Let Financial Management Software Help Your General Ledger Accounting

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Efficient and strategic financial management is crucial for the growth of any organization. One of the key components of financial management is maintaining an accurate and up-to-date general ledger. 

Traditionally, general ledger accounting involved manual entry, extensive paperwork, and the risk of human error. However, with the advent of modern technology, financial management software has revolutionized how businesses handle their general ledger accounting. Let's explore how financial management software can streamline and enhance your general ledger accounting processes.

 

Understanding General Ledger Accounting

General ledger accounting is a fundamental component of a company's overall accounting system. It is the central repository for recording and organizing financial transactions and maintaining the company's financial records. It offers a comprehensive and systematic overview of an organization's financial activities, enabling accurate and reliable financial reporting.

At its core, the general ledger is a master record that contains all the individual accounts used to classify and summarize financial transactions. These accounts include assets, liabilities, equity, revenue, and expenses – with so much information to process, something can easily go wrong if maintained manually! 

 

Financial Management Software | Close up of a general ledger with a pencil and calculator

 

Still Using Traditional Manual Accounting Processes? 

Manual general ledger accounting poses risks related to human error, time inefficiency, data accuracy, auditability, scalability, and compliance. Adopting financial management software and smart solutions can mitigate these risks, improve accuracy, streamline processes, and enhance overall financial management capabilities. Here are some of the pitfalls of manual general ledger accounting:

> Difficulty in Tracking and Retrieving Information: Without automated systems, retrieving specific transaction details or generating reports may become time-consuming and challenging. Locating and verifying information within extensive manual records can be cumbersome and prone to errors.

> Lack of Audit Trail: Manual general ledger accounting may lack a reliable audit trail, making it difficult to trace and verify the accuracy of transactions and adjustments. An audit trail is crucial for internal control, compliance, and identifying potential fraud or errors.

> Inefficient Reconciliation: Reconciling accounts manually can be a complex and time-consuming process. It involves comparing multiple documents and ensuring that all transactions are accurately reflected in the general ledger. Manual reconciliation increases the risk of overlooking discrepancies or making mistakes during the process.

> Limited Scalability: As the volume of transactions and the complexity of the business grow, manual general ledger accounting becomes increasingly challenging to manage effectively. It may lead to inefficiencies, errors, and difficulties in handling the increased workload.

> Security Risks: Manual records are susceptible to physical damage, loss, or unauthorized access. Protecting sensitive financial information and maintaining data confidentiality becomes more challenging without the security measures provided by financial management software.

 

Financial Management Software | Image of three people at work sitting around a table with charts scattered around; one person holds a tablet.

 

Smart Financial Management Software Improves Accuracy, Efficiency and Security

Introducing smart financial management software can greatly benefit your general ledger account, here’s how:

Automating Data Entry:

Financial management software eliminates the need for manual data entry, reducing the likelihood of errors and saving valuable time. It can directly integrate with various systems and capture financial data automatically, such as transactions from sales, purchases, payroll, and bank accounts. By automating data entry, the software ensures accuracy and allows your accounting team to focus on more strategic tasks.

Real-Time Updates and Accuracy:

With financial management software, your general ledger is always up-to-date. As transactions occur, the software records them in real time, eliminating the need for manual journal entries and reducing the risk of overlooking or duplicating entries. This real-time updating ensures accurate financial reporting and provides management with timely insights into the company's financial health.

Streamlined Reconciliation:

Reconciling accounts can be a time-consuming and error-prone process. However, financial management software simplifies this task by automating the reconciliation process. The software can match transactions, identify discrepancies, and provide alerts for any inconsistencies, ensuring that your general ledger remains accurate and balanced.

Improved Financial Reporting:

Financial management software offers robust reporting capabilities, allowing you to generate customized financial reports effortlessly. These reports provide valuable insights into your organization's financial performance, including profit and loss statements, balance sheets, and cash flow statements. The software's reporting features enable you to analyze data, identify trends, and make informed decisions based on accurate and up-to-date financial information.

Enhanced Security and Compliance:

Financial management software maintains security and protects your sensitive information from unauthorized access. Additionally, the software often incorporates compliance features that help ensure adherence to regulatory requirements and accounting standards, reducing the risk of non-compliance penalties.

