The shift to electronic payments and ACH has created some interesting implications for cash application teams. While it seems that electronic payments should be easier and faster to process than paper checks, the ways of providing the corresponding remittance, including via email, have had a negative impact on accounts receivable. Now, cash application teams have to find new ways to process these ePayments.
When it comes to achieving 100% automation of incoming electronic payments, system are needed to connect the deposit (in the bank) with the remittance (in an email) with the A/R system (in the Accounting System). Consider next that NACHA has reported that by 2020, 66% of payments will be made electronically, therefore, manually keying information is not a viable long-term solution.
OCR Versus Artificial Intelligence Solutions
The reality is that each remittance email has all of the information. It is common for teams seeking automation to leverage Optimal Character Recognition (OCR) technology, a low-level automation tool. Using OCR, remittances are printed, then scanned via OCR. This lengthy and manual process expands the use of paper which defeats the purpose of automation. More paper also increases the cost of the cash application process.
To cut paper and cost another solution could be to re-purpose an OCR template based-solution to build templates for each remittance format. The concern is that you are now manually creating OCR templates to capture the desired remittance information. While this does eliminate printing remittance emails, you still find yourself adding developing templates and creating new tasks...neither of which is payment automation. Also OCR has limitations due to scan quality and formatting discrepancies that result in lower accuracy than desired.
The latest technologies, and most accurate, leverage the use of Artificial Intelligence and Machine Learning to automate the process without requiring a new system huge transformation up front. Using A.I. the details provided in the body of the email as well as any attachments can eliminate manual keying of data or use of OCR and achieve optimal automation accuracy rates. Errors due to scan quality and paper formatting are innately avoided, automation accuracy will reach optimal levels of nearly 100% .
An A.I. and machine learning platform can reduce cash to application to the shortest possible time. Your cash application team should not spend time retrieving customer email remittance, opening and fumbling to find the information needed, saving considerable time and money.
Seek a system that has a free, no risk trial and a tiered payment structure to ensure your maximum benefit with least risk. For more information on Accounts Receivable Automation from OnPay Solutions, please watch our short educational video about the "A/R Lockbox"
For more information on Accounts Receivable Automation, see these related blog posts:
- 3 Accounts Receivable Realities
- Accounts Receivable Automation from a SaaS Company
- How Does an Old Bicycle Shop Correlate with Accounts Receivable Automation?
- Futuristic B2B Payments: Virtual Cards, ACH, and Accounts Receivable Challenges
- Accounts Receivable - Two Reasons Why You Should Be Cash Greedy
Learn more about automated accounts receivable with OnPay Solutions!