Since the pandemic started in 2020, most of us are doing business in a world full of new uncertainties for the foreseeable future. For example, gone is the certainty of steady cash flow, where a business can expect their customers to pay on time or even at all. To survive and thrive, many companies are accelerating their plans for digital transformation initiatives that include workflow and process automation to increase efficiency, save time, and reduce costs.
A common functional area of business where automation technology has high potential benefit is Accounts Receivable (AR). According to one market research report, the global accounts receivable automation market is projected to increase from $1.9 million in 2020 to 3.9 million by 2026. The demand for digitization of accounts receivable processes is especially relevant to order-to-cash applications which have inherent complexities that vendors have struggled to solve. One of the many requests has been to streamline incoming remittance advices. These non-standardized, complex documents frequently demand time consuming paper-based processes and manual matching to the hundreds of thousands of invoices received and paid in a single year. It has been an obvious target for the benefits of efficient automation for many years, and now has a powerful solution.
The Challenge of Remittance Advices
On the face of it, digital on-order paid remittances are straightforward; transactions are first matched and associated with their original customer invoice. Next, they are processed according to the defined business process rules and remittance instructions.
However, remittance advice documents can get tricky. These documents are provided as a courtesy, not as a legal requirement, and as such they do not follow a clearly defined format or schema across industries or customers. Many problems arise when remittance advice is incomplete, unreadable, or missing. These instances lead to remittance advice documents or accounts flagged for manual entry or processing. Also, large payments can include multiple disbursements across many individual invoices that are not always clearly referenced. These complex documents are most often sent to the accounts receivable team to manually compare and track what outstanding invoices the customer intends to pay against what they have already paid. It's not uncommon for the team to spend substantial time combing through bank statements and receipts to match remittance advice documents to an account. The extra time spent can lead to high Days Sales Outstanding (DSO), leading to cash process inefficiencies and cash flow problems.
An Integrated Solution
Fortunately, OpenText’s Vendor Invoice Management (VIM), today’s best-in-class invoice management solution, has extended its capability ‘Beyond Finance’ tasks to address this need. VIM can now be used to eliminate common pain points for incoming remittance advices, automate their application across invoices to reduce errors and missed payments, and free your team from the arduous tasks that take their attention from value-adding activities.
By taking advantage of the capability of VIM Beyond Finance to streamline the order-to-cash processes, delays, errors, and time-consuming tasks can be dramatically reduced. Incoming remittance advice documents can be digitized and processed using OpenText’s machine-learning powered document capture platform, Intelligent Capture for SAP Solutions (IC). The documents are matched and associated with the customer invoices, the customer's account, and payments are applied as requested. Any unmatched invoice items can be flagged for the team to evaluate and address.
This streamlined process decreases the DSO, and virtually eliminates the risk of double billing or prematurely (and erroneously) marking items paid. With its powerful knowledge base trained by industry best practices, VIM Beyond Finance saves valuable time and increases the efficiency and accuracy of the order-to-cash process.
Benefits of a Full Document Automation Platform
Incoming remittance advices is one of the many use cases for VIM Beyond Finance. OpenText’s latest update (VIM 7.6/20.4) provides full automation of documents that need to pass the desks of multiple stakeholders using a customizable rule-based workflow. VIM Beyond Finance customers have reported a 50% or more reduction in reconciliation times, increased ability to take early settlement discounts, and increased ability to handle more invoices with a smaller, more efficient team.
The bottom line is simple: implementing OpenText’s VIM Beyond Finance across your intelligent enterprise will save you money. You’ll be better equipped to meet the uncertainties of today’s world and you will be prepared to take advantage of opportunities to scale up at a lower cost than paper-based competition. Read more about what VIM Beyond Finance can do for your company by downloading “The Benefits of VIM Beyond Finance” today.
How Optima ECM Can Help
Optima ECM Consulting is a full-service ECM consulting firm. We help guide businesses through digital transformations, optimizing strategic workflows and automating manual, time-consuming tasks so they can focus on their business goals. As the SAP Gold Partner with the most VIM implementations in North America, Optima ECM Consulting understands the possibilities of the VIM platform, as well as the hidden pitfalls to avoid as you configure your environment.
To help clients get the most from their system, we developed a unique VIM Health Check as part of our proprietary Optima Accelerate™ methodology. This initiative is specifically designed to evaluate your VIM implementation's unique configuration, integration, usage, and storage health. We then deliver a comprehensive report outlining current risks, required maintenance, and system improvements to boost short- and long-term ROI. Finally, we can help you prioritize your needs and establish effective timelines and budgets to align your system with your business goals.
This detailed analysis will provide essential insights into your current solution and help you make decisions that support the long-term success of your company's intelligent infrastructure. Download the program overview now or contact us for more details.