electronic invoice presentment and payment application (cont’d) lack of information exchanged...

Electronic Invoice

Presentment and Payment Receivables Workshop

Marcelo García

VP, Citi Latin America Receivables and Tax

Collections Product Manager

[email protected]

+54 11 4340 2593

Treasury and Trade Solutions

mailto:[email protected]

1. Welcome and Introduction

2. Stakeholders

3. Invoicing Challenges

4. Segmentation

5. Payment Methods

6. Cash Application

7. Digital Solutions

8. eIPP Features and Benefits

9. Appendix

Welcome and Introduction

Session Facilitator

Marcelo García

Vice President, Citi Latin America

Receivables and Tax Collections

Product Manager

Marcelo leads the regional Receivables and Tax Collections strategy in Latin America. He is in

charge of traditional collections as well as innovative electronic solutions oriented to improve cash

application through efficiencies in the reconciliation process. He manages regulatory and market

requirements and provides advisory to regional and global companies

An experienced professional with more than 20 years in banking and IT services, Marcelo joined

Citi Argentina in 1994. He has held different positions in the local CitiService and Electronic

Banking Implementation units in Argentina, before becoming Receivables Subject Matter Expert

for Latin America with the regional O&T organization. More recently, in his previous assignment,

he was appointed Latin America Channel Services Product Manager, before transitioning into his

current role of Receivables and Tax Collections Product Manager for the region

Marcelo holds a Bachelor's degree in Information Technology from Universidad Argentina de la

Empresa (UADE) and is currently pursuing an Executive MBA degree from IAE Business School

in Argentina

Objectives

Share common

expectations around

Electronic Invoice

Presentment and

Payment solutions

Identify key participants and

coordination required for a

successful adoption

Discuss challenges

associated to the order to

cash cycle

Learn about other Digital

Solutions associated

to eIPP

Understand eIPP features

and benefits

3


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

Stakeholders

Who are the stakeholders

usually involved when assessing

the implementation of a new

Accounts Receivable solution ?

5

Stakeholders (Cont’d)

Expectations

Engagement

Alignment

Sponsorship

Initiator

Decider

Buyer

Influencer

User

Gatekeeper Client Incentives

Treasurer

Client

Service

Sales

and Credit

A / R

SSC Finance

IT

6


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

Invoicing Challenges

Which are the most common

invoicing challenges found

within the order to cash cycle ?

8

Invoicing Challenges (Cont’d)

Printing Delivery Dispute

Management

Paper and Supplies

Costs

Non-eco friendly

Courier/Postal Service

Costs

Delays

Frauds

Claims Desk

Tracking

Confusion

Communication

9


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

Segmentation

Based on their size,

which is the overall segmentation

of clients in your portfolio ?

11

Segmentation (Cont’d)

Small and

Medium Enterprises

Small

Businesses

Large

Companies

Limited electronic banking infrastructure

High Volume and Low Value Payments

Paper Based Payment Methods

Simple electronic banking infrastructure

Mid Volume and Mid Value Payments

Electronic and Paper Based Payments

Complex electronic banking infrastructure

Low Volume and High Value Payments

Electronic Payment Methods

eIPP has proven successful to generate

benefits by addressing improvement

opportunities in the interaction with Small

and Medium Enterprises

12


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

Payment Methods

Which are the most common

payment methods used by

your clients ?

14

Payment Methods (Cont’d)

Predominant from small businesses

Low value transactions Cash

Commonly accepted between companies

Mid value transactions Checks

Preferred method by large companies

High Value Transactions ACH Transfers

Online, real-time settlement

Limited availability

Multi-bank

PSPs

Common for recurrent, same value payments

Requires trust from payers Direct Debit

Mainly oriented towards consumer transactions Cards

Integrated

to eIPP

15


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

Cash Application

Which are the typical challenges

around cash application that

generate reconciliation issues

Are there any commercial or

market conditions affecting

cash application

How do you meassure efficiency

of cash application

?

? ?

17

Cash Application (Cont’d)

Lack of Information

Exchanged Among Banks

Lack of AR Information

in Advance

Non-standardized

AR and/or

Statement Information

Multiple Reports

Needed for

Reconciliation Process

Customer

Payment Behavior

Root Causes

Different Payment

Methods with No Details

Multiple Banks

No Integration through

Standard Formats

Customer

Payment Behavior

No Automated Processes

Conditions Challenges

Wires with no Details—

invoice Number Required

Delayed

Payment Application

Partial Payments

(e.g.: Due to WHT)

Returned Payments with

No Reference

No Payment Details on

Bank Statement

No Stopper to

Prevent Receiving

Incomplete Wires

Missing Payment Details

Lot of Third-party Checks

e-mail or Faxed Check

Image to Apply

the Payment

Risks Due to

Cash Collections

Upon Delivery

18


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

Digital Solutions

Are you familiar with any

digital solutions that may be

associated to eIPP ?

