Key takeaways
- Domino's Pizza faced challenges managing cash flow across its network of 20,500+ stores in 90 markets as of December 31, 2023, compounded by its complex structure and reliance on franchises¹
- Cash Flow Intelligence, part of the J.P. Morgan Treasury Insights suite of solutions that are powered by AI, automated data handling, providing real-time insights. Adoption led to a reduction in manual work, and improved visibility and precise cash flow projections
- With enhanced visibility, efficiency and accuracy, Domino's is poised to capitalize on growth opportunities and drive sustainable value for its stakeholders
About
In the dynamic landscape of the global restaurant industry, Domino's Pizza, Inc. (Domino’s) reigns as an undisputed leader.2 However, managing cash flow across this expansive network posed formidable challenges due to Domino's intricate securitized debt structure. The quick-service restaurant sector's fast-paced nature, coupled with its multifaceted revenue streams, including royalties, advertising, supply chain and company-owned store operations, often presents cash flow management as a daunting challenge.
The challenge
For Domino's, the complexities were magnified by its global footprint and franchisee-centric model, leading to obstacles in accurately forecasting cash flow for diverse reporting needs. Manual processes were laborious, slowing down the company's ability to make capital deployment decisions and impacting its financial agility. Struggling to gain comprehensive visibility into its cash flows, Domino's faced the risk of reliance on broad forecasts and averages, rather than finely tuned point estimates. This made it difficult for them to optimize cash flow utilization, as manual data entry and categorization processes consumed valuable time, leaving less room for strategic analysis.
The solution
To overcome these obstacles, Domino's turned to Cash Flow Intelligence, a solution within our Treasury Insights suite of products, designed to revolutionize cash flow reporting. Powered by AI-driven analytics, Cash Flow Intelligence offered Domino's a sophisticated toolset for cash forecasting and analysis. By automating data aggregation, categorization and reconciliation, the platform provides Domino's treasury team with real-time insights and actionable intelligence.
- Efficiency unlocked: According to Domino’s Treasury Team Leader, Nancy Romain, the team’s weekly manual data cleanup efforts were reduced by up to 90%. This reduction helped free up team members to focus on higher value adding, creative tasks and producing better forecasts
- Enhanced visibility: Daily cash "health checks" provided Domino's with unparalleled visibility into its cash flows, empowering proactive decision-making
- Future anticipation: Cash Flow Intelligence enabled Domino's to incorporate those projections into its existing model to supplement the analysis with greater precision, facilitating informed financial planning and risk management
“Cash Flow Intelligence allows us to organize the information in a way that suits our needs versus reviewing a canned report from a bank that you have to export and then sort and redefine to kind of fit what you need. There’s no need to do any retrofitting because the tool allows us to design it in a way that's meaningful for us.”
Ian MacDougall
Associate Treasury Analyst at Domino’s Pizza
The results
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Reduction of manual data cleanup of up to 90%: This reduction freed up team members to focus on higher value-adding, creative tasks and produce better forecasts
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Centralized workspace: Domino's established a centralized platform for conducting weekly cash flow reviews and forecasting updates, enhancing operational efficiency
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Detailed categorization: The implementation of transaction categories facilitated in-depth analysis and trend identification, allowing Domino’s to extract valuable insights to make informed decisions regarding resource allocation, investment priorities and operational improvements
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Accurate projections: Cash flow forecasts closely aligned with the annual budget for 2024, corroborating the accuracy and reasonableness of the tool, thereby providing invaluable insights for strategic planning and resource allocation
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Minimized human error: Cash Flow Intelligence significantly reduced manual input and improved reporting accuracy, mitigating the risk of errors and enhancing confidence in financial data
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Efficient AP pay-cycle reconciliation: Seamless reconciliation of transactions across multiple accounts streamlined payment processes, helping ensure consistency and reliability
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Foreign entity balance analysis: Domino's gained actionable insights into foreign entity bank accounts, facilitating informed decision-making with respect to international cash management
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Collaboration and communication: Proactive and responsive support from J.P. Morgan Payments ensured a smooth implementation process, with features tailored to Domino's unique requirements
Domino's transformation with Cash Flow Intelligence has been profound. From manual assumptions to data-driven insights, they've gained clarity, efficiency and agility in cash management. Domino's has unlocked new avenues for evaluation of capital deployment decisions by optimizing processes and embracing technology.
“Beyond the efficiencies, our team is constantly evaluating the best use of cash for the company and our shareholders, and Cash Flow Intelligence is a helpful, data-driven tool that we have incorporated into our weekly process for forecasting free cash flow, as well as understanding variances where our actuals came in different from our forecast. We look forward to continuing to enhance our use of this product.”
Jessica Parrish
Vice President, Chief Accounting Officer and Treasurer at Domino’s Pizza
Learn more about Analytics and Insights Solutions from J.P. Morgan Payments here.
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