Straight-through reconciliation is but a dream for most Accounts Receivables departments. However, new technologies are bringing some hope in Asia-Pacific.
RBS in Asia-Pacific has been offering reference accounts in its receivables solution, Smart CollectTM, since early 2011. Smart Collect is an integrated receivables solution available in 10 countries in Asia-Pacific designed to accelerate collections, release working capital and increase cost savings by ensuring the straight-through reconciliation of outstanding receivables, as shown in Figure below. Simple and accurate reconciliation is achieved by using reference accounts for all payer payments regardless of payment type. The beneficiary can choose whether the reference account is allocated per client or per invoice or can adopt their own internal identification system.
A large educational institution in Asia-Pacific was able to reconcile the collection of student fees by using student registration numbers as reference accounts. Clients can also route cash deposits and cheque payments to a chosen reference account using Smart Collect. Funds are credited to the main operating account with each payment having a guaranteed unique payer or invoice identifier. This ensures straight through reconciliation for the beneficiary and eliminates dependency on the payer or payer bank for information. An RBS executive in RBS’s Global Transaction Services commented that, “Smart Collect has been successful because of the flexibility and automated reconciliation for business-to-consumer and business-to-business collections, which improve the working capital liquidity for companies."
Smart Collect - Integrated Receivables Solution
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IATA fee collection
The International Air Transport Association’s (IATA) collection of fees from its customers across Asia Pacific using RBS’s SmartCollect solution, which will provide a virtual account for each travel agent in the region enabling IATA to centralise its operating cash functions into Singapore. It has also enabled IATA to centralise its cash functions for the entire region and as part of this collect fees from IATA-accredited travel agents from across the region. The new software and connectivity will aid this process and help to identify and reconcile each transaction coming into Singapore.
RBS’ virtual account module feature in the SmartCollect product suite is intended to help corporates, such as IATA, to improve their local and cross-border reconciliation results. The ‘virtual account’ solution provides users with a way to induce internal cash flow without credit implications to their customers; making it possible to realise their cash-to-conversion process in faster manner.
Virtual accounts are playing a vital role in improving cash management and collections efficiency, e.g. in SmartCollect, virtual cards going global, etc., etc. What part of your payments, collections and cash management could benefit from using virtual accounts?
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