Lauder required a unified, automated, and efficient solution to streamline intercompany settlements, payments, and cash management while improving global liquidity visibility.
To execute this large-scale treasury transformation, Estée Lauder partnered with Serrala, leveraging their deep expertise in SAP Treasury, in-house banking, and global cash management to design and implement a fully integrated, automated solution.
Key Challenges Prior to Bank Rationalization & Treasury Transformation Initiatives:
- Fragmented treasury tools & manual processes created major inefficiencies
- Banking complexity: Over 35+ different banking relationships in EMEA
- $650M in monthly settlements depended on costly external banking services
- Lack of real-time cash visibility: 550+ accounts required better oversight
Solution implemented
Solution implemented
SAP IHB/IHC: A Fully Integrated Treasury Hub
Estée Lauder implemented SAP In-House Banking (IHB/IHC) to streamline intercompany settlements, centralize treasury operations, and eliminate reliance on costly external banking services. By consolidating 175+ subsidiaries into a unified global in-house banking model, the company gained full control over intercompany payments, cash positioning, and liquidity management.
The in-house bank was strategically structured with three banking centers—two in the U.S. and one in Belgium—to optimize cash consolidation across regions while maintaining regulatory compliance. This setup allows for efficient liquidity management, minimization of tax implications, and centralized treasury reporting without disrupting local financial operations.
- A fully integrated, automated IHB solution consolidating treasury operations globally
- Centralized intercompany settlements, cash management, and liquidity positioning
- Three IHB centers (U.S. & Europe) structured for optimal tax and liquidity management
- Improved treasury visibility, reporting, and control across 175+ subsidiaries in 40 different countries
Optimizing Global Payments – Faster, Cheaper, Smarter
Estée Lauder implemented Payments-on-Behalf-of (PoBo) through its SAP In-House Bank, eliminating the need for subsidiaries to maintain separate bank accounts while optimizing payment execution across multiple currencies.
Payments are automatically routed through the most cost-effective method, reducing FX conversion costs and transaction fees while ensuring compliance with local banking regulations.
By integrating a single SWIFT gateway through SWIFT, Estée Lauder eliminated host-to-host bank connections, simplifying maintenance and reducing reliance on multiple banking portals.
Straight-through processing (STP) enables fully automated vendor and treasury payments with minimal human intervention, improving processing speed, visibility, and security.
- PoBo centralizes payments, eliminates subsidiary bank accounts & reduces costs
- Automated routing optimizes transaction fees & ensures local compliance
- Single SWIFT gateway enables seamless payment execution and reconciliation
- STP automation drives real-time, touch-free, vendor & treasury payments globally
- Eliminated reliance on bank portals, improving security & efficiency
Streamlining Intercompany Settlements & FX Hedge Processing
Estée Lauder automated multilateral, multi-currency intercompany settlements through SAP In-House Banking (IHB), eliminating reliance on an external bank. The new model enables end-to-end straight-through processing (STP) from AP invoice to AR clearing with minimal human intervention, while also integrating FX hedge settlements for seamless execution.
Centralizing Cash & Liquidity Across the Enterprise
Estée Lauder optimized global cash pooling across 25 currencies and 163 participants, leveraging automated zero-balance (ZBA) and target-balance (TBA) structures to improve efficiency and cash positioning.
Historically, cross-company cash pooling required manual tracking, high administrative effort, and carried a high risk of errors, making real-time treasury management difficult.
With the SAP In-House Bank, cash movements are now automatically captured via electronic bank statements and posted directly into virtual accounts, eliminating manual intervention. This seamless integration increases visibility, centralization, and liquidity control, allowing for internal lending between legal entities—reducing reliance on external borrowing and lowering overall financing costs.
- Automated ZBA & TBA structures optimize cash pooling across 25 currencies
- 163 cash pooling participants enhance global liquidity centralization
- Cross-company pooling fully automated, eliminating manual tracking & errors
- Direct EBS integration posts transactions to virtual accounts in real time
- Internal IHB funding lowers borrowing costs & enhances liquidity management
Results achieved
Results achieved
- Faster, more efficient, and cost-effective treasury ecosystem.
- Cost-efficient, scalable, and highly automated payment model that enhances global cash control
- 200,000+ monthly invoices settled via automated book transfers across 90 entities
- Automated multi-currency intercompany netting with STP from AP to AR clearing
- Intercompany FX hedge settlements integrated for seamless execution & visibility
- Cashless settlement via virtual accounts streamlines processes & reduces fees
- Shift from external bank netting to in-house model increased control & efficiency
- Estée Lauder moved intercompany netting in-house, gaining real-time visibility, greater control, and lower costs while improving efficiency and financial oversight.