Ideal Plug-and-Play Model for End-to-End Automation of Payments Processing

Challenges

Receivables Landscape

Southwire’s cash application process is handled by a team of three analysts, a lead, a supervisor, and a manager. There are two banking partners and six lockbox accounts. Payments are received via checks and electronically with multiple remittance sources across checks, emails, EDI files, and web portals. Check payments are processed using bank lockbox files and a standard SAP lockbox program while EFT payments processing is completely manual using online bank reports. Buyer group payments account for 20% (by value) of all payments with a high volume of post-processing exceptions due to the involvement of multiple entities.

• Two banking partners and six lockbox accounts
• Complicated buyer group business scenario with payments 20% (by value) of the total pie
• 100% manual processing of electronic payments
• Manual aggregation of electronic remittance from emails, EDI files, and web portals
• Check payments processed through a standard SAP lockbox program leading to inaccurate cash posting and high volume of exceptions handling
• No support for identification, coding and reason code mapping of short payments

Manual processing of payments is time-consuming and has limited scalability to respond to growing business needs.
The Southwire A/R team used bank lockbox files and a standard SAP lockbox program to process check payments while e remittance aggregation across emails, EDI files, and customer portals was completely manual. Cash application for buyer groups was a major challenge since invoices were generated at the group member level while payments were routed through the parent group with separate remittances provided by each group member.
Moreover, identification and coding of short payments was done manually With growing volumes of deductions and limited data availability, it had started to show heavily on the cash application and deductions management processes

Goals & Objectives

Operational efficiency:

• Cash posting across checks and e-payments with minimal manual intervention
• Almost real-time cash application for electronic payments across ACH, wire and payment cards

Ease of use:

• Plug-and-Play model – Minimal intrusion into the system and no disruption to existing processes
• Tight integration with ERP

Strategic goals:

• Enable the receivables team to operate in a customer relationship centric environment
• Handle the complexity of their business landscape

Cost saving:

• Eliminate bank data key-in costs while automating remittance aggregation and improving data capture quality