Project Description

Two men discussing

Every day brings new innovations to treasury management. One of the newest (and most favorable) is the combination of artificial intelligence (AI) and accounts receivable (AR).

Together, this pair can streamline electronic payment posting, dramatically reduce exceptions, and help corporations tame the manual work associated with today’s growing volumes of electronic payment methods. It’s a team so powerful it even has a name: integrated receivables.

Electronic payments add complexity for AR

Integrated receivables solutions apply cutting-edge technology to tackle one of AR’s most vexing problems. While electronic payments may arrive in a company’s bank account automatically, figuring out how to apply those funds to open invoices remains a time-consuming and largely manual process.

The challenges are numerous and include:

  • Remittance information that arrives separately from electronic payments.
  • Electronic deposits that occur days before or after remittance information arrives.
  • Electronic payments that lack any remittance information.
  • Consolidated payments that cover multiple open invoices.
  • Remittance data “trapped” in formats difficult to import to AR systems.

As a result, AR staff spend numerous hours playing detective and digging for information across emails, PDFs, spreadsheets, and portals. Once they locate remittance data, there’s more work involved: rekeying data into company systems, then attempting to re-associate electronic payments with open invoices. In many cases, working with electronic payments exceeds the time needed to apply traditional paper check receivables.

These lengthy posting cycles impede Days Sales Outstanding (DSO). They can snowball into customer service delays related to credit availability, and hamper visibility to cash flow for company stakeholders.

Analysts estimate that manually re-associating payments and remittance information is a major factor in the more than $100 billion that U.S. businesses spend annually on AR processes.1

Modern technology can match over 90 percent of payments

Combining AI and AR pairs the power of technology with the problems of electronic payments and remittances. It’s a match that can generate straight-through processing rates of 90 percent or greater, according to solution providers.2

These technologies form the core of integrated receivables applications:

  • Optical character recognition (OCR), which can “read” documents like PDFs and extract relevant information.
  • Artificial intelligence and machine learning, which use robust algorithms to process vast amounts of data in accelerated timeframes. The technology is also structured to become smarter over time as it “learns” from user inputs and growing volumes of data.
  • Robotic process automation (RPA), which uses smart software to handle repetitive processes like retrieving payment information from online portals, eliminating countless hours of legwork for AR staff.

Together, these tools match electronic payments with correct remittance information, then with open invoices in the company’s AR file. They can analyze thousands of invoice line items in just seconds. Any remaining exceptions—generally less than 10 percent—are presented to AR staff for simple point-and-click decisioning.3 Some solutions can even consider the impact of discounts and deductions when identifying potential matches.

The potential benefits of this automation can be significant:

  • Increased efficiency
  • Greater accuracy
  • Reduced DSO
  • Stronger customer service
  • Improved working capital

Integrated receivables helps takes efficiency, automation, and speed to a new level. AR and business customers have much to appreciate in this exciting application of technology.

For more information, contact your Wells Fargo treasury management representative or fill out the Contact Us form on this site.

1. “Modernizing electronic payments with artificial intelligence and integrated receivables,” Institute of Finance and Management, 2019.
2. “Modernizing electronic payments with artificial intelligence and integrated receivables,” Institute of Finance and Management, 2019.
3. “Modernizing electronic payments with artificial intelligence and integrated receivables,” Institute of Finance and Management, 2019.