US companies are wasting $1 billion each year because their receivables and payment processing systems are siloed and overly complex. It’s a grim picture, and it’s not improving nearly as fast as it could be. In the burgeoning digital age, consumers have come to expect rapid, personalized experiences in every aspect of their lives, from ordering groceries online to paying their bills. Companies, wanting to delight their customers, have responded by adding disparate platforms and capabilities to their accounts receivables (A/R) systems: ACH, pay-by-phone, online payments, you name it.
It’s resulted in a lot of siloed systems that don’t work together, requiring your staff to jump through hoops to accept, post and reconcile payments. It’s a lot of manual work that, quite frankly, would be better left to computers—they’re better (and faster) at it, anyway.
Automating your receivables processes and moving to a single integrated receivables hub is a widely growing trend for many companies across numerous industries. Why not save some money and redeploy your people on things they’re good at, like solving complex problems and creating strategies that will further your business?
Straight through processing (payment acceptance, processing and posting in a single pass) helps you create consistency and efficiency in process rules and workflows, no matter which payment method – or payment channel – your customers use. Once you’re on one system, it shouldn’t matter whether the payment was in cash, check, ACH, credit card, or mobile payment. You’ve got one “go-to” platform and repository for streamlined oversight and management of all payments across your entire business. Not to mention that being on one platform also enhances your reporting and reconciliation, since you’re running all payments through a unified interface.
Consolidation will save costs, but it’ll do something much more valuable: it can transform your business. You can take the mountains of data you’ve always had and make it work for you. By analyzing it, you can identify process improvements and opportunities for profit, and quickly determine the success or failure of your marketing campaigns on the most granular level. You can fine-tune your entire business, experimenting and getting results fast. In other words, you’re changing AR from a cost center into a strategy engine that can give you real-time visibility into your receivables stream. Best of all, the data is free. You’ve always had it, but now you can tap into it.
Needless to say, we’re fans of the idea.
Streamlining your traditionally disparate receivables platforms can also give you the flexibility to work overseas, or to handle unpredictable surges in cash flow. The American Red Cross, once had more than 25 different banking relationships, each with different processes for check scanning and reconciliation — which they had to reconcile manually at the end of each month.
It was a headache they didn’t need, so they moved to straight through processing on one integrated receivables platform. As a result, they’ve consolidated those banking relationships down to less than 6—reducing complexity and processing and posting payments faster. Processing all checks across hundreds of field offices using a unified remote deposit capture (RDC) hub, Red Cross executive management can see what’s being processed and posted across their entire business in real time, and they can manage their system centrally. They’re saving time and costs, and using their resources to explore new ways to better serve those in need of their life saving services.
Another FTNI customer, a top-ten U.S. foodservice distributor, has also taken to thinking outside the traditional accounts receivable box. Identifying the strategic value of ridding its receivables operations of siloed processes and systems, the distributor has consolidated key areas of AR technology and processes on a single cloud-based receivables platform.
From a single integrated receivables hub, the distributor has implemented a self-service online payment portal complete with electronic invoice presentment and payment (EIPP), enhanced remote deposit capture (RDC) capabilities across multiple office locations, and a mobile payments app to over 300 field representatives. What’s more, since all receivables are running through a single platform, and that single platform is seamlessly integrated with its back office accounting system, the distributor is able to achieve straight through processing which has worked wonders in reducing the company’s days sales outstanding (DSO).
You can do it too. Thanks to the cloud, streamlining your receivables operations on a single platform has never been more achievable – or affordable. Over the next several posts in this series, we’ll continue to dive deeper to explore how to find a payments partner who can help, and we’ll talk about common concerns like security and timing.
Originally published June 29, 2015.