This e-book is an actionable summary that drills down the challenges in remittance processing and best-practices to build a robust remittance processing workflow for checks and e-payments
Straight-through processing is when payments are posted against open invoices in your ERP without any manual intervention.
As per a survey by NACHA-CRF 67.5% respondents have less than 60% straight-through posting. Adoption of varied e-payment formats and non
standardized remittance details could be the reasons for these low numbers.
In a perfect world, the A/R department would receive all its check payments with remittance details keyed-in by the bank and all its e-payments accompanied with standardized remittance advice that could directly be reconciled for cash posting. The direct match between the invoice numbers on the remittance and invoices would create a true straight-through process.
Due to the lack of any standardization, remittances continue to come from various sources and in various formats and templates. Each remittance scenario has a series of variable tasks, which prevent analysts from achieving the rhythm of an assembly line.
An AS-IS evaluation of cash application process indicates that most of the variability lies in two steps:
1. Remittance fetching
2. Interpretation of data
A highly manual and repetitive process leads to erroneous cash posting and additional burden on analysts for resolving exceptions.
Delayed cash posting
Time consuming activities of fetching and entering data slows down the cash application process. Analysts struggle to post cash the same day during
Low employee morale
High volume of low-value tasks without any strategic impact reduce cash application analysts to cash application clerks. Their entire days are spent chasing transactions and spreadsheets.