In the beginning of my career in treasury, I went to work for a large public company with no entity management system. When I started, I had no idea what questions to ask or where to begin. Initially, I was not aware that I needed to know the company’s entire profile, including:  

• The number of subsidiaries 

• The operating countries 

• The functional currency of each entity 

• Who the officers, directors, and key personnel were for each entity  

• Each entity’s bank accounts 

• The various account currencies, and signatories of each bank account 

• The systems in place used by the company and the individual subsidiaries 

• The processes of how money moved between entities and accounts 

I had to learn, over the course of several years in corporate treasury, what questions to ask of whom to do my job. 

After thirteen years of treasury experience, I went to work for another large public company, again with no entity management system. This time, I knew many of the questions to ask in the various departments of tax, finance, and legal, including the obvious items like bank accounts and signers, source and usage of FX accounting rates, corporate card programs and cardholders, bank guarantees and letters of credit, renewals, and expiration dates. I even knew to ask about the less obvious things, like merchant processors, pricing agreements, settlement currencies and accounts, intercompany agreements, entity capitalization, and previous year FBAR filings. I learned how to put the pieces of the company together to form the mosaic of information I needed. 

At this role, it took six months of meetings with various personnel across the company to collect the all the information I needed to accurately move cash around the entities of the organization and manage the subset of entity data that I was responsible for. I was lucky if any of the information was tracked in a spreadsheet and not just memorized by key personnel.

I couldn’t find a treasury management system that tracked the level of detail I really needed for all the data I encountered, so I did it myself. I started to standardize the process of tracking the information. It made my job significantly easier moving forward and it created a common language and understanding for the entire company and my key business partners including tax, legal, controllership, internal audit, and FP&A. 

After 22 years in corporate treasury at complex organizations including Microsoft, Itron, Tableau, and Salesforce, I know how much value there would be in a connected, continuous, and collaborative platform for managing legal entity data across an organization.

— Ed Barrie, Chief Product Officer, Treasury4 

How Legal Entity Management Lowers Risk 

The importance of legal entity management cannot be overstated, especially in lowering risk by ensuring compliance with regulatory requirements. According to Thomson Reuters’ “Cost of Compliance 2020” report, corporations reported their top compliance challenge as changes in regulations — a challenge that persists to this day.

For example, The Corporate Transparency Act poses difficulty to millions of companies that will be required to file reports on beneficial ownership to FinCEN. With the ever-growing complexities of various legal requirements and the change in personnel internally and with external business partners, a single source of truth for entity information is becoming increasingly necessary. 

A corporation’s entity management platform is the record of the corporation’s genome. Every organization has a genome, and each is unique based on the organization’s data. Having a single source of truth for legal entity data brings together everyone inside of an organization — including owners, contributors, and consumers of legal entity data and key adjacency data. This includes counterparties, financial accounts, partners, staff (officers, directors, account signatories) and all supporting documentation.  

How Legal Entity Management Improves Client Onboarding and KYC 

Having legal entity data and documents in a centralized platform helps remove friction from client onboarding and KYC with banking partners. The amount of information necessary to manage a company’s entire set of entities — along with each entity’s financial accounts, cash movements, drivers of FX exposures, and key personnel — is hefty and complex.  

When someone new joins a treasury department, they’ll need to be brought up to speed on the company’s profile, connect them with controllership, FP&A, legal, tax, real estate and facilities, etc. to access the information they need. Having a legal entity management solution can make the process far faster and easier. 

To learn more about how a legal entity management solution like Entity4 can help your business, contact us for a personalized demo.