By Carrie Krell, campaign manager, Esker
Given the lack of market research data about accounts receivable (AR) automation, the Institute of Financial Operations (IFO) and Esker teamed up this spring on an AR automation study -- a fact-finding mission of sorts. The results are in, and they highlight key findings of qualitative and quantitative research conducted to gain insights into AR automation trends among companies in various industries.
Presented to several thousand AR professionals during the spring of 2011, the survey checked the pulse of the business world to discover how companies are sending their invoices to customers, the cost of sending those invoices, perceptions about the benefits of electronic invoice delivery, the key challenges of customer invoicing and the main obstacles to implementing solutions for automation within accounts receivable. In addition, the survey was intended to gauge trends in AR automation toward initiatives to reduce customer invoicing costs, improve invoice delivery and visibility, and facilitate customer adoption of electronic invoicing.
What the survey found is that invoice delivery processes remain paper-based at most companies, raising several key questions:
... How are companies sending invoices (postal mail, fax or email)?
... What is it costing companies to send out invoices?
... What are the key challenges of customer invoicing?
... What are the main obstacles to implementing an AR automation solution?
... How much time and money could e-invoicing save?
Based on the findings of this study, it is clear that AR departments have a long way to go in migrating from inefficient paper-based processes. The recommendation is for companies to keep a simple focus on delivery of customer invoices in assessing the value of technologies for AR automation. By focusing on delivery and investing in a solution that addresses their specific goals with regard to sending invoices, companies can take advantage of the opportunity to significantly reduce costs and improve efficiency.
On Tuesday afternoon, IFO and Esker will present a free webinar on the survey findings. For more information, visit: http://www.theiarp.org/ViewItem-563.do?parentCatId=271.
Showing posts with label ach payments. Show all posts
Showing posts with label ach payments. Show all posts
Saturday, June 25, 2011
Tuesday, April 12, 2011
NACHA's Wheels
By Mark Brousseau
NACHA's Pay It Green sport utility vehicle (SUV) at its Payments 2011 conference last week in Austin, Texas.
NACHA's Pay It Green sport utility vehicle (SUV) at its Payments 2011 conference last week in Austin, Texas.
Monday, April 4, 2011
EIPP takes center stage at NACHA Payments
Mark Brousseau
As businesses continue to push for reductions in operations costs and look for ways to support green initiatives, it’s no surprise that more of them are turning to electronic invoice presentment and payment (EIPP) as a solution. EIPP is a hot topic this week at NACHA’s Payments 2011 in Austin, Texas – great timing with Earth Day just a few weeks away.
“The volume of paper required to support traditional invoice and payments processes can be enormous,” said Michael Lane, CEO for EIPP solutions provider Data Impact. “According to NACHA’s PayItGreen Alliance, a firm initiating 260,000 paper payments annually could save significant resources by converting just 20 percent of those payments to electronic. And similar savings can be gained through electronic invoicing as well.”
Data Impact’s electronic invoicing solution allows suppliers to upload invoices and related documents to a secure site, and then customers can access the website and make a payment.
Considering the high amount of paper invoices that are wasted every year, the benefits to electronic invoicing are substantial, Lane said. International Account Payable Professionals (IAPP) and The Association for Work Process Improvement’s (TAWPI) 2011 Account Payable (AP) Automation Study indicates that 90 percent of respondents still receive paper-based invoices in their organization – a situation that Lane says businesses no longer can afford.
With EIPP, companies can solve their excess paper invoice problem while implementing a green solution. Lane said there are several ways e-invoicing support green initiatives:
· Reduced paper processing, printing, and storage
· Decreased duplication of invoices – “You won’t have four copies of the same invoice in four different places,” Lane noted.
· Reduced paper mailing, handling, and postage
“The green factor is obvious with e-invoicing,” Lane said. “But, its real value is streamlining procedures while providing businesses with a major cost reduction in account receivable functions such as invoice delivery, copy invoice and reconciliation.”
What do you think?
