What are the activities that a typical business customer of yours engages in that mostly manually and cost-intensive? Don’t know? It’s likely that, as bankers, we don’t spend much time thinking about the internal cost of our business customers. But there are areas in which an FI has a direct opportunity to reduce costs for a business, regardless of what type. And in the process, becomes very strategic. Here is an example: reducing the manual effort of posting to accounts receivable.
Supposed your CEO is speaking with a local mid-sized business customer. Do you think that accounts receivable will be a part of that conversation? Unlikely. Neither the company CEO nor your CEO will think it worthy of their time. But in fact, it is likely that the company has significantly increased its manual posting of accounts receivable as the number of electronic payments it received has increased. I know its oxymoronic but most accounting systems were built around an old model of remittance (invoice/coupon) combined with a check payment. As payments increasingly go electronic, the remittance data is frequently decoupled from the payment. Which means someone from bookkeeping must manually find the remittance information and manually post a payment to accounts receivable. And that costs the business money.
Depending on the size of the company, there could be multiple employees that are engaged in this during a typical workday. And it is unlikely that CEO has that information top of mind. But if your CEO were smart to raise that issue and bring it into the discussion, the business CEO may learn about just how much money is wasted each month in manual accounting manipulation. A strategic service called Integrated Receivables would empower your FI to offer a solution to the business. By examining all sources of both remittance and payment data, a single interface to the businesses accounting system can eliminate nearly all of the manual effort, reducing the problem to a handful of true exception items. Integrated Receivables becomes a key element of your cash management / treasury services and the cost savings for businesses who are using it goes right to increasing the net income.
Which means the next time your CEO is talking to the business customer CEO, they are all smiles and discussing just how strategic your financial institution is for that business.