The Payments Solution: Straight Through Processing
Written by: Kurt Matis
Part 2 of the 3-part True Straight Through Blog Series
To sum up the payments problem: Clients are using multiple payment types (check, ACH, credit card) to cater to customers, and they’re using multiple technologies from different third-party vendors (check scanning, auto-ACH, web, mobile) to streamline receivables. The resulting mash-up of different systems and legacy software results in increased complexity, inefficiencies with separate file integrations, reporting, reconciliation points, and costs for maintenance, training, and support. The payments industry has siloed what it wanted to streamline.
So what’s the solution? We believe it’s true straight through processing, on a single platform for all payment activity and reporting, and a single point of interface to back-office systems.
It’s where the market is heading, but it’s not as widespread as you may think. Many companies say they have an integrated receivables platform to tackle this issue—but when you pull back the veil, these systems aren’t truly integrated. They’re just a couple of platforms cobbled together. Each focusing on their piece of the puzzle and leaving the customer to handle integrations with their back office systems and many times creating new, manual processes associated with each new platform.
Companies need ISVs and software providers to step up and provide solutions that can handle any payment type (check, ACH, Credit Card) from any payment channel (mailed-in, walked-in, called-in, web, mobile), and automatically process it to the bank, the Credit Card gateway, and the back-office/accounting system—a.k.a. straight through processing. That way, companies can add new payment channels quickly and cost effectively, without requiring extensive IT work or training on new systems. It’s a seamless way to add new payment types or payment channels without changing the user experience or month-end procedures.
We’re not talking about earth-shattering change here, either. We’ve done it. We wanted to become more than a vendor for our customers—we wanted to become a partner. So we’ve delivered a value-added SaaS solution that manages all payment methods and channels from a single platform and user interface.
Start With Current Payment Needs
One of our corporate clients is a food distributor with whom we started working with when they decided to put a white-labeled online payment portal in place to facilitate self-service payments for their customers. Since the inclusion of invoices was a must for this client (and many others within the B2B space) electronic bill presentment and payment (EBPP) was also included within the online payment portal. Our client’s customers were given the ability to pay via ACH or Credit Card and apply payments to the appropriate outstanding invoice(s). In order to further streamline their existing receivables processes, and facilitate straight through processing, we integrated directly into their well-known back office accounting system to automate the posting of payments and give them enhanced receivables oversight on a single platform.
Very shortly after rolling out their online payment portal, our client quickly analyzed additional receivables process that could be centralized on their new receivables platform and made the decision to move their current check scanning processes to the platform as well. The distributor implemented enhanced remote deposit capture (RDC) functionality to centralize all check remittance processing at the company’s corporate headquarters on the same platform that they were already leveraging for online payments. Following a successful deployment, the distributor expanded check scanning to its remote office locations across seven regions spanning four states.
Moving into Mobile
Changing their receivables paradigm, the distribution company recognized early on the power that mobile payments could bring to their representatives in the field. Over 300 of the distributor’s field representatives now use a white-labeled version of the ETran Mobile receivables processing application. The application allows reps to quickly and securely accept check payments via mobile remote deposit capture (mRDC) and easily associate payments with outstanding invoice(s) via mobile invoice presentment within the application. Within 90 days of launching the application, the distributor’s monthly transaction volume via the mobile channel increased to over 20% of all check remittances and 11% of total payments.
The distributor’s recent successful company-wide rollout of a mobile payment application within its field-based receivables processes is reducing costs and streamlining processes, transforming their everyday efficiencies, customer experiences and business oversight.
As a result, this client has significantly decreased days sales outstanding (DSO), reduced manual operations and increased cash flow across their enterprise. Perhaps most importantly, they’re well positioned for the changing payments landscape of the future, in which it’s very likely we’ll continue see check usage fade away, to be replaced by more nimble technologies and payment channels.
By centralizing all payment methods and channels on a single platform, the client was able to streamline receivables processes and gain better oversight into their day-to-day remittance processing across the entire enterprise. But positioning your company for payments success isn’t necessarily an “all or nothing” proposition.
You Don’t Have to Go It Alone
The flexibility of cloud-based solutions are allowing payment technology providers to bring innovative solutions to market, and companies to rethink existing remittance processes at an accelerated rate. When it comes to your receivables processes, the best place to start is the place where you believe an immediate impact can be made. Perhaps it’s check processing, maybe it’s adding online payment capabilities for your customers – whatever the case, be sure to work with a provider that can deliver a solution and platform that not only accommodates your most pressing challenge, but can also deliver on the strategic vision of straight through processing, or the ability to accept, process, post and reconcile all payments in an automated fashion (based on your unique business rules) from a single platform.
Here’s the bottom line: It’s time for a change, and to end traditional payment solution siloing. For the good of our customers, our industry needs to start offering truly integrated solutions that make customers’ lives easier, not harder.
In the final post of this series, we’ll lay out a list of the top benefits that both you and your customers stand to realize from integrated receivables and straight through processing.
Ready to Add Mobile Payments to Your Receivables Mix?
Our Mobile Payments eBook will help guide you as you begin the process to research and implement mobile payments for your organization. Nearly every company will be impacted by mobile payments. Are you ready?