As businesses continue to push for reductions in operations costs and look for ways to support green initiatives, it’s no surprise that more of them are turning to electronic invoice presentment and payment (EIPP) as a solution. EIPP is a hot topic this week at NACHA’s Payments 2011 in Austin, Texas – great timing with Earth Day just a few weeks away.
“The volume of paper required to support traditional invoice and payments processes can be enormous,” said Michael Lane, CEO for EIPP solutions provider Data Impact. “According to NACHA’s PayItGreen Alliance, a firm initiating 260,000 paper payments annually could save significant resources by converting just 20 percent of those payments to electronic. And similar savings can be gained through electronic invoicing as well.”
Data Impact’s electronic invoicing solution allows suppliers to upload invoices and related documents to a secure site, and then customers can access the website and make a payment.
Considering the high amount of paper invoices that are wasted every year, the benefits to electronic invoicing are substantial, Lane said. International Account Payable Professionals (IAPP) and The Association for Work Process Improvement’s (TAWPI) 2011 Account Payable (AP) Automation Study indicates that 90 percent of respondents still receive paper-based invoices in their organization – a situation that Lane says businesses no longer can afford.
With EIPP, companies can solve their excess paper invoice problem while implementing a green solution. Lane said there are several ways e-invoicing support green initiatives:
· Reduced paper processing, printing, and storage
· Decreased duplication of invoices – “You won’t have four copies of the same invoice in four different places,” Lane noted.
· Reduced paper mailing, handling, and postage
“The green factor is obvious with e-invoicing,” Lane said. “But, its real value is streamlining procedures while providing businesses with a major cost reduction in account receivable functions such as invoice delivery, copy invoice and reconciliation.”
What do you think?
Getting comfy at NACHA Payments
Mark Brousseau
Visitors to 3i Infotech's booth this week at NACHA Payments in Austin, Texas, have a chance to win a limited edition Snuggie bearing the company's logo. Here, I model the Snuggie with Kathy Hamburger, president, North America, and global head of BPO for 3i Infotech.
Ordinarily, I ask for your opinion at the end of these posts. Don't bother -- I already know.
Visitors to 3i Infotech's booth this week at NACHA Payments in Austin, Texas, have a chance to win a limited edition Snuggie bearing the company's logo. Here, I model the Snuggie with Kathy Hamburger, president, North America, and global head of BPO for 3i Infotech.
Ordinarily, I ask for your opinion at the end of these posts. Don't bother -- I already know.
High-dollar transactions moving to p-cards
By Mark Brousseau
Purchasing card (p-card) volume growth remains strong, Aaron L. Bills, founder and chief operating officer of 3 Delta Systems said this morning during a wide-ranging interview at NACHA Payments in Austin, Texas. “We never saw a slow down as a result of the recession,” Bills said. 3 Delta Systems expects to build on this growth with the release today of a new scalable platform that can handle any payment.
As evidence of the growth of p-cards, Bills points to a milestone that his company reached last month: for time, 3 Delta Systems processed over 1 million p-card transactions, representing more than $1 billion in value, in a single month.
“Part of this growth is the fact the economy is coming back, but the major driver is the increased use of buyer-initiated payments in accounts payables,” Bills said.
For instance, one 3 Delta Systems customer, a healthcare supplies firm, processed $11 million in p-card payments in March, representing just 11 transactions, he said. “And it would have only been two p-card transactions if the company’s payments processor could handle transactions of more than $1 million each,” Bills added.
“This may be an extreme case, but there are versions of this story unfolding all over the place. P-cards are really starting to step up,” Bills said. “P-cards are picking up a greater share of business-to-business transactions at more organizations.”
Bills said he isn’t surprised by the growth of p-cards, given their maturity. “P-cards are established, they are ubiquitous, there is a financial infrastructure in place, and all of the parties understand the rules,” he said. What’s more, merchants are willing to accept p-cards, “as long as they are not getting a 4 percent haircut,” Bills noted.
