For many organizations, processing incoming payments from customers is nothing sexy. Despite the steady shift to electronic transfers of funds, it often still involves opening envelopes to remove, endorse and deposit checks.
Even so, handling this job as efficiently and accurately as possible is key to financial health for most companies.
AARP, an organization focused on the needs of individuals 50 or older, is known for its almost magical ability to send membership offers to individuals about to turn fifty, as well as to those who already have reached that milestone but have yet to join. In fact, the association, which boasts 37 million members, is one of the largest direct marketers in the U.S.
Yet several years ago, handling the mail and payments coming in from members – nearly three million pieces each month, including 1.37 million transaction-related documents – was proving difficult for the organization. Processing each piece was a largely manual and time-consuming affair, making it difficult to keep up with the organization’s growth, as well as the increasing complexity of the documents arriving at AARP’s headquarters.
The organization considered outsourcing these processes, perhaps working with a lockbox provider. However, management was concerned that the number of outsourcing providers would shrink, gradually eroding AARP’s ability to influence price, says AARP treasurer Jack Ellison.
Instead, AARP began working with Wausau Financial Systems’ Receivables360, says Tom Oberholtzer, vice president of business development, corporate solutions with Wausau. The application can handle a variety of payments, such as checks, ACH, credit cards and others, as well as non-payment documents. “It’s a document management and enterprise content management solution, integrated,” Oberholtzer says.
Gaining the capability to handle all types of documents in one system was key, given the volume of payments and mail AARP receives from its members. Along with more than 50 different payment forms, members send a variety of letters regarding, for instance, pending legislation, or input for a survey AARP is conducting.
The organization launched the technology in several chunks, Oberholtzer says. The initial focus was on payment processing. Today, all incoming payments, no matter the format, are processed through the 360 system, and deposited and posted to the ERP system the same day. “That improved cash flow and visibility,” Oberholtzer says.
In contrast, at many organizations, the treatment of incoming payments varies from one type to another. For instance, the process for handling exceptions will change as one moves from check to ACH to card payments. That creates “payment silos,” and adds complexity and duplication, Oberholtzer notes.
Bringing these processes together can drive expenses from an organization, lowering the per-transaction cost, Oberholtzer says. “You eliminate repetitive, duplicate tasks.” Combining payment channels also can boost productivity and service, since a customer service representative can assemble all of a member’s correspondence and payments to the organization to quickly resolve questions.
AARP also implemented Receivable360’s document management solution, automating the process of accepting each incoming piece of “white mail” or non-payment documents, and electronically routing it to the appropriate area. As each piece of mail moves along, AARP is able to track the document and let members know its status.
Automating these processes and integrating the receivables channels has resulted in several benefits for AARP. When compared to its peers, AARP’s transaction processing costs now rank among the lowest, due to the boost in efficiency; 70 percent of manual keying was eliminated. Where necessary, any remaining mail documents are keyed the same day they arrive. At the same time, customer service improved as documents are more accurately and quickly tracked and routed.
AARP also employed the solution to process the documents used by the volunteers that lead its Driver Safety Program around the country. That’s allowed the organization to re-deploy ten full-time employees.
In addition, the AARP marketing department has been able to boost the number of marketing tests it conducts each year; for instance, the department might send one direct mail piece to 100,000 people and assess the results before more widely rolling out the campaign. Prior to the implementation of Receivables360, it was able to conduct about 40 such tests each year. Now, it can handle more than 700.