20

Digital Solutions (Cont’d)

Vertical integration, previous step to

eIPP in the order to cash cycle

Inquiries and payment application

for Sales reps on the go

eIPP’s payment module used as

Payment Gateway

Compliance with

regulations already in

place in different markets

eOrdering

Digital Invoice

eCommerce

Mobile apps

for Sales

21


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

eIPP—Electronic Invoice Presentment and Payment

An efficient tool to better control, visualize and manage your collections processes end-to-end.

Biller Payer Settlement

Biller/Payer set up and entitlements

Message translation and code normalization

Invoice delivery and trading partner notification

Uniform invoice approval/dispute workflow

Invoice presentation (including drill down,

multiple selection, etc.)

Dispute processing, handling and resolution

Payment processing and reporting analytics

Biller’s Bank Payer’s Bank

Citi Operations

Automated

Clearinghouse

(ACH) Credit

4

Deposit

Information

7

ACH

Debit 4

Debit

Information

8

Approve invoice

Adjust (if necessary)

2

Initiate and authorize

payment via ACH or

Deposit Slip

Confirmation

Files

5 Payment

Instructions

3

Reconciliation

File

6

Invoice Data

1

23

eIPP—Value-added

Delayed Payment

Application

Partial Payments due

to WHT

Lot of third-party

Checks

Issues

Addressed

Wires with No

Details—invoice

Number Required

No stopper to

Prevent Receiving

Incomplete Wires

Missing Payments

details

No Payment Details

on Bank Statement

Returned Payments

with No Reference

E-mail or Faxed Check

Image to Apply

the Payment

Over the

Counter

Payment and

Channel

Flexibility

Multibank

Reconciliation

Online

Real-time

Payment

Service

Providers Channels

and

Payment

Methods

Cash and checks

received at Citi

branches and

network extensions

Incoming transfers.

Different channels and

payment types can be

used on a single

payment order

Supports multiple

formats to retrieve

information of funds

received in other banks

Interbanking

(Argentina), PSE

(Colombia)

eIPP Integrates the Following Channels and Payment Methods

24

eIPP—Sinergy and Benefits

Increased automation

Accounts sinergy

Improved productivity

Finance

Bank agnostic

DSO reductions

Improved working capital

Clients Better integration

More efficient A/R control

Better A/R knowledge

Sales Online information

Risk tools

Improved control

IT

Reduction of processes

Savings in report implementations

Very low maintenance

Administration

25

eIPP—Savings

Project

Invoicing, Collection, Payment Initiation

and Automatic reconciliation.

Client

Food Company in Argentina

Details

60,000 invoices per year

$ 540/invoice

270 payers

Invoice disputes lower costs

– 10% invoice disputes

– Operative costs: $3

– Saving: $18,000 per year

Presentment lower costs

– Paper invoicing and courier: $1 each

– Similar cost in digital channel: $0.2

– Saving: $48,000

Payments process lower costs

– Check processing cost: $0.45

– Cost reduction EDT: 75%

– Check payments: 40%

– Saving: $8,000 per year

26


2. Stakeholders


4. Segmentation

5. Payment Methods

6. Cash Application



9. Appendix

eIPP—Citi and SDD Partnership Citi in partnership with SD&D is able to offer a robust eIPP solution to provide improved cash flow visibility, increased automation

and integration with their ERP’s, making it possible for clients to reduce DSO, minimize dispute rates, lower costs and accelerate

payment settlement for a more efficient reconcilement process.

SD&D Overview

Company founded in 1995

31 active billers in 8 different countries

Over 125,000 payers interacting daily

Over 24,500,000 orders and documents managed per year

between payers and billers

57,500 payments closed by month

Provides scalable, customizable technology solutions for the

Financial Supply Chain Management around: Einvoicing,

eCommerce, ePayments and eOrdering

SD&D Solution Differentiators

Ability to integrate into web-based ordering system

increasing the likelihood that customers will view the web

published receivable

Short time for implementation

Flexible platform that can be easily customized to clients’

requirements

Multi-bank solution

28

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