Cash Application for E-payments and Lockbox



Tisha Clausell

Vendor Performance Manager, Zurich

Cash Application for E-payments and Lockbox_highradius_image

Sandy Telles

Treasury Operations and Project Manager, Zurich


Tisha Clausell:

Hello everyone and thank you for coming to our presentation. I want to start with a little joke this morning. So why do you think the robot got angry? Does anybody know? Because you kept pushing his buttons.

So we talked about robotics in some of the sessions and how artificial intelligence is changing the environment. And so, I’m going to talk about today how Zurich leveraged A.I. and received 85 percent processing. So a little bit about Zurich- Zurich is one of the most experienced insurers. Our customers choose us to protect the people and the things that they love. Our customers value our expertise, our knowledge, and stability. We share our risks with our customers and our insight with the communities and our stakeholders and we manage the business for value. We are growing our company’s earnings by reducing overhead costs, increasing operational efficiencies, and improving our processes. Like I said earlier, both Sandy and I have been with Zurich for many years, so we’ve been therefrom, the beginning to the end to see some different changes.

The department I work in is called finance operations, and finance operations have three key values that we focus on throughout the year. One of the biggest things is transactional excellence. We provide service inefficient and accurate customer cost-effective manners. We use our resources to eliminate waste and improve processes in our department; most of the people have that yellow belt like I have my yellow belt. And we strive to look at ways that we can approve and do processes more simpler without wasting time. So it’s a requirement that each new person does learn and get their yellow belt in our department. We also have business insights. We provide unique customer-related insights to our underwriters and Finance Partners.

So someone like me, I sit in on meetings with the underwriters and brokers and some of our customers to see ways we can improve, things we need to do to help our customers and so by working in the collections and finance operations department we get involved with that as well. We can understand our customers and make better business decisions because we actually sit down with them during those meetings. People development. That’s one of the things we actually focus on a lot like tonight, and today, this whole week I’ve been at a conference. Our department-we go to conferences, we do meetings, we do classes. That’s one of the things we strive for. So we have a big budget for people’s development because we want our team members to grow as much as possible. So we are continually striving to be the best global insurance company.

Tisha Clausell:

Some of the opportunities that we want to improve: Our wire and ACH application was a manual process and it was prone to errors, so it was a 100 percent manual. So we didn’t have any wires that actually were processed automatically. Also, the delay in cash application calls erroneous d-knots which is direct invoice cancellations and done and led us to be sent to our customers. Of course, the customers were really upset that they gathered the d-knot and perhaps they had paid their money. It could have been paid a week ago, two weeks ago, but it wasn’t applied. So, they were really upset about that. The errors also created numerous internal calls and external teams on a regular basis. I would get a call from a customer complaining that “Hey I paid you, why did I get this late letter?”, underwriting would get involved, upper management gets involved. And so we will have to have all those calls discussing why we were making mistakes which also impacted our aged receivables and you know people want to get their payments applied as fast as possible.

What we didn’t want to have for our agency was, we wanted every payment plan applied in their first week if possible. But we had aged over 90, over 120 days. So we want to decrease that as well. So we actually had a cash application journey. The stuff we took, we weren’t able to do all in one day we did it over a number of years. In 2005 we actually had our cash processing in-house. I actually was a manager of about 10 people at that time there actually only did cash processing. And so some people wrote them a check, some people wrote them the wires and ACHs, but they were all in-house. In 2006, we actually outsourced our cash application and that was a big transition. It involved us going to Poland which is where it was at that time. And people from Poland were actually coming over to our office as well. So that was actually a long process.

