Project Description

Man sitting at a desk in an office reviewing reporting on a computer with double monitorsAs new methods proliferate and more payments go digital, many B2B and B2C companies still struggle to attain timely, accurate, and cost-effective posting in accounts receivable (AR). The typical company takes up to six days to post a payment,1 leaving AR staff bogged down with manual data entry and exception management rather than value-added activities.

Even when companies do receive payments electronically, challenges remain. Almost half of remittances require data entry or a manual process to post, according to a recent study.2

For example, you may receive ACH transactions that deposit automatically, yet still create posting headaches if accompanying remittance data is not formatted properly. Other remittances may arrive separately, via email, only to languish in an individual clerk’s inbox. Your lockbox may scan checks and coupons as images—suitable for archiving and research—but requiring individual lookups and data entry to post. Online bill pay transactions too often begin in electronic format, only to reach you as a lump sum payment by check. This can delay your cash flow and defeat straight-through processing. Customer service, chargebacks, and representments add to the work load.

Automation yields many benefits

Reducing the amount of human intervention required to receive, post, and reconcile your customer payments delivers many benefits. Companies that automate their receivables can post payments 25 percent faster and are 46 percent more likely to match incoming payments with outstanding invoices automatically.1

Other benefits of receivables automation include:

  • Faster access to your cash
  • Reduced processing costs
  • Shorter days sales outstanding (DSO)
  • More timely cash flow intelligence to support business decisions
  • Greater productivity for accounts receivable staff
  • Stronger customer service

Best practices to improve how you post

With today’s sophisticated services, you can automate posting for cards, ACH, checks, wires, and even online bill pay transactions. Follow these best practices to get started:

  • Spend less energy on checks. Even though check use has declined dramatically, B2B companies still make half their payments by check—and processing costs the receiver an average of $1.50 per item.3,4 Start by diverting as many as possible to an image-equipped lockbox with multiple data transmissions and deposit windows each day. These changes will speed your cash flow, eliminate trips to the bank, and reduce data entry.
  • Improve your electronic billing. With electronic invoice delivery, customers view their bill via email, PDF, or via a secure web portal, then simply click to pay you. Yet not all services are created equal. Look for providers who can incorporate critical data elements—such as customer ID, account number, and invoice number—from the moment you present the invoice through payment and posting. Linking your dollars and data across your order-to-cash cycle will dramatically improve your efficiency and accelerate posting.
  • Take a single system approach. The more technologies, data files, and providers you need to manage, the more complicated and expensive posting will be. Using a payment gateway enables you to capture all your electronic payment methods—from your lockbox, office, call center, mobile app, and payment portal—in a single, secure system. This innovative hub enables you to receive electronic transaction data directly to your ERP or accounting system, gives you easy access to reports, and helps your staff work efficiently
  • Standardize your data files. Inconsistent or incomplete files impede straight-through processing and generate manual work. In most cases, your bank can standardize receivables data to your specifications, and even consolidate multiple payment types to a single file that’s ready to upload and post. If you accept online bill pay transactions from third party providers, work with your bank to receive those remittances—and accompanying data—electronically.
  • Get smart about exceptions. In addition to reducing exceptions, using a single tool to manage the remaining transactions will improve your productivity and efficiency. A secure online portal, hosted by you bank, can support quick decisioning on various transaction types. You can also integrate exception management into your ERP or accounting system, with custom data files from your financial institution or providers.

Today’s enhancements support future growth

Making changes may seem overwhelming and costly, but in reality, improving your posting can be budget-friendly and require minimal IT resources. Even small enhancements today will quickly add value and allow you to accept more payment types in the future.

For more information, contact your treasury management representative.

1. Aberdeen Group, “Improve Cash Flow Projections and Ops Efficiency and Reduce Risk with Automated AR Solutions,” January 2016
2. IOFM, “Transforming Accounts Receivable Processes to Speed the Revenue Cycle,” 2015
3. AFP, “2016 Electronic Payments Survey Report”
4. AFP, “2015 Payments Cost Benchmarking Survey”