“From the point of view of the companies using p-cards, they earn a revenue share for every purchase that they make,” said Daniel L. Miner, CTP, general manager, Treasury Services, 3 Delta Systems. “At a time when money is tight for most companies, p-cards provide an opportunity to turn a cost center into a revenue-generating cost center. We’ve seen a lot of companies jump on this concept.”
Miner notes that financial institutions are helping to drive p-card volume growth. “There’s an incentive for issuing banks to get p-cards out there. They are looking for alternatives to consumer cards,” Miner explained. “We’re seeing more banks talking to their corporate customers about moving p-cards to the next level to earn a greater revenue share, and the corporates are responding.”
What do you think?
Purchasing card (p-card) volume growth remains strong, Aaron L. Bills, founder and chief operating officer of 3 Delta Systems said this morning during a wide-ranging interview at NACHA Payments in Austin, Texas. “We never saw a slow down as a result of the recession,” Bills said. 3 Delta Systems expects to build on this growth with the release today of a new scalable platform that can handle any payment.
As evidence of the growth of p-cards, Bills points to a milestone that his company reached last month: for time, 3 Delta Systems processed over 1 million p-card transactions, representing more than $1 billion in value, in a single month.
“Part of this growth is the fact the economy is coming back, but the major driver is the increased use of buyer-initiated payments in accounts payables,” Bills said.
For instance, one 3 Delta Systems customer, a healthcare supplies firm, processed $11 million in p-card payments in March, representing just 11 transactions, he said. “And it would have only been two p-card transactions if the company’s payments processor could handle transactions of more than $1 million each,” Bills added.
“This may be an extreme case, but there are versions of this story unfolding all over the place. P-cards are really starting to step up,” Bills said. “P-cards are picking up a greater share of business-to-business transactions at more organizations.”
Bills said he isn’t surprised by the growth of p-cards, given their maturity. “P-cards are established, they are ubiquitous, there is a financial infrastructure in place, and all of the parties understand the rules,” he said. What’s more, merchants are willing to accept p-cards, “as long as they are not getting a 4 percent haircut,” Bills noted.
“From the point of view of the companies using p-cards, they earn a revenue share for every purchase that they make,” said Daniel L. Miner, CTP, general manager, Treasury Services, 3 Delta Systems. “At a time when money is tight for most companies, p-cards provide an opportunity to turn a cost center into a revenue-generating cost center. We’ve seen a lot of companies jump on this concept.”
Miner notes that financial institutions are helping to drive p-card volume growth. “There’s an incentive for issuing banks to get p-cards out there. They are looking for alternatives to consumer cards,” Miner explained. “We’re seeing more banks talking to their corporate customers about moving p-cards to the next level to earn a greater revenue share, and the corporates are responding.”
What do you think?
Tuesday, July 27, 2010
Electronic invoicing gains momentum
Posted by Mark Brousseau
Accounts Payable (AP) functions are still drowning in paper, but that may be about to change. According to APQC’s Open Standards Benchmarking in accounts payable, on average 69.4 percent of invoices still require manual re-keying of line-item data, and only 20.1 percent of invoice line items are received electronically. Although myriad technologies perform an incredible array of tasks in successful companies around the globe, APQC (www.apqc.org) notes that AP departments are only now approaching the crucial tipping point where electronic invoicing will overtake manual, paper-based processes, a milestone expected to occur in 2011.
Electronic payment systems now on the market promise efficient communication, reliable audit trails, and faster/smoother data processing between internal departments and external suppliers. Differing systems offer various levels of transparency, approvals, and monitoring from procurement to payment. However, the common theme is less paper and less manual keying of data.
APQC says a typical transaction begins when a purchase order request is entered into the buyer’s system; once a supervisor provides approval, the appropriate vendor is notified. The vendor then generates an invoice while simultaneously arranging delivery of their goods or services. The invoice is then routed electronically to the AP department, which matches the invoice to the purchase order and, often, other documents that prove that goods or services were received as expected. Once the verification is complete, the transfer of the payment is then triggered.
The level of automation and sophistication can vary widely; a PDF of an invoice sent via email sits on one end of the automation spectrum, with a fully “touchless” integrated system that connects buyer and seller at the other end.