Tisha Clausell:

I was one of the first people that went to Poland to actually check out the systems to make sure that connections work in Poland because we were nervous because we had never done it at Zurich. After that, in 2007, we moved from our legacy system to S.A.P which was a huge transition for us because we were using a mainframe system. I had to go into S.A.P, which was a big accomplishment for us. We actually wind up as a customer S.A.P to our knees. We used FSCD which is a little bit different things, some people may use S.A.P AR but we use FSCD and we customize it and call our system “ARES”. In 2009 we implemented a lock-box key-in with our bank, which actually improved that meant I didn’t need to have my outsource team key-in our checks. When the checks came into the lock-box, the bank actually had the remittance information and they were able to send us the invoice and the payment number information right into the system. So every night, we would get a file and have it uploaded into our system and for checks, it was great.

We actually didn’t have any problems with checks, only that we were getting about 70% at that time with just the bank alone from the lock-box. But that wasn’t enough. We still had those Wires and ACHs that were totally manual. We needed to do something else. Which is why, we implemented, in 2012, Global Advice (which is a system that actually allows you to see additional information for ACHs and Wires). Mainly for CTX (CTX is an ACH where a customer can send addendum information). They can send their invoice number, the amount they’re paying and all that information can be viewed in a system. Some of the information that you saw in Global Advice, you can see it in your regular Wire application but it was a lot of additional stuff that we were missing. So that was what we did in 2012, but we didn’t stop there. We wanted an electronic lock-box.

[Tisha addressing people joining in]:

There are some seats over here if you want to come and sit down as well. On this side. I’ll give them a second.



Tisha Clausell:

Yes, you’re welcome. What we did for our Wires and ACH was that we had the bank actually send that [information] to the lock-box and so that information can be sent to us as an electronic file. That way, when we got our check file, we also got our Wires and ACH as well and that was uploaded to our system. That allows us to at least get the payment information into the system but it didn’t give us any detail. Thus we decided we need to do something else, which was Project BEER that we did in 2016. So now let’s take a minute to do a poll question. In your departments what are your top cash application challenges that you are seeing? Are we having problems with processing electronic payments? I see a few people with that’s one of their problems. What about non-stander-ed remittances? Yes and that was our biggest problem. Even though we send our brokers their invoices, they don’t send them back.

Here is a little summary of some of the things that we looked at when we looked at Project BEER. Some of our challenges were: Cash Application was like a 100% manual for our E-payments for our ACH and Wires, as well. We’re still receiving 60% of our payments as checks from our broker. So not everybody is doing ACH. Even worse, you don’t know if you are having that same problem where you’re still getting a lot of checks but that does cause some issues. Also with my outsourced team, it takes two to four days of delay in the posting of cash. So they have to get in a system, they have to do some research and because it’s a human being doing it, it takes longer than automation. Some of the results we were receiving at the project BEER are that we were able to reallocate 6 FTEs. They were actually able to do some higher value-added tests.

Some of the things they were doing instead of actually mainly applying cash, they started doing reconciliation; they started actually working with those customers that weren’t sending us any good backup to actually get them to send us better information. We also were able to reduce our bank fees which made the company really happy. So, instead of paying for keystrokes, We [used to] pay a certain amount per keystroke, [which] now we don’t have to pay. Also, we were able to achieve the same day cash posting, which actually improves our customer ratings a lot.

Now, we’ll look at some specific business scenarios that we went through. I know I talked about [how] earlier we had Global Advice and so some of the key items that I wanted to improve were: time spent getting the payments posted in a Receivable system, that was one of the big items we need to approve, the time we spent on researching our ACH payments; time spent calling those brokers on the phone, asking them to send us our email and then they sent us additional data and then it’s a basically faster application of our payments. The solution we implemented at that time was called Global Advice.

As I mentioned before, that’s a system where we can actually get additional information for our electronic payments. Some of the key benefits were that we were able to reduce the payment time. We had fewer conversations with our brokers. So we, at the collections department, we didn’t have to call them [customers] because we were actually getting the information and that we weren’t seeing initially. We were able to identify Check Payments and trends from the brokers so we were able to see what type of payments are being sent. I actually had an intern that summer that actually did a full analysis for me to let me know what percentage of customers are sending checks; what percent our customer sending ACHs and Wires and then what way are they’re sending it.

