Automated Remittance Processing: A Checklist of Critical Issues

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This article originally appeared in Credit Today, the leading publication for the credit professional.
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Remittance processing and applying customer payments in a timely and accurate manner is a key part of the order-to-cash process -- and a great place to cut costs and improve your credit department's productivity.

As detailed in Credit Today’s Technology Buyer’s Guide, Version 3.0 on Remittance Processing, applying customer payments in a timely and accurate manner is a key part of the order-to-cash process — and a great place to cut costs and improve your credit department’s productivity.

If you key payments manually into an A/R software module, cash posting can take considerable time. In addition, due to a lack of information, some payments will be posted on account pending further research (or otherwise tagged to a suspense account or flagged for follow-up). Automated remittance processing systems will greatly reduce the time and labor required to post customer payments and also increase the number of postings that are cleared on the first pass.

First up, let’s consider what you should know to do a thorough upgrade of your remittance processing. Here’s a checklist of critical issues:


Remittance checklist by Credit Today

While EDI has been around for quite some time without fully delivering on its promise, primarily due to the complexities inherent in establishing each individual trading relationship, electronic payments are nonetheless growing rapidly. The use of ACH for commercial transactions is growing while the use of paper checks is declining (See “Credit Today Benchmarking Survey: The Latest Data on Cash Application & Remittance Processing“). Moreover, with the enactment of Check 21 legislation, allowing images of paper checks to be used as a substitute check in the clearing process, this trend will undoubtedly accelerate.

Even so, there remain ample opportunities to implement auto-cash solutions, which are usually associated with bank lockbox operations processing paper checks, to address the inefficiencies of manual remittance processing. Until trading partners are able to move to an entirely electronic payment and remittance processing system, the software used to process transactions must be able to address the multitude of exceptions that arise in conjunction with B2B transactions.

This again is the lesson learned with EDI. It is possible to build a system that works with a customer and a vendor, but chances are the vendor can’t fully migrate that system to another customer because of the nuances of their trading relationship and their own internal systems.

The beauty of auto-cash is that it teaches us how to handle high payment volumes from lots of customers. This knowledge will be extremely useful as companies add more electronic trading partners. Emerging advances in technology such as the use of XML data tags are providing the flexible structure necessary to easily build data bridges between trading partners. As remittance processing technologies improve, so will your ability to process transactions quickly.


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President’s Blog: How do CMA members leverage technology?, by Mike Mitchell

CMA President and CEO Mike Mitchell
CMA President and CEO Mike Mitchell

CMA is proud to host the CreditScape Spring Summit 2016 next week in Newport Beach, with a significant focus on how technology can be leveraged to improve the efficiency and effectiveness of credit operations. Regardless of whether you are attending the event, we’d like to get a baseline for how much automation is being utilized across our member base today.

Click here for a short survey that will ask you about your challenges, where you are with automation and where you’d like to be. We’ve also got several questions about the time spent and value of some of the most common activities in the credit department. By helping us to better understand your challenges regarding automation and technology, we’ll be better able to craft conferences, webinars and presentations, and even alliances with technology providers, throughout the year that help support your goals.

We’ll be asking these same questions on a periodic basis to see how quickly our membership is adopting technology. We’ll also want to understand how else we can support your needs in this area and how well our efforts result in concrete improvements and reduction of manual labor at the member level.

The results of this survey are only available to CreditScape attendees and those who complete it – so please take a few minutes to tell us about your process. We’ll discuss the results at CreditScape next week!

Here is a link to the survey.

See you in Newport Beach!

Mike Mitchell

Easy-to-Implement Technology That Can Make a Credit Manager’s Job Easier, by Michelle Herman

Yesterday I mentioned that I’d be listing several technologies I use that make my job easier. These are all things that I don’t have to call the I.T. department to install for me. These tech tools are easy to learn, easy to use, super helpful in the credit and collection department, make you look good, and best of all, are FREE!

Free Conference Call/Webinar/Video Chat tool
Free Conference
Yes – it really is free! You get assigned a phone number and code that is static and is yours to use whenever you need to have a conference call. You can even do free webinars (and record them) with all the standard tools that pricey tools like WebEx offer. Now they even offer video chat!

