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Integrated Receivables: The ‘Next Frontier’ in Treasury Management Services

Tuesday, July 10, 2018 (RemoteDepositCapture.com / Patti Murphy)

The ‘next frontier’ for corporate treasury management is automating and integrating receivables management. Successfully meeting this new terrain requires customer propositions and business cases.
The proliferation of electronic payments has been a blessing and a curse for corporate billers. While treasury managers are keen on the speed and convenience of electronic payments, the price of admission has been maintaining multiple systems to support siloed payment acceptance and application processes. Integrated receivables solutions are a faster, cheaper, more intelligent way to overcome complexity and address critical pain points.
 
“The main focus within corporations for the last five years has been on automating accounts payables. There hasn’t been as much focus on the receivables side,” explained Sam Golbach, Senior Vice President of Solution Management at Deluxe Treasury Management Solutions.
 
Research from Aite Group drives home the point. Sixty-seven percent of companies surveyed by the consultancy last fall operate multiple enterprise resource planning (ERP) systems, and 34% said they rely on Excel spreadsheets to consolidate receivables information and manage cash.
 
“Automating and integrating receivables management is the next frontier for innovation,” said Dave Robertson, Managing Director, Deluxe Treasury Advisory Services. “Companies are realizing that A/R is an area in need of attention. They need more intelligence, better efficiency and speed, and they’re looking to improve customer service and cash forecasting.”
 
Integrated receivables technologies support the consolidation of various types of payments and remittance details from multiple sources, along with automatic reconciliation of that information with corporate accounting or ERP systems. It also takes in information in multiple media and formats and automatically identifies, normalizes and links critical information, thus accelerating and improving the financial supply chain. 
 
End users gain an integrated view of all payments and data that is normalized across channels. They can also extract images and data, resolve exceptions and generate outputs for posting, clearing, and other exception routines. All this from one centralized dashboard and underlying dataset.
 
The benefits to corporations are manifold, and include:
  • greater efficiencies through the automation of data gathering and consolidation activities, reductions in cash application errors and accelerated resolution of exceptions and disputes;
  • improved revenue opportunities from reductions in unauthorized discounts and improved collection activities;
  • improved customer satisfaction via rapid application of cash, reduced billing/application errors, and speedier resolution of customer issues via a single, integrated data archive;
  • reduced congestion of credit lines – freeing up revenue generating capacity through expedited cash application; and
  • enhanced risk management through faster identification of at-risk receivables and more intelligent monitoring of client credit risk.
 
Artificial Intelligence and APIs Improve AR, Outpace Legacy Technology
The emergence of sophisticated integrated receivables solutions has been propelled by technological advances in artificial intelligence and application programming interfaces (APIs). “Technology has gotten so much more sophisticated. With artificial intelligence you can easily make sense of disparate information sets and provide critical, contextualized intelligence to key business decisions,” Robertson explained. “These sophisticated tools are more accessible and easier to use than ever before.”
 
Artificial Intelligence applications enable a company to automatically lift critical information from PDFs, scanned remittances, ACH remittances and other sources, reconcile the underlying payments to open orders, and resolve or suggest actions for short-pays and other exceptions.
 
APIs are allowing providers to architect their platforms to integrate deeply and effectively into customer and third party environments. For example, using APIs, Deluxe’s business mobile Remote Deposit Capture (RDC) solution can be set up to integrate directly into a company’s A/R system, explained Golbach. “We can achieve integration right from the mobile device. Corporations with field-based sales reps can capture checks, documents, and virtual or electronic information and immediately match those to open orders and accounts. This is a natural evolution of RDC that eliminates the cost, delays, and potential errors of back office re-association and application,” Robertson said.
 
For Deluxe, it’s about integration across all solutions. The financial technology company is focused on developing solutions to integrate and augment a financial institution’s existing technologies. “We’re leveraging tools we developed for our state-of-the-art RDC and lockbox solutions to support integration across payment channels,” said Golbach, who manages Deluxe’s integrated receivables solution set. “Integration is achievable without any demonstrable changes,” he said.  “Companies can leave their technology platforms and data structures in place, and avoid significant capital costs or risks tied to remediating legacy technology platforms. Integrated receivables capabilities can also replace outdated applications without a complete overhaul, thus reducing technology risks.”
 
Corporate demand for integrated receivables solutions is strong. Among those companies surveyed by Aite last fall, 53% said an FI’s ability to offer an integrated receivables solution is an important factor in selecting a new FI partner; 20% said it was extremely important.
 
But a cookie-cutter approach to addressing this demand will not suffice. “Adoption of integrated receivables requires a customer-centric proposition and business case – and a feasible change management journey,” explained Robertson. A long-time consultant to FI treasury management shops, Robertson recently joined Deluxe from Novantas (formerly Treasury Strategies) where he led the Commercial Banking Practice. The Treasury Advisory Service unit he leads was spearheaded by Deluxe to help client financial institutions develop strategies and best practices for selling integrated receivables and other treasury management services to corporate clients.
 
Deluxe’s newest line-up of sales tools offers deep dives into industry verticals with insights into order-to-cash pain points and needs. It also features diagnostics that help qualify and quantify improvement opportunities for prospects, rosters of common obstacles to adoption and mitigating responses, and proposal templates.
 
“The demand for supportive advisory services is exploding as banks realize that products are now the building blocks of solutions, and more and more of the value is created through the advisory sales process. To attract and retain corporate clients with an integrated receivables solution, treasury management sales teams need to understand which clients are the best prospects and why, and that’s not always an easy task,” Robertson said.
 
“We believe the power and flexibility of integrated receivables is meaningless unless a financial institution’s sales teams are able to uncover each client’s needs. Without a configured solution offering that effectively integrates into each client’s unique processes, data and governance, and a manageable change journey, the full benefits of integrated receivables will never be realized,” said Golbach.
 
“Armed with this knowledge, along with Deluxe’s go-to-market capabilities, financial institutions can accelerate time to revenue without sacrificing existing revenue streams,” added Robertson. “We want to ensure financial institutions are getting the most out of this substantial investment.”
 
Upcoming Webinar to Feature Research, Opportunities
Robertson will be a featured presenter for free webinar on July 31, Mastering Integrated Receivables: The Climb to Best in Class. He will be joined by Aite Group’s Senior Research Director Christine Barry, John Leekley, Founder and CEO of RemoteDepositCapture.com, and Beth Bourgoin, Product Manager for Deluxe’s Receivables360 solution. The webinar will offer research-backed guidance and considerations for scalable solutions that can attract high-value clients. Deluxe is sponsoring the webinar, which is being presented by RemoteDepositCapture.com. Click here now to learn more and to register.

 
 


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