Automated payment technology has been in place at many large companies for years, but the systems were often large-scale customized initiatives, expensive both to build and maintain. As more advanced technology tools arrive on the market, the costs as well as the barriers to implementation continue to fall, APQC concludes.
What do you think?
Accounts Payable (AP) functions are still drowning in paper, but that may be about to change. According to APQC’s Open Standards Benchmarking in accounts payable, on average 69.4 percent of invoices still require manual re-keying of line-item data, and only 20.1 percent of invoice line items are received electronically. Although myriad technologies perform an incredible array of tasks in successful companies around the globe, APQC (www.apqc.org) notes that AP departments are only now approaching the crucial tipping point where electronic invoicing will overtake manual, paper-based processes, a milestone expected to occur in 2011.
Electronic payment systems now on the market promise efficient communication, reliable audit trails, and faster/smoother data processing between internal departments and external suppliers. Differing systems offer various levels of transparency, approvals, and monitoring from procurement to payment. However, the common theme is less paper and less manual keying of data.
APQC says a typical transaction begins when a purchase order request is entered into the buyer’s system; once a supervisor provides approval, the appropriate vendor is notified. The vendor then generates an invoice while simultaneously arranging delivery of their goods or services. The invoice is then routed electronically to the AP department, which matches the invoice to the purchase order and, often, other documents that prove that goods or services were received as expected. Once the verification is complete, the transfer of the payment is then triggered.
The level of automation and sophistication can vary widely; a PDF of an invoice sent via email sits on one end of the automation spectrum, with a fully “touchless” integrated system that connects buyer and seller at the other end.
Automated payment technology has been in place at many large companies for years, but the systems were often large-scale customized initiatives, expensive both to build and maintain. As more advanced technology tools arrive on the market, the costs as well as the barriers to implementation continue to fall, APQC concludes.
What do you think?
Tuesday, June 29, 2010
Taking the Sting Out of ACH Dispute Management
Posted by Mark Brousseau
The financial services landscape is undergoing radical change, with transaction processing rapidly migrating from paper-based to electronic payments. According to the Federal Reserve's 2007 Payments Study, electronic payments now exceed two-thirds of all non-cash payments -- a big change from a decade ago when paper checks were still king. Automated Clearing House (ACH) transactions have been a key to the growth of electronic payments. The number of ACH transactions in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007, NACHA reports.
But this ACH growth also has created new back-office challenges, particularly in the area of transaction dispute management. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E have led to increases in operations expenses and potentially higher charge-offs associated with ACH disputes. And changes in the interpretation of Regulation E -- spelled out by Federal Reserve Bank staff and an OCC Advisory Letter -- may further complicate matters.
The Situation
One of the nation's largest bank ACH processors has taken proactive measures to better manage its ACH disputes. The bank's ACH operations perform a wide range of functions, including daily inbound and outbound transaction management, implementation and maintenance, customer service, compliance, and exception support.
Over the past several years, the bank has achieved significant growth in its ACH transaction volume. Along with this growth in overall ACH transactions, the bank has seen its ACH disputes increase 25 percent during the same period.
To be sure, the overall growth in ACH volumes is a factor in the increasing number of disputes. But customers also are better educated about ACH, and have higher expectations. Regardless of the cause, ACH disputes are costly to manage (with different attributes for each dispute and conflicting Regulation E and NACHA timelines), and present the risk of non-compliance and charge-off losses.
The Solution
Recognizing these challenges, the bank began an evaluation of solutions to better manage its ACH dispute process. At that time, the bank used an ACH processing product that kept transactions online for a short period of time, after which the information was archived to an offline report warehouse. The offline warehouse required the bank to "restore" reports and customer statements, a time-consuming and costly process that prevented the bank from providing quick responses to customer inquiries.
The bank evaluated three options for enhancing its ACH capabilities: further extending its legacy ACH solution's capabilities, developing an in-house solution, or leveraging a hosted solution. Scarce in-house IT resources precluded the bank from extending its legacy solution's warehouse capabilities. Similarly, the bank ruled out developing a custom solution because of competing demands for its limited IT resources and the long time-to-market required to develop an in-house solution.