Free Online Large File Management Tool
Large files are often rejected, or never make it out of your own server. Dropbox solves this issue by allowing you to convert any document into a link that is easily shared and can be password protected. You can store or send pictures, PowerPoint’s, excel files, etc. This product comes with a basic level of storage than can be incrementally increased through a variety of actions.
eMagia Software
Another great new product from our friends at Emagia that provides you with an online credit application that you customize – for FREE! You re-create your credit app online, no tech support from your company necessary. You can export data into excel or your ERP, it is integrated with credit sources like the NACM National Trade Credit Report and even Yahoo financials.

Low-to-No-Cost Productivity Tools
Your Nerdy Best Friend
If you missed seeing Beth Ziesenis, known as “Your Nerdy Best Friend,” at last year’s Western Region conference in Portland, you don’t want to miss seeing her at Credit Congress. Visit her site to get comprehensive reviews on super productivity tools that touch virtually every area of your department. You are sure to find something that will change your life – personally and professionally.

Multi-Bureau anscersX Commercial Credit Report
Ok, this one isn’t really free, but it is one of the easiest and most cost effective ways to get data from the leading commercial credit bureaus all in one place. The AnscersX report provided by CMA, gives you the greatest hits from D&B, Experian and Equifax all in one easy to read report. No contracts, no minimums, no hassle.

Use anyone of these tools and you’ve got some instant sizzle. You instantly up your professionalism and your image. All of these tools have impressive graphical reporting features to help you share the results with your boss, making you and your team, look great. The key is to take one step at a time, start with simple low- or no-cost options for some of the most basic productivity tools, and generate some good looking reports that tell a story. Just pick one and sign up. Didn’t see one that floats your boat? There are hundreds of these types of tools, and just starting with one and seeing immediate real success – the sizzle- is what you need to keep going. Track me down at CreditScape and I’ll give you a live demo of how easy these tools are and how they may your life easier and make you look sharp.

Ok, we get it. You’re busy, overworked, underpaid. And probably under-valued. If that is your reality, and your perception, it’s time to take action to change it. We know it is hard to get out of the office, but if you’re not viewed by management as you’d really like to be, take the time, learn a few new tricks. Generate some sizzle. See you at CreditScape!

This is just a surface view of one of the topics that will be discussed in detail at the upcoming CreditScape Summit and Annual Meeting in Newport Beach, CA on March 24-25, 2016. Come to CreditScape, learn from experts and peers who have done this, share you own experiences with others. For more information, visit

Michelle Herman is a business development manager at NACM. She will also be moderating several of the panel discussions and workshops at CreditScape.

Read the other posts in this series here:

Why is it So Difficult to Implement New Technology Solutions in the Credit Department, by Michelle Herman

Why is it that credit, especially commercial credit, always seems to get the short end of the stick when it comes to resources? Why does it seem just the opposite for sales and marketing? Why do they always get the newest equipment, the coolest gadgets, the fancy business cards, even the latest version of Microsoft office before you? Why? It’s because those folks are externally facing representatives of your company and your company already knows the value of their efforts. Huge marketing campaigns cost huge dollars and are visible inside and outside of the company. Huge sales get noticed and celebrated – and commissioned. These teams may annoy the heck out of you, but they have a few things figured out: get noticed = be valued. They are constantly throwing out the sizzle – and people notice sizzle, all the time.

So why can’t credit sizzle? Why are we always in the back room? Why are our requests and projects always “on the list”? Why doesn’t anyone else get excited that your 90+ bucket just dropped below x percent? At this point, my only conclusion is this: Perception really is reality. If you have everything you need in your department, you can save ten minutes and stop reading this now. If you are still struggling to get basic tools and funding for training and attending conferences, read on.

For every person in your company who has nothing to do with (or knows nothing about) credit or collections, their PERCEPTION about what you and your team do or don’t do, their stereotypes, biases, and assumptions, really is their REALITY. How you and your team are perceived, almost more than how you actually perform, is how you are valued, whether you like it or not. And they will support you only to the extent that they think you are valuable.

We all know, none of us ever planned to get here, it just happened. Many never even heard of commercial credit until we were suddenly knee deep in it. Clearly, as an industry and a profession, we’ve got some work to do, but we’ll save that for another day. The point is, no one really knows what you do, and it is your job to educate them, to prove your value – but take some notes from those flashy sales folks, sometimes you need a little sizzle to do it!

So how do you sizzle? How do you prove your value? How do you get a seat at the table? How do you get to be seen as a strategic player, not just an administrative cost center? How do you really change their perception? You must start by changing your reality, and you can do it starting today, through technology, without spending a dime.

