Emerging from the Dark Ages

Transcription

1 Emerging from the Dark Ages How to slay the B2B paper check dragon Greg Rettinger, Vice President, AAP U.S. Bank Global Treasury Management Dave Wohlberg Finance Manager Educational Credit Management Corporation (ECMC) October 4-5, 2017

2 Agenda Payment market trends Educational Credit Management Corporation (ECMC) Best practices and what you can do right now Final thoughts and Q & A 2017 U.S. Bank. CR (9/17) 2

3 The way to get started is to quit talking and begin doing. Walt Disney

4 Payment Market Trends

5 Change in number of non-cash payments from (in billions of transactions) Credit Cards Debit Cards ACH Check Growth continues in cards and ACH, check usage continues to decline Source: The Federal Reserves Payments Study

6 Change in value of non-cash payments from (in trillions of dollars) Credit Cards Debit Cards ACH Check Significant growth in the dollar value of ACH payments compared to card and checks Checks continue to decline in both number and value over the last ten years Source: The Federal Reserves Payments Study

7 Payment trends Change in payment type 2015 to 2016 Increased Stayed the same Decreased 73% 74% 73% 53% 41% 5% 23% 18% 8% 24% 3% 6% Checks Wires ACH P-Card 73% of those surveyed say they re using ACH more often A similar percent say they re writing fewer checks Source: 2016 Electronic Payments Survey, Association for Financial Professionals 7

8 Corporate payment trends Payments made by check in a typical organization 81% 74% 67% 50% 51% Source: 2016 Electronic Payments Survey, Association for Financial Professionals 8

9 Corporate payment trends Likely check-to-electronic conversions for major suppliers in 3 years 13% 12% 34% Very Likely Somewhat likely Not at all likely 41% Majority is already electronic Source: 2016 Electronic Payments Survey, Association for Financial Professionals 9

10 How are companies using Same Day ACH? Types of Same Day ACH Transactions 32% 14% 2% 52% Direct Deposit B2B Payments P2P Payments Consumer Bill Payments Source: NACHA 10

11 Educational Credit Management Corporation 11

12 The first step in getting somewhere is deciding that you are not going to stay where you are. Author unknown linkedin.com 12

13 About ECMC Group ECMC Group is a nonprofit corporation with a mission to help students succeed. All companies in the ECMC Group family work together to fulfill this mission through product and service support and by funding its philanthropic activities through ECMC Foundation. 13

14 Current situation Lead Payment Processing Department for ECMC Student loan guarantor 15-member staff Receive and process 2,000+ paper checks per day 90% businesses 10% consumers Goal Convert manual payments to ACH A LOT of paper checks! 14

15 Before jumping in Gain support Upper management Other departments Design/implement new processes Created new address for remittance information/ach communications Created folders by payer (ACH forms, contacts) Train/assign staff to manage ACH processes Payment authorization and change process Identified low-hanging fruit ACH notices with checks 15

16 Benefits and challenges Benefits Faster receipt of funds More secure Takes mail room/post office out of the picture (for both sender and receiver) Reduces lost checks and associated tasks Unclaimed property Challenges Staff resistance You want to eliminate our jobs! Inadequate backup Limited resources Solving the mystery 16

17 Best Practices 17

18 Idea to action A few months 1+ Year Persistence pays! Idea ACH Process ACH in Action 18

19 Ready to face the dragon? 19

20 Electronic payments questions to ask What areas of A/P and A/R are working for you today? Are there areas you want to change versus must change? What are your pain points? Are there areas you d like to improve? Improve processing efficiency Introduce cost savings Enhance security Maximize payor convenience and flexibility Convert from paper check to less costly electronic payments Outsource Check Printing and mailing functions Payment remittance 20

21 Ready for battle! Considerations for getting started Map out current payable and receivable processes Consult with banking and technology partners Review IT resources Determine desired automation level Consult with trading partners Determine interest and effort required Obtain senior manager buy-in Drive adoption 21

22 Map out payables and receivables process Pull together the subject matter experts and impacted parties Designate specific time with key participants and eliminate distractions (no cell phones or multi-tasking) Dedicate time to go through every detail from beginning to end 22

23 Consult banking and technology partners Understand system touch-points Where you need to evaluate functionality and specify requirements Work with your banking partners to map out your process Collaborate on solutions developed from your mapping process Determine priority items and establish a timeline for completion 23

24 Drive adoption Suppliers are key to a successful program This addresses the top two barriers to electronic payment adoption Create a value proposition for suppliers to accept Share your story throughout the organization Cultivate support in A/P and A/R Utilize tools and resources available from industry associations NACHA resources available at no charge on designed to encourage Direct Deposit and Direct Debit Obtain a copy of the ACH rules and operating guidelines and ensure your policies and procedures are compliant: 24

25 Obtain senior manager support Review the business case with senior management Have specific goals for payment conversion, What gets tracked gets done Verify alignment with the overall vision for the organization 25

26 Questions and Discussion 26

27 Thank you! Greg Rettinger, Vice President Global Treasury Management, U.S. Bank Dave Wohlberg Finance Manager Educational Credit Management Corporation (ECMC)