Ultimately, the bank selected a hosted ACH solution from eGistics based on its compelling business case and its track record in the bank's lockbox operation. Using eGistics, the bank was able to implement an ACH Dispute Management solution faster, more effectively, and more economically than it could using internal resources or its current ACH vendor.
Within a few weeks of selection eGistics delivered its ACH solution, which supports a range of ACH functions including dispute research, customer service inquiries (notably questions about transaction details and debit authorization), and compliance reporting for potential rules violations. eGistics’ ACH Dispute Management solution provides a secure, easy to use Web interface that enables users to quickly search ACH transactions using a variety of configurable search criteria.
The Benefits
Most important to the bank, the eGistics hosted framework streamlined the research, management and reporting of ACH transaction disputes. Here's how it works: The bank receives ACH transmission files from the ACH network. A copy of these files is forwarded to the eGistics ACH solution. Operators log in to the eGistics platform and are able to search for transactions in real-time. Additionally, transactions can be marked as disputed, and then managed through the resolution process. Because there is a single view of the transactions, all operators can see the status of a dispute or inquiry. Finally, each disputed transaction is given a disposition status such as: credited, denied, or returned.
Streamlined research and management of ACH disputes were part of an overall business case for the bank that included long-term storage, improved customer service, attractive total cost of ownership, minimal internal resources, minimal capital expense, and rapid deployment. And eGistics provided the bank with the peace of mind that its solution complied with industry requirements, was reliable and scalable, ensured the privacy of critical data, and maintained complete access management through transaction tracking, auditing and reporting.
The eGistics hosted solution enhances the bank's dispute management process by providing: real-time distributed data access to any authorized user (even across branches or operations centers); intuitive search capabilities; the ability to annotate comments to disputed transactions; and the ability to export data (such as for batch extracts). The eGistics solution also has provided the bank with expanded search capabilities, including the ability to search on any alpha-numeric field (e.g. date, amount, customer, etc.) or using multiple "operators" (e.g. "contains," "greater than," "less than," "equal to," etc.). eGistics' ability to search data based on configurable parameters allows the bank to spot trends and react more effectively to unauthorized ACH debits. And the filtering capabilities provided by the eGistics research tool will enable the bank to block and restrict access to certain transactions, when required. What's more, the bank can store data in the eGistics solution for an unlimited period of time.
The functionality delivered by the eGistics solution supports a range of ACH functions at the bank, including: dispute research; customer service inquiries (notably, questions about transaction details and debit authorization); fraud mitigation; and compliance (reporting for potential rules violations).
The Bottom Line
At a time when rising ACH dispute volumes are impacting the back-office operations at banks, one of the largest ACH banks in the United States has achieved significant benefits by moving to a hosted ACH dispute management solution. These benefits include better, faster customer service, more accurate and timelier dispute status and tracking, streamlined ACH operations with lower costs, and reduced losses from charge-offs.
The financial services landscape is undergoing radical change, with transaction processing rapidly migrating from paper-based to electronic payments. According to the Federal Reserve's 2007 Payments Study, electronic payments now exceed two-thirds of all non-cash payments -- a big change from a decade ago when paper checks were still king. Automated Clearing House (ACH) transactions have been a key to the growth of electronic payments. The number of ACH transactions in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007, NACHA reports.
But this ACH growth also has created new back-office challenges, particularly in the area of transaction dispute management. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E have led to increases in operations expenses and potentially higher charge-offs associated with ACH disputes. And changes in the interpretation of Regulation E -- spelled out by Federal Reserve Bank staff and an OCC Advisory Letter -- may further complicate matters.
The Situation
One of the nation's largest bank ACH processors has taken proactive measures to better manage its ACH disputes. The bank's ACH operations perform a wide range of functions, including daily inbound and outbound transaction management, implementation and maintenance, customer service, compliance, and exception support.
