Next Generation Receivables Process Management

Welcome

Agenda

About Open Scan Business Challenges The A/R Opportunity Integrated Workflow Models for Automation

Lockbox Distributed

Distributed Capture Models Electronic Payments Deductions

Automatic Manual

Questions

Company Background

Founded in 1998 - based in Denver, ColoradoSoftware Development Company

Enterprise solutions Wholesale environment Accounts Receivable focus Accounts Payable/ECM solution

Initial Clients were/are State Child Support Organizations Installations in 26 states

Current Focus has been Corporate Clients More than 50 commercial clients

including 20+ in the Fortune 500 ”

The leader in financial workflow

automation including A/R & A/P with

proven success in the market for more

than a decade.

Processing payments is more complex Payment types are diversifying B2B paper checks are not going away Decoupled remittances are growing Unauthorized deductions are growing

Business Challenges

World-Class Organizations are More Efficient in Processing Customer Remittance Transactions

Average Time to Apply Cash (Business Days From Receipt of Customer Remittance Through

Successfully Completing the Cash Application to Individual Accounts)

Source: Hackett 2010 Finance Functional BM Peer Group

The A/R Opportunity

World Class

Process Cost* per Customer RemittanceCustomer Remittances per FTE

Standardized Processes and Automation Increases World-Class Productivity and Lowers Unit Costs in Cash Application

*Process Cost = Labor costs + Outsourcing Costs

22,509

29,271

Peer Group World Class

Source: Hackett 2010 Finance Functional BM

The A/R Opportunity

Traditional ways to Process Receivables: Lockbox Processing In-House Processing Electronic Payments

New Technologies allow Corporations to: Maximize Posting Accuracy Decrease Resource Requirements Eliminate Data Entry Costs Optimize Exception and

Deduction Handling

A/R System

Mail Arrives at Bank

Mail Opened and Contents

Scanned

Checks Deposited

Remit and Check Images Transmitted

to Web

Current Bank Lockbox Options

Lockbox

Direct Keying from Image

Exceptions Handling

Traditional Process

Remit and Check Data Transmitted to

Corporate

Corporate100k invoice line items

20 characters per lineX

X$0.01 per keystroke

$20,000 per month

Mail Arrives at Corporate

or Field Location

Mail opened and sorted into batches

A/R System

Checks are copiedDeposit is prepared

Invoices are manually processed into A/R

system

Bad News: Manual cash

application Control tape &

re-association Risk/Compliance Data quality issues

Checks are physically delivered or scanned

and transmitted to bank

Current In-House or Distributed Workflow

Traditional Process

DEDUCTION ID

Mail Arrives at Bank

Mail Opened and Contents

Scanned

Checks Deposited

Remit and Check Images Transmitted

to Corporate

Bank Lockbox

A/R System

AUTO EXTRACT

A/R MATCHING

POSTING FILE

Invoice #Amount DatePO #Customer #etc.

Automated Lockbox Workflow

Lockbox Process

ACH & CTX /CCD+

ACH Wires

CorporateElectronic Remittance: Emails Pdf Excel

Mail Arrives at Corporate

Corporate

Mail Opened and Contents Scanned

Cash Application

A/R System

Electronic Deposit

Automated In-House Model

In-House Process

AUTO EXTRACT

A/R MATCHING

DEDUCTION ID

POSTING FILE

InvoiceAmount DatePOCustomer #etc.

ICL CREATION

Check and Remit Images Sent to Open

Scan Server

Remote Sites

$ $ $ $

Images of Checks/Remits Transmitted from Lockbox

Distributed Process

Check21 Electronic Deposit

Data extracted from all images & matched, cash applied, ICL prepared by Open Scan

Checks arrive, contents scanned & cash deposited

Hybrid (all Locations)Corporate

Electronics Processing Workflow

Your Bank Sends you:

NACHA file,EDI 820,

EDI 820 CTX,or

EDI 820 CCD+

Client Bank

Corporate

Cash Application

A/R System

A/R MATCHING

DEDUCTION ID

POSTING FILE

Invoice #Amount DatePO #Customer #Etc.

Client

Depository Bank

Your Client Initiates an Electronic

Payment (ACH) from their Account

Their Bank Transfers Fundswith a NACHA

Compliant Data Feed

DATA IMPORTER

IMAGE CREATION

Account #Amount InvoicePOCustomer #

Electronics Processing

1Examine a payment

Search and examine remit(s)

This is an image of the remit

Electronics Processing

Drag and drop. The remit is moved into the payment.

Submit

Automatic Deduction Identification

Deduction Identification

Invoice With Deduction DI Auto

Tax Exempt Code

Freight Code

Small Dollar Code

Net 10 Term Code

Automatically Assigned Code – Ready for Processing

Invoice123752

Invoice Received in Under 10 Days= 5% discount or $29

Tax Frt Sd Net 10 (5%)

123752 42 68 < 20 291237

Codes are Based on Client’s Business Rules

Rules are Cross Referenced in Priority Order Based on Clients Preference.

Expected

$580 Paid

Tax Exempt Code

Freight Code

Small Dollar Code

Net 20 Term Code

Invoice With Deduction

Manual Deduction Identification

DI Auto

Tax Frt Sd Net 20

234644 $82 $104 < $20 $55

Invoice234644 -$84

Invoice Enters DI Manual and a User Selects the Appropriate Code(s) Through a Simple Pull-Down Menu.

Broken crate

Deduction Identification

Reduction of Data Entry Costs One-time expense True automation, not outsourcing

Integrated Payment Workflow Corporate Payments of all types Remote Deposit Capture Electronic payments

Improved Data Speed and Accuracy Proven algorithms Validation prior to posting Same day processing

Better Customer Service Customers can still remit to the same local site as always Maximizes effectiveness of collections Timely accurate posting reduces unnecessary credit holds

Major Benefits of Automation

Clients

If you would like to learn more or have additional questions, visit www.openscan.com, e-mail bbonjean@openscan.com

or call 303.867.7419

Thank You For Attending

Questions

Next Generation Receivables Process Management

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