Tisha Clausell:

We actually contacted someone else’s brokers and asked them about the CTX and how they could actually send that invoice information to us via that type of transaction. So some people were like oh well, that would help, I’ll switch to that. Some people were already doing it and sending checks, but they weren’t sending the addendum information and they weren’t aware that they can actually do that. So they actually changed the way they were processing and we were able to identify some broker channels and ways that we can improve that. The next thing I mentioned earlier was the electronic lock-box and that was a great hit for us. Because it was some of the key things we wanted to improve, but as I mentioned- our wires and ACH were 100 percent manual. We wanted to reduce cash posting errors. So anytime you have something done manually it’s prone to error. So in time, you can get that electronically, it is a lot better. We wanted to reduce reconciliation issues in the way of our account. So well what’s happening with us and Zurich – we had one file on a bank that fed up the S.A.P. ledger, they show all the wire and ACH & they say we got that internally. However, into our subsystem, it was basically my team & plan of payments. So if they missed some payments the sub-system would say maybe we had one hundred million but they only plan 99 million. So it didn’t match. And so every month I would have to review this and reconcile and try to figure out why don’t they match what is happening. So that was one of the things we wanted to improve. We also wanted to reduce the intervention of payments manually. So what that did for us. We were able to reduce the payment time. We had the automated payment policy so that allowed us at least the payment in a system, it didn’t put it to the customer level and put it to the invoice number or a policy number.

But at least it got into the system. So our ledger and our sub-ledger balance now. We’re actually able to reduce some of that spent from our outsourced vendors. So at that time, they can eliminate two people, from doing their process that process is based on just their electronic lock-box and so they wanted to plan all manually to get all the payment into the system and then our ledger and sub-ledger matched but we could stop there. So, Sandy and I worked on a new project named project beer and BEER stands for Bringing Efficiency by Enabling Robotics. So we actually went to some seminars and conferences, we talked with different people, but then we had to find who would be our vendor for project beer. So some of the key things we wanted to improve were, we wanted to reduce the manual keying. So we didn’t want what my team had to apply to the policy invoice level. We wanted a system that can do that for us. We wanted to improve our receivables which we were able to do with the system. We wanted to reduce the number of customer complaints, delays, errors and we also wanted to reduce internal meetings. I did not like to meet with underwriters and when upper management asks me, Tisha, why were the payments not applied when we see that we received the money a month ago, what happened? So, I want to eliminate that so we need a solution to do it and the solution we implemented is the cash application solution from HighRadius. Some of the key benefits that we were able to receive- we had same day cash application, so when a file was uploaded into our system at night all those payments were updated and in our system, we have automated dunning.

Tisha Clausell:

So that was important because we don’t have to manage things like if payments are there or not there, our system does that, so we have rules in our system that actually say x number of days the payments are outstanding, you send this late letter. In X number of days the payment is still outstanding, you send this dnoc. That’s why we had to actually have our payments apply as fast as possible so customers will not be affected. We also were able to reduce our bank keying fees, so Sandy and I went to the bank and let them know that we were making those changes in that we no longer needed them for those particular lock-boxes anymore. And in the end, that improved our customer satisfaction because that’s one of the key goals we have for Zurich is customer satisfaction, just some of our goals and objectives are to compete with the market.