If you are still reading, I’m going to assume that you’d like to improve a few things. Many in our industry have been around a long time, and have heard “no” so often, that they just stop asking, and they stop learning. I’m still amazed at what isn’t being implemented in our member’s offices and even in our own NACM offices, because we haven’t taken time to find out what’s out there. We did a short survey at one of the regional conferences about why technology isn’t adopted more often.
Reason Number 1: No Time. No one takes the time to investigate the technology, because they have no time. They have no time, because they have no technology. It is a vicious and evil cycle. Result: no sizzle, no value, no tools.

Reason Number 2: No Budget. This really shouldn’t be an excuse anymore as so many services are offering their basic tool for free, only charging if you want to upgrade. It is a great business model that lets folks like us actually explore things, test it out, kick the tires – before we commit, or spend a dime. And they are all web-based – nothing to install, no tech involvement needed, just go to a website and register.

Tomorrow, I’ll list a few of my favorite tech tools that are easy to learn, easy to use, super helpful in the credit and collection department, make you look good, and best of all, are FREE!

This is just a surface view of one of the topics that will be discussed in detail at the upcoming CreditScape Summit and Annual Meeting in Newport Beach, CA on March 24-25, 2016. Come to CreditScape, learn from experts and peers who have done this, share you own experiences with others. For more information, visit

Michelle Herman is a business development manager at NACM. She will also be moderating several of the panel discussions and workshops at CreditScape.

Read the other posts in this series here:

Suppliers Accepting Credit Card-Present Payments Take Heed To Adopt New Technology By October 1, 2015 Or Bear Risk Of Fraud Loss, By Scott Blakeley

The Wall Street Journal reports that credit card use in the B2B space continues to increase as a preferred payment channel for customers. Suppliers accepting cards in the B2B space commonly receive payment through card not present forms, whether through payment portal, email, fax or over the phone. For those suppliers that accept cards in the cardholder’s presence, card issuers are changing card acceptance rules to give cardholders greater protections from identity theft.

“Chip and pin” or “smart cards” are credit or debit cards that store data on integrated circuits rather than on traditional magnetic stripes. The transition to “chip and pin” or “smart card” technology is now largely underway in the United States. The transition is being assisted by the shift in liability for card-present fraud that will be implemented on October 1, 2015.

Currently, if an in-store transaction is conducted using a card obtained fraudulently, cardholder losses from that transaction lie with the payment processor or issuing bank. From October onwards, that liability will shift to the supplier that has not changed its system to accept chip technology. If a customer uses a chip card, the failure to update the card reader may permit a counterfeit card to be successfully used. In that scenario, the supplier will bear the cost of the fraud. Again, the supplier will only be responsible for the cost of the fraud if the fraudulent transaction is a card-present transaction.

The major benefit of using a “chip and pin” payment card, and what compelled the US to migrate its cardholders to the new generation of cards, is improved security and fraud reduction. Whereas magnetic stripe card transactions rely on the holder’s signature and visual inspection of the card, the use of a PIN and cryptographic algorithms provide authentication of the card to the processing terminal and the card issuer’s host system.

The identity of the cardholder is confirmed by requiring the entry of a personal identification number (PIN) rather than signing a paper receipt. Unlike magnetic-stripe cards, every time a smart card is used for payment, the card chip creates a unique transaction code that cannot be used again. This eliminates the possibility of card duplication fraud as the transaction code becomes obsolete and cannot be used in further transactions.

While much of the rest of the world has already been using “chip and pin” cards for several years, the US is now committing to migrate its credit card use to this more secure format. There is a historical viewpoint regarding the reason for this delay by the US in updating its credit card technology standards. In the past, fraud was much more prominent in markets outside of the US. What has happened, especially over the course of the past few years, is that since other markets have migrated to “chip and pin” cards and become more secure, fraudsters have moved their focus to the US market. Essentially, they came to the US market because they were looking for less secure networks from which to steal fraudulent credit card information.

For suppliers in card-present transactions, the switch to this technology means adding new in-store technology and internal processing systems, and complying with new liability rules. For cardholders, it means activating new cards and learning new payment processes. And for the supplier and cardholder, it means a more secure form of payment by credit card, and fewer opportunities for fraud to occur. As the credit team is responsible for managing risk, including risk of fraud with payment channels, the credit team must prioritize compliance with this new technology within the organization for card-present transactions.
Scott Blakeley is a principal with Blakeley LLP, where he practices creditors’ rights and bankruptcy. His e-mail is: