Let’s address the elephant in the room: cash application
Many firms are surprised to hear that remote deposit acceptance significantly slows down their cash application process. This is a huge problem for AR teams because cash application is the most time-consuming activity of most AR departments according to industry research.
How AR staff allocates their time
Did you know AR departments spend 22% of their time on manual cash application, making it more tedious than handling credit application, invoicing, payments, collections and deductions?
Behind the curtain – remote deposits slow down cash application
Why is cash application so time-consuming? A key culprit for long cash application processes is how efficiently, or inefficiently, your staff is handling remote check deposits. Let’s face it. Remote check deposits are time-consuming and difficult to process for a variety of reasons – checks are often lost and cash from checks are only available once you make weekly trips to the bank.
In this blog, we will first investigate the root causes of inefficient remote deposit acceptance and explore best practices to reduce your time to post remote deposits, empower field staff to process checks faster and automate cash application for your AR team, ultimately saving your staff countless hours.
Common types of remote deposits
To understand the root causes of inefficient remote deposit acceptance, we must first look at the two major types of remote deposits: branch payments and field payments.
Branch payments are typically dropped off at a local branch and scanned for deposit via a desktop application with high performance scanners such as those manufactured by Digital Check. On the other hand, field payments are checks received in the field or at your customer’s location.
Most common customer challenges with payments
Let’s focus on solving the three most widespread challenges associated with field payments: lost/delayed checks, tedious manual work for field staff and decoupled remittances.
Challenge #1: lost and delayed checks
The biggest source of frustration for many AR teams is lost revenue from checks misplaced in the field and delayed checks that typically delay deposits until trips to the bank. But we understand the cost of not accepting payments the way customers prefer is greater than the pain of accepting them.
Once-a-week deposits slow down cash flow, and in the case of lost checks, creates an embarrassing situation where your staff has to reach out back to the customer to recut a check, or when they don’t remake a payment, bite the bullet and lose revenue.
Challenge #2: tedious manual work for field staff
Your field staff’s primary focus should be on customer service and satisfaction. Manual check deposits take away from field staff’s primary focus on customer service activities. First, the staff has to collect the field payments, assemble remittance packets, scan and send the packets to your AR team. Once your AR team receives the remittance packets in an email inbox, they have to search the inbox and manually match payments with remits – a time-consuming and difficult process.
Challenge #3: decoupled remittances
Tracking down remits from checks deposited in the field is time consuming, creating siloed cash application processes. Sure, most banks like Wells Fargo or Bank of America have mobile applications that allow you to deposit checks, but they don’t enable you to capture remittance information associated with payments for automated cash application.
Top 3 remote deposit best practices
Resolving these common challenges requires a holistic approach to remote deposits and cash application that frees up your field staff’s time for customer service and makes your AR team’s cash application less time consuming.
These are Billtrust’s three best practices to optimize your remote deposit strategy:
Best practice #1: enable same-day remote deposits
First, to reduce your time to post check payments into your firm’s bank account, you must enable same-day remote deposits with a remote scanning service like Billtrust’s Mobile Deposit Application and Desktop Application. This will eliminate the high costs of overnighting checks to corporate offices for depositing them and expensive weekly trips to the bank.
Best practice #2: automate cash application
Second, automate cash application so your staff doesn’t have to manually retrieve remittance packets from emails and scroll through lengthy files to match to open AR balances in your ERP system. A faster and more efficient method for cash application is to use an AR software automation solution like Billtrust Cash Application, which automatically matches remittances with payments in your ERP with less human intervention. This frees up time for your AR team to focus on more strategic, value-added activity rather than labor intensive tasks.
Best practice #3: equip field staff with mobile check deposits
Third, equip your field staff with a mobile application that will empower them to deposit checks through a smartphone. Enabling mobile check deposits will allow your staff to deposit checks in the moment they receive them, rather than once a week or at the end of the day after they are likely to get lost. Billtrust Mobile Deposits is an iOS and Android mobile app that can give your staff this capability.
By applying these three best practices, your firm can improve customer satisfaction and sharpen your operational effectiveness at processing remote deposits in a timely and efficient manner.
To learn more about Billtrust’s remote deposit solutions and how we can help optimize your company’s remote deposit strategy, please contact us today.