Zurich wants to compete with the market. So we have so many insurance carriers and we wanted to be the best. So in order to be able to compete, we had to do something different. We also need to get ahead of the banking trend. Everybody knows that we are hoping to move them from checks to electronic, so we had to get ahead of that. So that we will be ready if we start to receive more electronic payments. We wanted to increase that. We also wanted to improve customer satisfaction like I mentioned the customer is first at Zurich. They are who we care about the most and we want to make sure our customers are happy, so now renewed our best business and actually add additional business with us. We wanted our payments to be planned more timely and accurately and we wanted to reduce expenses allocate to cash processing. So even though we were outsourced and we do some banking transactions we needed to reduce the number of people that were actually doing the exception handling. So the solution we implemented was like I mentioned the HighRadius cash application. I mean you probably have seen this screen, maybe you actually have it are in the demos that they’ve had. So I’m just gonna talk about how it works for Zurich and what we have. So our customers are actually still sending their payments to the lock-box. They are sending that in Wires and ACH to the bank. But what happens is our I.T. has written a script. So each time the information comes into the system, we go out to our bank server and we pick up that information. So we have three deposit cuts. There’s a 430, a nine, and a one. And so at that time each one of those times, our script goes to the bank servers, picks it up and then they send information to HighRadius. So when HighRadius gets the file they get the check, they get the image of the check like the backup that came with that check. They get the wire and ACH information in that file. So that’s like I mentioned three times a day for checks and two times a day for Wires and ACH.

Tisha Clausell:

In addition to that, we send them our open AR. So we send them all our open items that are in our receivable system. So they get that daily too. So, because it can change each day, as stuff gets paid or new businesses happen, you’re going to get some additional information on your open AR. So we send that to them daily. Also for our customers, we have a mailbox, an e-mail box where they can actually mail their backup. So for wires and ACH, they send an email and it can be an Excel, it can be a PDF, it can be even just the text in email like some people just type “This belongs to payment or policy one, two, three” Now, this type gets an email. So we have a setup- each time an email comes into our mailbox it is automatically sent to HighRadius as well. So within seconds, they get the email. So as we get it, we send it to them. What we did is, HighRadius takes that information, they take the e-mails, they actually have access to global advice, so they take information from global advice as well and they use the rules that we’ve given them and actually at the end of the day, they compile everything and they send us a file, to us, with all the enhanced information on our files. We have the payments, we have the files, and we have the invoice number all sent to us. So what do you have to do to get to that stage? You have to do a project implementation. And how do you do your implementation is actually, it’s very important. One thing is if you do it right in the beginning, you actually will see better results. So the preparation phase is where you sign a contract and you gather and analyze simulation data. So what we did is, we didn’t want to just go by what HighRadius said they can do, we wanted a proof of concept. So we actually provided them – here are some payments, here are some emails we get, here are some of our payments check, here’s the backup. Show us how would you apply it. So they were able to show us that their system can read the information either from the email or from the OCR or from the checks and put the information that we wanted. So we had that proof of concept there as well. We also talked to other people that were already using HighRadius as well to see how did it work for you. Does it really work? That does sound too good to be true? But we were able to have them prove to us that it does work.

Tisha Clausell:

The next phase is the blueprint phase. And to me, that is the most important phase that you have. You actually are reviewing it as is. And then you’re trying to create that to be. So for doing a blueprint, we have some people from Houston and Harris actually come to our office. We actually had people in India where they have a lot of people out there that were on the phone with us. We sat in a room for at least a week actually go into detail of our asset sales process and so we talked about what happens. I gave them my lock-box instructions that the bank was using to help with the rules that we wanted to create. I actually spent several hours going over these rules, thinking about how I think these rules would work and what rules would work. This is where you spend most of your time. Once we did that we created the two b, As I said, that’s the most important, that you want to see how do you want to approve, what do you wanna process. The next phase is the realization phase where they go back and they take the information you gave them and they do the technical design, they do the code and configuration. And I think they actually do some testing before we do the testing, before they actually send it to us, to make sure whether, hey, is this working in a way we want it to work? Is this going to make Zurich or whatever company happy?

So then we have a testing phase where you go in and you realize you should test your information before you go live. You want to ensure that the data is received and applied correctly. So what we did at Zurich is that we actually used some old data like check which the bank had already applied for us during keying-in. So, we had that file and so we sent the same days off work to HighRadius and said,” Now, you apply it. Let me see what your system can do”. So, we can compare what the bank results were like I said the bank was at 70% already for checks. We were doing good with the bank anyway but we wanted to receive 85%. So, we sent to HighRadius and said,” Now, you apply it.”

