Project Description

Seedling at various stages of growth in soil.Where are you on the manual-to-automated AR scale?

Accounts receivable departments today are charged with much more than collecting incoming payments. They play a strategic role in producing a company’s working capital and managing its cash flows. And they’re under pressure to continuously become more effective at both.

Top performing AR departments run on fully-automated processes, but few can claim that status. Wherever you are on the manual-to-automated continuum, it’s time to advance to the next level. Every step you take can decrease days sales outstanding (DSO) and increase working capital. It can also create happier customers who are likely to spend more with your company.

The benefits are compelling. The question is, if you can’t automate everything at once (and very few can), where do you start? First look at all the payment types you receive. Then determine where your biggest pain points and payback potential lay.

What form of receivables do you receive?

Checks. Absent a government mandate, the U.S. payments system will never be entirely free of checks. A stubborn minority of consumers still cling to checks, and the typical organization still receives 44% of its business-to-business payments by checki. Whether you receive checks in lockboxes, stores, or offices, you’ll want to convert the paper to electronic as soon as possible.

Virtual lockbox is an integrated check scanning and remote deposit capture service that can bring automated cash application rates to 90% or higher and improve cash availability by days.


Wires. Although tried and true, electronic payments can be the most troublesome to post. Remittance information accompanies wires, however, it has no structure. Manual posting is usually the only option.

ACH. About 61% of payers send remittance information separately from their ACH paymentsii, so it takes up to six days to manually post and apply those paymentsiii. Companies often are shocked to see auto posting rates drop significantly when switching from lockbox to ACH.

To automate electronic receivables, you need two things:

  1. Customer communications – Ask wire remitters to send an email with invoice detail ahead of their payment. Launch an ongoing campaign to advise current and new customers of the information you need to post their ACH payments.
  2. Data to dollars matching with online access – Artificial intelligence matches wire and ACH payments to remittance information at a hit rate of 90% or more to enable straight thru processing and auto-application. The technology repairs fixable errors, such as incorrect formatting, and presents only true exceptions to your staff for additional research. Manual handling is reduced to a minimum.


Cards. Consumers often charge invoice amounts to credit cards in order to collect award points or postpone payment. Fifty-five percent of organizations accept commercial card payments from business customers, but these cards are seldom used to settle invoices.

Online. Consumers pay online on biller, bank, and retail websites and through payment services such as Zelle® and PayPal®. To manage online consumer payments, you need a consolidator to collect and send them to you in a single electronic file for posting to your AR or ERP system.

Businesses pay online if you allow them to, and you should. For this, you need a website branded with your look and logo but hosted by your bank. With a few clicks, a customer can make a payment and tell you exactly what it’s for. The website is tied to your bank account, so the payment posts to your account almost immediately, freeing the customer’s credit.

One size doesn’t fit all

Today, there’s no one way for customers to pay. To optimize the customer experience and create a competitive advantage for your company, you need to accommodate every payment option. Look at your receivables holistically considering where process improvements will have the greatest impact on your company and customers. Automated solutions cost money up front, but they easily can pay for themselves through working capital gains and DSO declines. Automation is an investment that’s simply smart.

For more information, contact your Wells Fargo representative or fill out the Contact Us form on this site.

i AFP, “2016 Electronic Payments Survey Report.”
ii Ibid
iii Aberdeen Group, “Improve Cash Flow Projections and Ops Efficiency and Reduce Risk with Automated AR Solutions,” January 2016.