Integrated Receivables- most bankers are not even sure what that is. It is a term that many businesses tend to throw around, but it seems to lack a specific and defined set of features. Yet, Integrated Receivables may be the single most important issue for financial institution’s business customers – accurately and efficiently posting monies owed. Without accurate accounts receivable posting, a company does not register income to the bottom line, revenue that is needed to conduct daily operations and grow a business. This process is like a pair of socks, so critically important for every step but not visible from the outside. Socks are hidden, inside the shoes, under the pants, out of sight, out of mind- until you don’t have them, then you have sore feet and blisters.

Have you noticed that socks are coming out of the background and making a more fashion forward statement? I notice it more with men; they have multi-colored or even iridescent, eye-popping colored socks. They are screaming, “I am socks, hear me ROAR!” This resurgence of socks as a must have fashion accessory makes me think about this issue of Integrated Receivables. Let’s face it, posting A/R is not sexy, but is a critical component of a business’s treasury and cash management activities, much like socks are critical to your stylish outfit.

As oxymoronic as it might seem, the increase in electronic payments to businesses has actually lowered straight-through processing rates. With electronic payments, like ACH and wires, the remittance information has been completely decoupled from the actual payment. This means someone has to get all that information from separate systems, usually email, and match it up with the payment in order to accurately post the funds. This whole process can take hours over a span of several days, increasing the cost a company spends to get transactions accurately applied. Existing bank-provided treasury management services fail to address this growing problem, which is only going to get worse over the next three years as electronic payments surpass checks as the payment method of choice for b2b payments.

Which brings us to the Aite reports issued in January of 2018. Aite Group published two reports on the subject of Integrated Receivables. In these reports Aite revealed that 73% of the businesses who responded to their survey would use integrated receivables as a reason to move their account to another bank. Now think about that. How important does something have to be in order to have that type of clout? Strong indeed. And that is where integrated receivables becomes an iridescent pair of socks, not only important as an integral part of everyday life—but willing to stand out and says, “look at me.”

FIs need to be providing expanded technology services, like Integrated Receivables, to help dramatically increase the straight through processing rates for those customers. Which of course, saves your business customers money and makes you a strategic partner for them. And those are both very, very good things. Like a well made pair of socks.