Tisha Clausell:

I had an intern luckily that summer to help me out. So, she was able to compare this is what the bank did, this is what HighRadius did. In most of the cases, they actually did the same and then HighRadius’s edge was that they were able to apply more than the bank, some things that the bank could not read or missed, they were able to get that information because they had an open AR and our bank did not have an open AR. So, we saw that they did even better than the bank. And so we did several iterations of that we didn’t just do it one time we may have done it like eight times because we wanted to test and make sure that this really works. One should go to testing and feel like they have done the job and proven to me that they can do it then let’s sign off and get ready for training. So you have to train your staff or whoever is going to use the system, how to go into the system, how to ready those files. So you spend some time on them and then you have hyper care. Hyper care is when the system is stabilizing and you have a consultant. So we had a person, we can call whenever we wanted to, to ask questions to look at things if we see something is not been processed correctly, you can call and they can make changes. So it was actually somebody right there for us like we had a couple of people that we could always reach out to with questions anytime. Then you can get ready to go live.

Go Life can introduce you to the ticketing system and prepared for production. The ticketing system is which I use today. So if I see a payment that was not processed that I thought the way it should be or if they do not process the payment off, I can open up a ticket and say I don’t know whether the payment is applied with cash or card but the check-in the backup, it seems like to me should have been applied. They will respond as to why wasn’t done, they make changes to the rule. Maybe have a customer in the backup is not the way the system is set up to receive it. They can actually change the rule and make it a customer-specific rule or they may say is it possible to make a customer if they can change it. By most cases some may say yes, some may say no and you say well we tried and we will continue to make it a customer-specific rule because this customer sends payments every month. And we know that’s going to always be sent this way. Make a rule for customer ABC that if they put the policy at the end of verses or in the middle of a label that’s something else that you’ll pick it up. You can do that through the ticketing system. You can also actually have meanings if it’s something that needs to be discussed. We right now meet at least quarterly with HighRadius to discuss any open tickets, any other issues or anything we want to improve. So this is how we actually received our straight-through processing and how we actually implemented the cash application process. Now I’m going to bring Sandy up here and I’m going to open it up for questions for anyone. That they may have on actually how Zurich actually achieved 85 percent cash application via AI in their A/R process.

Tisha Clausell: Hello everyone and thank you for coming to our presentation. I want to start with a little joke this morning. So why do you think the robot got angry? Does anybody know? Because you kept pushing his buttons. So we talked about robotics in some of the sessions and how artificial intelligence is changing the environment. And so, I'm going to talk about today how Zurich leveraged A.I. and received 85 percent processing. So a little bit about Zurich- Zurich is one of the most experienced insurers. Our customers choose us to protect the people and the things that they love. Our customers value our expertise, our knowledge, and stability. We share our risks with our customers and our insight with the communities and our stakeholders and we manage the business for value. We are growing our company's earnings by reducing overhead costs, increasing operational efficiencies, and improving our processes. Like I said earlier, both Sandy and I have been with Zurich for many years, so we've been therefrom, the beginning to the end to see some different changes. The department I work in is called finance operations, and finance operations have three key values that we focus…

What you'll learn

Cash application in the insurance industry is painful – it requires timely determination of premium payments, broker margins and claims. The A/R team at Zurich decided to have BEER(Bringing Efficiency by Enabling Robotics). Learn how they leverage AI for straight-through processing for checks and E-payments.

There’s no time like the present

Get a Demo of Cash Application Cloud for Your Business

Request a Demo

Request Demo Character Man

HighRadius Cash Application Software enables the end-to-end automation of the cash application process that covers major benefits such as AI-enabled data capture for remittances, auto-linking of payments with open invoices, cost-cutting on lockbox fees and easy compatibility with any system due to its ERP-agnostic Saas infrastructure. Apart from the major benefits that it has, there are some key features which can not be missed out, some of them are Email Remittance capture, Discounts and Deductions Handling, Check Remittance Capture, Web Remittance Capture, Invoice Matching, and RDC & Mobile Payments.