RDC as a Receivables Platform - remotedepositcapture.com · RDC as a Receivables Platform September 28, 2012 Blaine Carnprobst ... Lockbox . Los Angeles Chicago, IL . Lockbox Electronic

RDC as a Receivables Platform

September 28, 2012

Blaine Carnprobst Managing Director, Receivables BNY Mellon Sam Golbach Senior Vice President WAUSAU Financial Systems Ed McLaughlin RemoteDepositCapture.com

• Receivables Hub Definition & Purpose • Evolution of Receivables Processing • Integral Parts of A/R & Lockbox

– Remote Deposit Capture – Document Imaging – Long Term Image Archive – Integration Of Field Payments – Decisioning Services – A/R Matching

• Deductions • Consolidated Data Feed • Analytics & Insight

Outline

Copyright 2012, RemoteDepositCapture.com 2

Presenter

Presentation Notes

Ed

BNY Mellon

Asset Management Wealth Management Securities Servicing Treasury Services

Multi-boutique investment manager

Wealth management for individuals and families

Full range of financial operations offerings

Cash management and global payments services

$1.2 trillion assets under management1

8th largest US asset manager3

11th largest global asset manager4

$176 billion in private client assets1 Top 3 ranked private bank in US5

Top 10 US wealth manager6

$26.6 trillion assets under custody and administration1

$11.9 trillion outstanding debt serviced1

$1.8 trillion tri-party balances daily1

$1.4 trillion average payments processed daily1

170,000 transactions conducted daily1

100+ currencies in which we transact

1- As of March 31, 2012. 2- Aggregate assets under management of $1.3 trillion. 3- Institutional Investor, 2011. 4- Pensions & Investments, 2011. 5 - Barron’s Penta, December 3, 2011. 6 – Barron’s, September 19, 2011.

Investment Management1 $1.3 trillion total assets under management2

Investment Services1 $26.6 trillion assets under custody and administration

3


Presenter

Presentation Notes

Blaine

• BNY Mellon operates in 36 countries and over 100 markets

• Global Service, Local Delivery – Services delivered around the world – Seamless global network for cross-border speed and convenience – Our experts are located in-market for close collaboration with clients

4

BNY Mellon’s Global Presence

Americas 31,000+ BNY Mellon employees

EMEA 9,000+ BNY Mellon employees

Asia-Pacific 8,000+ BNY Mellon employees

BNY Mellon Locations


Presenter

Presentation Notes

Blaine

BNY Mellon U.S. Infrastructure

Dallas, TX Lockbox

Los Angeles

Chicago, IL Lockbox

Boston, MA Disbursements

Philadelphia, PA Disbursements

Pittsburgh, PA Lockbox, Disbursements, Electronic Services, Data Center

.

Lockbox

New York Trade & Payment Operations, Loan Operations. Disbursements

College Station, TX SourceNet Solutions

Woodland Park, NJ ClearTran B2C solutions

Florida Payments Transfer

Tennessee Data Center


Presenter

Presentation Notes

Blaine

About WAUSAU Key Facts Founded in 1974

Locations: Mosinee, WI (HQ); Lynn, MA; Omaha, NE

Privately Held by Frontenac

Market Leadership • #1 in receivables*

• 3.5 billion+ payments processed annually

• 650+ customer sites

• 50+ Fortune 500 companies

• 8 of top 10 FIs

*Source: TAWPI/Blueflame 2009, TowerGroup 2012


Presenter

Presentation Notes

Sam

• Ability to aggregate all receivables payments, regardless of location or payment method

• Real-time (or near real-time) access • Images for all paper items • Robust search and reporting features • Internet browser access • Workflow enabled • Business rules engines • Consolidated data transmissions

Receivables Hub Definition


Presenter

Presentation Notes

Sam

• Aggregates payments from all sources – Lockbox – Remote Deposit - Checks (paper, image) – ACH (pre-auth debit, WEB, TEL, Home Banking, . . .) – EBPP (settling through ACH or Card) – Wire Transfer (FedWire, CHIPS, SWIFT) – Cards

• Common interface architecture (vs. point-to-point) – Devoid of business line or customer specific logic – Uses a common model that is based on industry standards

(e.g. ISO 20022) – Consistent payment information from all payment channels

Purposes of a Receivables Hub

8


Presenter

Presentation Notes

Blaine

• Provide streamlined remittance details for single (or at least, consistent) A/R feed – Electronic data – Remote Deposit Capture – Paper (keyed & ICR’d) – Cards – EDI translation – EDI re-association

Purposes of a Receivables Hub (cont.)

