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Receivables and payables automation: From whom? and For what?

The essential problems in bulk accounts receivables haven’t changed: 1) identifying from whom the payment is from and 2) for what? Are being tackled in many different ways.

CitiPayer ID service expands global coverage

Citi’s Treasury and Trade Solutions has expanded its Citi Payer ID offering to 17 new markets across North America and Western Europe, making it now available in 44 countries. Companies today face multiple challenges in their collection processes when reconciling payments or when collecting funds across geographies. 

Citi Payer ID allows companies to assign unique account numbers to their payers for incoming receivables. The account numbers, which provide visibility into the source of payment, are then used to match the payment with the payer, making the collection process more streamlined and efficient. 

Alibaba Group uses Citi Payer ID to achieve scale, deliver operational efficiency and reduce costs all without changing their client’s processes. Alibaba explains:

  • “Traditionally, we would manually reconcile transactions, a process that created significant delays in distributing funds to sellers in mainland China. After exploring and evaluating different products in the industry, we chose Citi’s Payer ID solution, which enables us to assign each buyer a unique payer ID number that is linked to Alibaba’s master account. 
  • As a result, our systems can now automatically match payments with data that we have on the transaction, allowing us to fully automate this process. Citi’s coverage in over 40 countries was another key factor in our decision, as it supports Alibaba’s ambitions to rapidly offer our services worldwide,” said Griffin Peng, Director of B2B payment and financing at Alibaba.

This what the global e-commerce platforms are looking for: global coverage combined with efficient processes.

Solving the “Who from” problem

Virtual accounts are used to assign a unique account number to a client, and then the client uses its ERP system to generate individual account numbers for all of its payers. The client then shares the list of generated virtual account numbers with bank for identification purposes. When the payer receives an invoice, he initiates payment to the virtual account number cited on the invoice. |When the bank receives the payment it matches the virtual account number to the client’s real account number in a fully automated process. The bank then credits the client’s real account number with the payment.

Many banks and fintechs operate a version of this system, e.g. RBS’s Smart Collect, see, which has been available since 2011.

What for

But solving the “who from problem” or “who to” is only half of the solution, corporates need to identify what the payment is for. This is where the Artificial Intelligence technology is beginning to dominate:

  • BofA Merrill have just launched Intelligent Receivables (with fintech HighRadius) that achieves improved straight-through reconciliation through using artificial intelligence in four steps:
    • Identifies payers and associates their payments to remittances that are received separately
    • Extracts remittance data from emails, email attachments, electronic data interchange (EDI) and payer web portals
    • Matches payments to open receivables using the enriched remittance data
    • Creates a receivables posting file that the client uploads to their ERP system.
  • Previse - use an algorithmic approach to invoice payment - so that large buyers can be sure exactly what the payment is for.

CTMfile take: Virtual accounts and AI are the route to efficiency in receivables and payables.


This item appears in the following sections:
Payments - Bill Collection
Accounts Receivable Management
Regular Bill Payments from Businesses
Regular Bill Payments from Consumers
Payments - Making
Accounts Payable Management

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