Over the past several years, the bank has achieved significant growth in its ACH transaction volume. Along with this growth in overall ACH transactions, the bank has seen its ACH disputes increase 25 percent during the same period.
To be sure, the overall growth in ACH volumes is a factor in the increasing number of disputes. But customers also are better educated about ACH, and have higher expectations. Regardless of the cause, ACH disputes are costly to manage (with different attributes for each dispute and conflicting Regulation E and NACHA timelines), and present the risk of non-compliance and charge-off losses.
The Solution
Recognizing these challenges, the bank began an evaluation of solutions to better manage its ACH dispute process. At that time, the bank used an ACH processing product that kept transactions online for a short period of time, after which the information was archived to an offline report warehouse. The offline warehouse required the bank to "restore" reports and customer statements, a time-consuming and costly process that prevented the bank from providing quick responses to customer inquiries.
The bank evaluated three options for enhancing its ACH capabilities: further extending its legacy ACH solution's capabilities, developing an in-house solution, or leveraging a hosted solution. Scarce in-house IT resources precluded the bank from extending its legacy solution's warehouse capabilities. Similarly, the bank ruled out developing a custom solution because of competing demands for its limited IT resources and the long time-to-market required to develop an in-house solution.
Ultimately, the bank selected a hosted ACH solution from eGistics based on its compelling business case and its track record in the bank's lockbox operation. Using eGistics, the bank was able to implement an ACH Dispute Management solution faster, more effectively, and more economically than it could using internal resources or its current ACH vendor.
Within a few weeks of selection eGistics delivered its ACH solution, which supports a range of ACH functions including dispute research, customer service inquiries (notably questions about transaction details and debit authorization), and compliance reporting for potential rules violations. eGistics’ ACH Dispute Management solution provides a secure, easy to use Web interface that enables users to quickly search ACH transactions using a variety of configurable search criteria.
The Benefits
Most important to the bank, the eGistics hosted framework streamlined the research, management and reporting of ACH transaction disputes. Here's how it works: The bank receives ACH transmission files from the ACH network. A copy of these files is forwarded to the eGistics ACH solution. Operators log in to the eGistics platform and are able to search for transactions in real-time. Additionally, transactions can be marked as disputed, and then managed through the resolution process. Because there is a single view of the transactions, all operators can see the status of a dispute or inquiry. Finally, each disputed transaction is given a disposition status such as: credited, denied, or returned.
Streamlined research and management of ACH disputes were part of an overall business case for the bank that included long-term storage, improved customer service, attractive total cost of ownership, minimal internal resources, minimal capital expense, and rapid deployment. And eGistics provided the bank with the peace of mind that its solution complied with industry requirements, was reliable and scalable, ensured the privacy of critical data, and maintained complete access management through transaction tracking, auditing and reporting.
The eGistics hosted solution enhances the bank's dispute management process by providing: real-time distributed data access to any authorized user (even across branches or operations centers); intuitive search capabilities; the ability to annotate comments to disputed transactions; and the ability to export data (such as for batch extracts). The eGistics solution also has provided the bank with expanded search capabilities, including the ability to search on any alpha-numeric field (e.g. date, amount, customer, etc.) or using multiple "operators" (e.g. "contains," "greater than," "less than," "equal to," etc.). eGistics' ability to search data based on configurable parameters allows the bank to spot trends and react more effectively to unauthorized ACH debits. And the filtering capabilities provided by the eGistics research tool will enable the bank to block and restrict access to certain transactions, when required. What's more, the bank can store data in the eGistics solution for an unlimited period of time.
The functionality delivered by the eGistics solution supports a range of ACH functions at the bank, including: dispute research; customer service inquiries (notably, questions about transaction details and debit authorization); fraud mitigation; and compliance (reporting for potential rules violations).
The Bottom Line
At a time when rising ACH dispute volumes are impacting the back-office operations at banks, one of the largest ACH banks in the United States has achieved significant benefits by moving to a hosted ACH dispute management solution. These benefits include better, faster customer service, more accurate and timelier dispute status and tracking, streamlined ACH operations with lower costs, and reduced losses from charge-offs.
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