Lufthansa accelerates payment quality

Solutions Payments Treasury Management
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Industry
Transportation

Revenue
$21.4 Billion

Employees
10,000+

Headquarters
Frankfurt, Germany

The project has been an exceptional example of a highly effective partnership between Lufthansa, Serrala and our banks, which has delivered significant value to the business within an ambitious timescale. We have also received excellent internal support, both from our information management team that manages our SAP infrastructure, and from our senior management, which has enabled us to overcome organisational obstacles and co- ordinate internal stakeholders.

Carlos Scheeren,
Project Head, Payment Factory, Deutsche Lufthansa AG

Lufthansa Group is Germany’s flag carrier. With its subsidiaries, it’s the second largest airline in Europe for passengers carried and the fourth largest airline in the world by revenue. 

Key facts: 

  • 540 entities worlwide 
  • 1500 bank accounts 
  • Multiple electronic banking systems used for payment approval and execution 

Lufthansa’s payment challenges 

The Group faced significant challenges with payments. Handling most of them via the electronic protocols of its various banks, the company was manually executing approvals and workflows across hundreds of accounts with over 100 banks in 107 different countries for each of its 540 group entities. 

Given the different levels of functionality, diversity of formats and varying opportunities for process automation, this created fragmented processes for retrieving bank statements, approving and executing payments, and user administration. It also resulted in a similar patchwork of internal processes across multiple ERPs, SAP instances, and other diverse internal systems. 

Lufthansa’s transformation approach 

Lufthansa knew the smart solution was to standardize processes by creating a global “payment factory” for managing all inbound invoices. As part of this process, they would also streamline its banking infrastructure to focus on a few main partners for all cash management activities and simplify and rationalize documentation and record keeping at the same time. 

They chose Serrala as their partner for this project because of our solutions’ flexibility, or expertise across financial automation (and dedicated project team structure for implementation), and our rule-based approach to automating the conversion of incoming file formats to ISO 20022 compliant XML files.

The result – automated, controlled, consistent processes 

Lufthansa has been able to connect its affiliated companies and subsidiaries to its new payment factory and harmonize processes across over 75% of all outgoing vendor payments. As part of the process of achieving this goal, the company has also radically simplified its banking landscape – making the process of auditing bank fees and performance easier and allowing them to monitor and reconcile these fees at the account level in real time. 

Business Need

Lufthansa Group is Germany’s flag carrier. With its subsidiaries, it’s the second largest airline in Europe for passengers carried and the fourth largest airline in the world by revenue. 

Key facts: 

  • 540 entities worlwide 
  • 1500 bank accounts 
  • Multiple electronic banking systems used for payment approval and execution 

Lufthansa’s payment challenges 

The Group faced significant challenges with payments. Handling most of them via the electronic protocols of its various banks, the company was manually executing approvals and workflows across hundreds of accounts with over 100 banks in 107 different countries for each of its 540 group entities. 

Given the different levels of functionality, diversity of formats and varying opportunities for process automation, this created fragmented processes for retrieving bank statements, approving and executing payments, and user administration. It also resulted in a similar patchwork of internal processes across multiple ERPs, SAP instances, and other diverse internal systems. 

Solution Implemented

Lufthansa’s transformation approach 

Lufthansa knew the smart solution was to standardize processes by creating a global “payment factory” for managing all inbound invoices. As part of this process, they would also streamline its banking infrastructure to focus on a few main partners for all cash management activities and simplify and rationalize documentation and record keeping at the same time. 

They chose Serrala as their partner for this project because of our solutions’ flexibility, or expertise across financial automation (and dedicated project team structure for implementation), and our rule-based approach to automating the conversion of incoming file formats to ISO 20022 compliant XML files.

Results Achieved

The result – automated, controlled, consistent processes 

Lufthansa has been able to connect its affiliated companies and subsidiaries to its new payment factory and harmonize processes across over 75% of all outgoing vendor payments. As part of the process of achieving this goal, the company has also radically simplified its banking landscape – making the process of auditing bank fees and performance easier and allowing them to monitor and reconcile these fees at the account level in real time. 

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