9


Presenter

Presentation Notes

Blaine

Purposes of a Receivables Hub (cont.)

• Standardized & centralized for all payment locations and types

• Trend analyses Reporting

• Intra-process Decisioning • Consistent research & resolution tools • Workflow functionality – manual & automated • Trend analyses • Evolving payer knowledge • Consistent return item workflow

Exceptions

• Multi-currency • Ability to “learn” and correct common payer issues • Real-time information • Integration with Trade transactions – LC’s & Open

Account

Future possibilities


Presenter

Presentation Notes

Sam

Evolution of Receivables Processing

Checks - Branch Checks –

Remote Deposit

Checks – Lockbox

ACH Pre-Auth

Debits

ACH WEB & TEL

ACH Home Banking

FedWire

Deposit A/R System

A/R Staff

Check & Doc

Images

Deposit Data

Credit & Debit Cards

Exceptions

Merchant Processor

Non-Bank Accounts

Electronic Billing & Payment

Exce

ptio

n D

ecis

ioni

ng

A/R Data

Electronic Billing & Payment


Presenter

Presentation Notes

Sam TWO OPTIONS: OVERLAY (e.g. SunGuard) or REPLACEMENT (e.g. IBM Payments Director) The SEPA Challenge Paul Styles, ACI Worldwide - 15 Mar 2011 As compliance with the single euro payments area (SEPA) looms ever closer, this article considers the challenges and opportunities that SEPA offers for banks and corporates. Progress towards the single euro payments area (SEPA) has been painfully slow. It had originally been hoped that market forces and the perceived benefits of SEPA would be enough to move the end-user to adopt the new SEPA payment instruments. But it became obvious about two years ago that the expected take-off was not going to be achieved, not least because there was no discernible business case in what the corporates saw and were being told about SEPA. Even banks eventually came to the view that legislation, benign or otherwise, was required, and that is now about to happen. The fact remains, however, that the setting of end-dates for the migration from legacy instruments to the SEPA ones should not absolve banks from providing and articulating a sound business case to their corporate customers. At the very least, corporates must be able to see that they are enabled by SEPA to cut their operational costs for payments. The Banks' Response Once the tipping point is achieved such that the corporates' own costs are reduced more than the increase in bank fees from utilizing the new value-added services, then a significant number of corporates will migrate over to SEPA ahead of the looming deadlines, so that they can realize the efficiencies they crave and can avoid the parallel running of legacy and SEPA processes. Those companies that will await the end-dates before making a move will do so with equanimity knowing that cost savings will eventually be delivered. The value-added services that the banks should be looking to offer will improve efficiencies in the corporates’ payment operations by such things as increasing the straight-through processing (STP) rates, eliminating costly manual errors, automating reconciliation, and generally reducing the working capital required. In this latter respect, the cost and general scarcity of liquidity is no longer an issue solely for the banks themselves - a knock-on effect is being appreciated in the corporate space as well, thus requiring enhanced capabilities on the part of the banks and their corporate clients Some examples of the value-added services that banks can develop and offer include the reporting of timely, accurate and full payment information in flexible formats. Ultimately, this level of detail about payments provides corporates with an unprecedented chance to fully understand the status of all their payments at any one time. This can not only aid the cash and liquidity management of the corporate but can also lead to greater automation of processes, which can minimize costs. In addition, banks might also offer comprehensive analysis of payment information. By doing so they can ensure the highest STP rates are being achieved. Clearly, this cuts the need for manual intervention, cutting the risk of errors, improving efficiency and minimizing costs. Offering a 'least cost' routing of payments service is also an option. For those payments that are not time-sensitive, there is no need to expend resources on rushing them through. Again, this can cut costs for corporates. This can be accompanied by efficient processing of non-SEPA cross-border low value payments. The use of the International Payments Framework Association’s ISO 20022-based format can bring SEPA-like efficiencies to other international payments. Finally, banks may consider extending SEPA-based initiatives, such as e-invoicing, to their corporate customers. By doing so, they can bring benefits to other areas of the business.

