EuroFinance 2014 – Shared Services, Payment Factories,

POBO and COBO

Agenda

Company Overview

Treasury Organization

Shared Service Centers

Payment Factory

Payment on Behalf (POBO)

Collection on Behalf (COBO)

Questions

Revenues & People

Data based on year-end 2013

Agriculture

Demolition & Scrap

General Construction

Heavy Construction

Landscaping

Pipeline

Quarry & Aggregates

Waste

Construction Industries

Wheel Loaders small, medium

compact, small and medium

Track Excavators mini, small, medium and large

Multi-terrain Skid Steer Loader

Telehandlers

Track-type Tractors small and medium

Wheeled Excavator

Motor graders

Backhoe Loader

Pipelayers

Compact Track Loader

Select Work Tools

Surface Mining

Underground Mining

Paving

Forestry

Components

Electronics

Control Systems

Resource Industries

Industrial Power Systems

Large Power Systems

Electric Power

Marine & Petroleum

Solar Turbines

Progress Rail

Electro-Motive Diesel

Energy & Transportation

Peoria RTC

Three Regional Treasury Centers (RTC) : Collect & provide cash for Caterpillar entities acting as In-House Bank

Geneva RTC

Singapore

RTC

Regional Shared Service Centers

Panama

Belfast

Tianjin

Bangalore

EAME System %Trans

NA Systems % Trans

A/P SSC Challenge - Systems

LAPD Systems % Trans

APD Systems % Trans

1 SAP 41%

2 MFG/Pro 30%

3 MAXCIM 24%

4 DataSul 5%

5 Unknown 0%

6 Aspel COI 0%

7 BLIS / COI 0%

8 CAPS 0%

1 CAPS 94%

2 Unknown 3%

3 JD Edwards 1%

4 MFG/Pro 1%

5 MACPAC 1%

6

Mfg Facility - SAP R/3

(FG Wilson); Spares -

ACPAC 0%

7 Microsoft Dynamics GP 0%

8 SAP 0%

9 ACCPAC 0%

10 Adagio ,CAPS 0%

11 Mapics 0%

12 Navision 0%

1 SAP 37%

2 SAP(CBS) 36%

3 JD Edwards 19%

4 Unknown 8%

5 Kingdee 0%

6 UF System 0%

1 SF 60%

2 MFG/Pro 13%

3 SAP 5%

4 SAP-FI, EVE,Hansalog 4%

5 SF,Local GDS 4%

6 Glovia AP 3%

7 JD Edwards 2%

8 Chess 2%

9 PEGI 2%

10 Basware Scanning System 1%

11 Local Grimbergen system 1%

12 MS Excel Sheets 1%

13 Unknown 1%

14 Mapics 1%

15 1C 0%

16 EASYOPEN 0%

17 Topaccount 0%

18 SAGE 0%

19 Microsoft Dynamics GP 0%

20 External Bureau 0%

21 AS400 0%

22 ACG2-IBM 0%

23 Navision / Dynamics 0%

24 Tally 0%

*

*

*

*

SSC Benefits Challenges

• Standardization

– Common Processes

– Common Controls

• Economy of Scale

– technology

• Center of Expertise

• People career

• Turn over

• Entity resistance

Caterpillar Payment Factory Setup

Bank Statements / Payments

Treasury

Bank Statements / Payments

Payment

Factory

Payment Factory

Benefits Challenges

• ERP / Bank agnostic

• Standardization

Processes / Controls /

Approvals

• Visibility

Payments / Balances

• User Access control

• Security

• Contracts

• Technical

• Entity resistance

• Standards

In Country Funding Centers (ICFC)

EMEA RTC

ICFC

France

Company

A …

…

ICFC

CSARL

Company

C …

…

ICFC

Germany

Company

B …

…

In Country Funding Centers (ICFC)

Centralization of liquidity while providing daily availability

Entities and ICFC are linked with In-House accounts and zero balance sweeps

Shared Accounts – payment on behalf

ICFC Master Accounts • Owned by ICFC

• Managed by RTC

$

CHF

GBP

JPY NOK

SEK CAD

€ - CCS SARL (ZA)

€ - CFSAS – activity (SD)

€ - CHF SAS (KI)

€ - CLS SARL (J9)

€ - CLMLS SAS (L3)

€ - CLS SAS (PY)

€ - CMR SA (R9)

€ - CTF SARL (KY)

€ - CFSAS – salary (SD)

€ - CFSAS

Accounts in France

for all domestic activities in €

Accounts in Belgium

for all non € domestic and

non domestic activities

Shared Accounts owned by

ICFC and used by all

French Entities

(Payment on Behalf Of)

€*

Operational Accounts • Owned by each legal

entity for their activities

Master ZBA

account

€ - Euronov

€ - CC SARL

€ (new)

RTC Accounts $

CHF

GBP

JPY NOK

SEK CAD

€*

ZB

A Z

BA

Currency

ZBA accounts

ZB

A

€ - CTF (in FR)

Payment On Behalf Of (POBO)

Benefits

• Reduce bank accounts

• Reduce cash balances

• Reduce costs

• Automation

Challenges

• Volume reconciliation

• Rejects

Collection On Behalf Of (COBO or ROBO)

• Not Implemented yet

• Identification of beneficiary of funds

• Manual process

• Potential for Virtual Accounts?

Questions ?

Bina_Martin@cat.com