Grocery Distributor

Grocery Distributor Cuts Cash Management Fees by 35% With Redbridge

Overview

Optimize the efficiency of fees associated with cash management from five banks and streamline the utilization of their services.

Objectives

• Help client obtain complete visibility on volumes and fees for every banking relationship
• Review current market practices and innovative service offerings
• Design and implement a fee optimization strategy with banks that maintains strong relationship while providing a cost reduction
• Attain competitive yield rates amid the present upward trend in interest rates with respect to their investable balances

Results

• Conducted bilateral negotiations with the banks leading to an annual fee savings of 35%
• Harmonized bank fees across accounts
• Realized a total savings in the seven-figure range, encompassing reductions in bank fees, improvements in earnings credit rate, and the elimination of unused services
• Successfully negotiated Hybrid ECR/Hard Interest and an indexed rate against the Fed Funds Rate with three banks

Methodology

• Performed an in-depth analysis of fees incurred over the past 12 months, involving mapping of bank services, alignment of AFP codes, and a comprehensive review of the current volume and pricing structures across all banking partners
• Detailed benchmark of all service prices and rates (including ECR)
• Full support provided to the client’s treasury team during the decision-making process and negotiations with banks

Value Added by Redbridge

• Facilitated the gathering of data from the banks, ensuring both prompt delivery and complete accuracy
• Provided full overview of cash management cost breakdown by bank.
• Provided in-depth knowledge of market prices and best practices across services and banks
• Supported the client during negotiations with banks to safeguard long-term relationships