See How These 3 Companies Optimized Their Receivables


By: Kevin Kane, Managing Director, U.S. Head of Commercial Banking, Treasury & Payment Solutions

Until recently, most businesses took the “if it isn’t broke, don’t fix it” approach to their receivables. Most companies developed their receivables processes over time, separately for each payment  type. Take EFT, where a manual payment posting process may have been developed way back when you received five EFT payments per day. In many cases, that same process is still being used, only now you’re receiving 100 EFT payments a day.

This is all the more remarkable considering how important receivables are to your business. But companies always have more pressing priorities, and it can be difficult for some businesses to access the IT resources necessary to automate the process. Also, as payment methods evolved to include methods such as lockbox, EFT, wires and online payment, many companies found themselves with a disparate and often confusing set of receivables processes.

As a result, many companies have payment processes that are a complex web of inefficiencies, potentially exposing them to high days sales outstanding (DSO), high internal costs, and PCI and audit risk exposure. And it’s only getting worse. Many companies deal with:

  • Multiple ways to get paid, with multiple clearing methods for each.
  • A different workflow and different balance process for each method.
  • Different sources of remittance information for each method.

 

CASE STUDIES

The barriers to entry for high-powered remittance solutions have fallen tremendously. Even 10 years ago, you wouldn’t employ certain key remittance systems unless at least half of all your payments would come through that channel. Now it can make sense to deploy these systems even if only a small portion of your total payments will be received that way.

The following case studies illustrate how various high-powered remittance solutions have helped solve key inefficiencies:

Premier US petroleum marketer

THE KEY ISSUES

  1. Two separate lines of business with separate payment and cash app processes
  2. Limited online payment capabilities, leading to customer complaints and high merchant processing interchange fees for card transactions

THE RESPONSE

Single online payment solution for their customers, which supports both lines of business. Single sign-on integration to their own client portal for intuitive payer experience, and level 3 merchant integration for lower interchange fees.

THE RESULTS

Merchant processing fees were reduced by $29,000 per year. Customer experience improved, customer complaints decreased, and all DirectBiller payments process straight through for automated cash application.

Top producer of containerboard and corrugated packaging

THE KEY ISSUES

  1. Several divisions received mailed, EFT and wire payments
  2. Over 10 remittance reports were accessed daily, all EFT and wire remittance information from those reports were manually keyed
  3. Researching payments across divisions was nearly impossible

THE RESPONSE

Automated cash application of all payments through a single remittance file and eliminated all manual keying of EFT and Wire payments.

THE RESULTS

The receivables team now has visibility to all payment types for all divisions – through a single viewer – for quick and intuitive research across divisions.

Provider of equipment and solutions for senior living facilities

THE KEY ISSUES

  1. A high volume of in-office payments and called-in payments required duplicate manual processes (process the payment, then post the payment), causing excess PCI exposure
  2. The receivables team had to key in every EFT and wire payment

THE RESPONSE

A comprehensive receivables solution with EFT, wire and electronic check scanning that deposits directly to their lockbox. In addition, an online payment solution for their customers, as well as implemented Online Decisioning across all payment types, allowing them to review the payment exceptions that we cannot resolve for them.

THE RESULTS

Nearly 100 percent automated cash application. Manual in-office processes have been reduced significantly, while PCI exposure has been mitigated.

 

A STRATEGIC APPROACH

Every company has different needs, which is why each of these businesses completed a thorough analysis of their receivables processes to develop the solution tailored to their requirements.

BMO_OptimizingReceivables_3.31.18

 

Download PDF - 447 KB

BMO_OptimizingReceivables_3.31.18

Download PDF - 447 KB


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