Remittance Processing Gets Smoother

New technologies are helping companies make manual exception processing the exception and customer information more informative.

Most treasurers at organizations that receive payments from consumers are all too familiar with checks that arrive without an account number or other identifying information. Processing these exceptions has always been a time-consuming, manual task.

About 500,000 of the 10.5 million customer checks that AT&T receives each month, for example, arrive without a payment stub or account number. The customers who send these checks may believe -- erroneously -- that their phone number and account number are one and the same, says Brad Saunders, director of remittance processing services in the telecommunication giant's billing operations division in Morristown, N.J. Until recently, these payments were processed manually, according to Greg Arlt, manager of systems and technology.

Not anymore. Over the past few years, Arlt and his colleagues have automated more than two-thirds of the tasks involved in processing exception payments. For example, they have implemented various applications that reduce or eliminate manual lookup of accounts. A high percentage of checks that arrive without payment stubs can now be automatically matched to the correct customer account -- so those funds reach AT&T's bank sooner.

AT&T's success in exception processing highlights one area in which treasuries' ongoing efforts to improve their remittance processing operations are paying off. And treasurers are making progress in other segments of this critical A/R function, too.

While few corporate treasuries are rushing to roll out technology initiatives to take advantage of the Check Clearing for the 21st Century Act -- commonly referred to as Check 21 -- many are experimenting with pilot programs, according to Stephen McNair, president of FTP Consulting Services Inc. in Southlake, Texas. Image capture technologies and electronic transmission of payment data are becoming more prevalent.

Treasurers are also seeing breakthroughs in their efforts to leverage the information their organization collects through its receivables process. And they are asking for -- and receiving -- better data from their lockbox service provider.

As companies' ability to electronically capture remittance information and check images grows, treasurers are gaining greater control over their relationships with banks and lockbox service providers. "Corporate customers are almost in the catbird seat for the first time," reports McNair. "They have much more leverage over their bank or financial institution than in the past."