Banks are carefully and selectively combining with key fintechs to enhance their core services. The latest example is BofA Merrill’s partnership with HighRadius to provide a new ‘Intelligent Receivables’ platform that that uses artificial intelligence (AI) and other software to help companies vastly improve their straight-through reconciliation (STR) of incoming payments to help them post their receivables faster.
Overcoming core problems
Matching incoming payments with invoices has long been a frustration for companies. Many valuable hours are spent trying to determine who's paying for what. Intelligent Receivables is designed for large or complex companies that are seeking to reduce costs, decrease days-sales-outstanding (DSO), and improve cash forecasting and their end-customer experience. The new solution is designed for companies that manage a large volume of payments where the remittance information is either missing or received separately from the payment.
Incomplete remittance information typically leads to an arduous and costly reconciliation process, explained Rodney Gardner, head of Global Receivables in Global Transaction Services at Bank of America Merrill Lynch. "Our solution brings together AI, machine learning and optical character recognition (OCR), setting a new bar in accounts receivable reconciliation and payment matching,"
Intelligent Receivables, which is powered by HighRadius, a fintech enterprise software-as-a-service (SaaS) company, achieves improved straight-through reconciliation through 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.
BofAML Intelligent Receivables®
Source & Copyright©2017 - Bank of America Merrill Lynch
The platform provides additional functionality to help companies improve STR, for example:
- In cases where an invoice cannot be automatically matched, an exception portal allows the receivables staff to upload supporting data or make other adjustments to enable matching.
- A client can set up automatically generated emails to payers, asking them to identify which invoices they wish to pay.
- The solution’s dashboard reporting can assist in cash forecasting and help clients better understand payer behavior.
The platform brings together Data Aggregation, Data Correction and AR Matching processes supported by HighRadius’s ‘clever AI functions’ to:
- improve document and payment matching, so freeing up A/R staff for other tasks
- Reduce DSO rates
- Reduce write offs and return of funds that could not be identified
- Improve customer relations in many ways, e.g. minimising the calls to customers saying “You haven’t paid” when actually they had, it was just part of another payment.
The overall impact of Intelligent Receivables plaform is to reduce manual intervention in the A/R process through better matching and data capture. Importantly it can be integrated with other cash management processes, as Maria Mandler, managing director in Global Receivables, Global Transaction Services, Bank of America Merrill Lynch, points out, “Intelligent Receivables is an innovative financial tool, which not only enhances Straight Through Reconciliation of receivables, but, when paired with Virtual Accounts and Foreign Exchange rate protection, it can solve additional Receivables challenges. These include enhancing Receivables on behalf of structures, and enabling local currency invoicing.”
Intelligent Receivables is currently available in the United States and Canada. It will become available in other countries and regions later this year.
CTMfile take: In A/R, it is all coming together: Intelligent Receivables is a fine example of how banks are integrating specialist services from fintechs with their basic services (nothing is more basic than A/R), and then further integrating this solution with other services
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