• Building blocks for your lockbox provider becoming more closely integrated to your A/R system: – Document Imaging – A/R Matching – Long Term Image Archive – Integration Of Field Payments – Decisioning Services – Extending A/R Matching & Decisioning – Integrating Even Further Into A/R

Integral Parts


Presenter

Presentation Notes

Blaine

• "The Standard" For Retail & Wholesale Lockbox

– With A/R transmissions, Remote Deposit Capture, Remote Lockbox and document imaging assists with exception resolution

– Without A/R transmissions, particularly lower volumes, A/R posting can be completed intra-day via images

Document Imaging

RDC and Imaging eliminates the courier costs associated with overnight packages and the internal expense of

imaging and filing of paper remittances.


Presenter

Presentation Notes

Sam and Blaine

• Viewing your Processor/Bank as your “Digital Fiduciary” – Eliminate need for original paper remittances – Transitioning from CD’s to Long Term Online Access

• On-line retention for seven to ten years • Ease of access & search functionality • Reduces the opportunity for privacy theft by eliminating transport of

CD or paper remittances – No longer restricted to paper lockbox items

• Adding images of electronic transactions (ACH & Wire)

Long Term Image Archive


Presenter

Presentation Notes

Blaine

• Remote Deposit Capture – Check image deposits – Payment detail capture

• Automated posting to General Ledger

– Quick Books to SAP

– Multiple payment types • ACH and credit card from same platform

• Mobile eCheck Applications – Point of service deposit

• Improve DSO by 1+ day

Integration Of Field Payments


Presenter

Presentation Notes

Sam

• Repairs within the integrated (RDC and lockbox) operation – Systemic – Manual / keying queues

• Intra-day access by receiver’s A/R or Credit staff to resolve remaining exceptions – Unbalanced multi’s, unresolved check-only’s,

“soft stops” • Extending the strength of lockbox to ACH & Wire

– Reuse existing lockbox receivables business rules for all payment types

Decisioning Services


Presenter

Presentation Notes

Blaine

• Open Invoice File Utilized by Lockbox Processor – Match invoice and payment to open A/R items – Correct invoice numbers that are truncated, etc.

• Applying Rules Engines – Decision short-pays by reason codes – Utilizing pre-determined thresholds – Ability to split & merge prior to transmission file

• Produce clean posting files – XML feeds directly to ERP systems

A/R Matching


Presenter

Presentation Notes

Sam Right-justify & left-justify invoice number with too few digits & perform lookup; replace invoice number if a match identified

• Hard core exceptions! – Short payments for anticipated business needs

• marketing deductions – Short payments for unforeseen events

• damaged goods, carrier disputes, failure to comply with buyer terms of shipment, etc.

• Utilizing workflow – Route items based on reason code, amount, or customer – Automate the approval escalation

• Root cause analysis

Deductions


Presenter

Presentation Notes

Blaine

• History of data & images across systems (RDC, Lockbox etc.) getting better and better

• ACH & Wire payments have been exceptions to this well refined process

• Bringing ACH & Wire into similar consistent processes • Evolving payments & technology will lead the process to

be more timely

Consolidated Data Feed


Presenter

Presentation Notes

Blaine

• Once the data is together, putting it to productive use . . . – Better understanding of current day receipts

• Liquidity management & working capital management – Transform the data into insight for the receiver

• Supply Chain Financing (SCF) • Globalization / Global Payments / Integration with Trade

Analytics & Insight


Presenter

Presentation Notes

Sam

• Investigate level of functionality employed by your Remote Deposit Capture systems and Lockboxes -- Are you taking advantage of: – Full document imaging (including payment transactions &

correspondence)? – Intra-day decisioning (where it makes sense to use)? – Systemic data “manipulation” (where feasible)? – Integration of electronic payment data with paper payment data

(A/R data transmission, reports, and document images)?

Key “Take Away’s” (1 of 2)


Presenter

Presentation Notes

Blaine

• Do you have statistical reports regarding deductions? – Deductions by customer – Most common types of deductions – Ongoing trend – Time to resolve deductions – Average daily unapplied cash

• If you polled your A/R staff, what would be the TOP 3 issues they typically face? What TOP 3 changes do they feel would make their job easier?

Key “Take Away’s” (2 of 2)


Presenter

Presentation Notes

Sam

Questions?

23 Copyright 2012, RemoteDepositCapture.com

About The Presenters Sam Golbach • WAUSAU Financial Systems • [email protected]

Blaine Carnprobst • BNY Mellon • [email protected]


mailto:[email protected]

mailto:[email protected]

Documents

RDC as a Receivables Platform - remotedepositcapture.com · RDC as a Receivables Platform September 28, 2012 Blaine Carnprobst ... Lockbox . Los Angeles Chicago, IL . Lockbox Electronic