You ve Got Money! Achieving Efficiencies in A/R Posting

Transcription

1 You ve Got Money! Achieving Efficiencies in A/R Posting New York Cash Exchange Conference May 31, :00am New York, NY Cathy Burnett, Director of Accounts Receivable MSC Industrial Direct W. Dustin Goldstein, CTP, National Sales Manager U.S. Bank Global Treasury Management

2 Today s Agenda Introduction Market Tales: Challenges to achieving acceptable posting rates Can you choose how you get paid? Solutions! Business rules, data mapping, workflows and exceptions MSC Industrial Direct: History & Business Profile A/R Goals and Challenges MSC s Accounts Receivable Transformation MSC s New Cash Application Process Q&A 2

3 A/R Market Tales: Audience Participation What challenges has your organization faced in achieving acceptable A/R posting rates? What are the average straight-through posting rates for your organization? 3

4 Survey says Receivables pain points Source: Aite: Integrated Receivables: Solving for Multiple Business Payments Variables - December

5 Do you know where you want to go? Are you familiar with the payment options? Are you innovating strategies to help improve working capital? Is your view of your receivables processes holistic? 5

6 You don t choose how you get paid Numerous posting files Manual cash application Differing file formats Varying transmission schedules Increased DSO 6

7 A jumble of information Lockbox Wire E-Lbx ACH 7

8 Checks continue to decline Source: 2016 AFP Electronic Payments Survey 8

9 Migration to electronic options Source: 2016 AFP Electronic Payments Survey 9

10 Goals to optimize Accounts Receivable Improve customer relations Reduce DSO Improve efficiency Help achieve organizational goals 10

11 Integrated Receivables Solution Reporting Normalized data Business rules Posting file Data enrichment Workflow queues Exception management 11

12 Expedited cash application process Workflow Payment data Normalization parsing business rules Posting file Client A/R Bank Portal Auto-match User match Exceptions Complete or fax Remittance keying Work queues Remittance queue User interaction Your user workstation 12

13 Additional challenges to best in class posting Short paid invoices Freight and tax variables Government agencies Disparate internal technologies Missing remittance data Non-standard payments 13

14 The MSC Industrial Direct story 14

15 MSC Industrial Direct (NYSE: MSM) Founded by Sidney Jacobson in 1941, headquartered in Melville, NY Currently one of the largest industrial equipment distributors in the world Famous for publishing The Big Book, a catalog totaling over 3,000 pages detailing the company s products, which currently number over 1 million Fiscal year 2016 financials: Revenue: $2.863 billion Net Income: $231 million Customer base ranges from small single location shops to large industrial companies and governments. 15

16 Accounts Receivable challenges at MSC Diverse customer base Small $, large volume invoices ACH absent remittance Delayed posting process Dated legacy system Multiple bank relationships Provider investment halted 16

17 Accounts Receivable Transformation at MSC >80% posting rate Long-term system Aspirational Goals Automated ACH reassociation SAP compatible Flexible with solid service Enhanced lockbox 17

18 Accounts Receivable Transformation at MSC Provider Selection Process 18

19 System Implementation at MSC Custom business rules with extensive UAT Built for AS/400 then live on SAP Extensive valuable feedback provided to bank development Customers migrated to electronic upon migration Bank or MSC SSC works transactions and exceptions Just over two months to implement! 19

20 New Cash Application process at MSC - Checks - ACH - Wires All incoming payments to single bank receivables platform 20

21 New Cash Application Process at MSC Where remittance advice doesn t match payment, it stops and gets placed in exception queue Matching transactions are sent straightthrough to posting file Business Rules Work Exceptions Cash application specialists work exceptions & reconciliations Re-work (eliminated by SAP) Production File Balancing queues Once exception file is fixed, it is loaded with actual deposited date (even though exception is complete several days later) Dashboard tells how much money is still sitting in exception process. 21

22 Lessons learned at MSC ERP conversion Conversion communication to clients Extended time frames Significant paper-to-electronic adoption ACH re-association process Auto-posting increase Process efficiency Compelling savings and ROI Strong bank partnership Valuable feature / functionality input 22

23 Thank you! Cathy Burnett MSC Industrial Direct Dustin Goldstein U.S. Bank CAT # (4/17) 23