Scalability and Integration:

As your business grows, so does the complexity of your general ledger accounting. Financial management software provides scalability to accommodate your expanding needs. Whether you have a small startup or a large corporation, the software can handle the increasing volume of transactions and adapt to your changing requirements. 

 

Financial Management Software | Image of two people at work sitting around at a desk with financial reports and graphs as they point to various papers

 

Furthermore, many financial management software solutions integrate with other business systems such as customer relationship management (CRM) software and enterprise resource planning (ERP) systems, enabling seamless data flow and enhanced efficiency across departments.

Financial management software has become a game-changer for general ledger accounting. By automating data entry, ensuring real-time updates, streamlining reconciliation, improving financial reporting, and enhancing security and compliance, this software empowers businesses to optimize their financial management processes. 

Want to learn more? View our robust FAO services or get in touch with us and our team can answer your questions and guide you with the right solutions. 

 

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Niharika Sharma
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Industry Solutions

Transform Cash Application with Automation and Smart Invoice Matching

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With today's economic uncertainties, business leaders are looking for ways to increase savings, reduce costs, and optimize processes to prepare for any potential issues that lay ahead. One particular area of interest is automating finance and accounting operations, including cash application and integrated receivables. Cash application refers to the process of matching a customer's payment to the invoice that's being paid in the vendor's accounts receivable ledger. 

While many companies have already begun the automation process of these particular functions, some are still slow to upgrade. We do, however, see an uptick in financial automation. According to Globe Newswire, accounts receivable automation is expected to grow at a compound annual growth rate of 14.2%, from $3.3 billion in 2022 to $6.5 billion by 2027.

Making cash application and integrated receivables a major part of your digital transformation strategy can save your business a lot of money. It can reduce manual labor and accelerate cash flow by decreasing the time it takes for the cash to enter your accounts. Cash application has a significant impact on business due to its contributions to the steady flow of cash. If payments are stuck at posting in the cash application process, companies won’t have access to the cash they need. Failing to manage cash application and inadequate control of cash flow can create major issues for the business.

 

Current Challenges of Cash Application 

Even with the existing digital solutions for cash application today, many businesses still face challenges in their cash application process including: 

 

Slower Processes

If a company relies on mostly manual work and light automation, the cash application process will run significantly slower, delaying the time it takes for companies to receive cash. Cash application requires accuracy and speed but manual processing comes with human error and slower turnaround times. This can be a significant problem when your business requires liquidity so that your cash is available when you need it.

 

Lack of Visibility

Less robust software, or having no software at all, means that there's a lack of visibility into where the cash is. During any time of economic uncertainty or crisis, it's imperative to know what is going on with your cash, to find ways to better improve cash flow, and to see where any issues may lie in delayed deposits. 

 

Customers Want More

As technology continues to develop, customers expect businesses to implement technology in order to provide them with a good experience. In today's world, customers want a variety of options to pay from paper checks to ACH to wire transfers to debit or credit cards or even a digital wallet. Offering multiple ways to pay provides an excellent customer experience. Not all systems can accept multiple payments, however, which could create friction in the customer relationship.

 

Complexity

Cash application seems like a fairly easy process when defined.However, in practice, it gets significantly more complicated. For example, a single invoice may be sent for multiple orders, which can create confusion when comparing the invoice to the orders and ensuring that they match. These types of complexities often create more work for the accounts receivables team and, without an advanced automated system in place, it can be a significantly time-consuming task.

 

Cash application | Person looking at a paper summary report and looking at their laptop showing charts

 

Automating the Cash Application Process

As we've already established, the quicker the cash application process, the sooner the company has cash available to spend on essential expenses. By automating cash application, invoice processing, payment and remittance matching, and other formerly manual tasks become streamlined, accurate, and quick. 

The digital solution a company has in place defines the features and technology that they'll be able to use. Different kinds of software have different features, so it’s important to keep certain ideas in mind when looking for a cash application automation software.

 

Improved Cash Flow

This is the bottom line for the cash application process and therefore any software being considered needs to show how it improves cash flow. Without improving cash flow, the solution or software isn't doing its job.

A cash application solution that can match the remittance data with related electronic payments can post that data and the payment simultaneously, resulting in receiving the payments sooner. This will significantly reduce Days Sales Outstanding (DSO) and improve cash flow.

 

Reducing and Managing Exceptions

This is another complexity of the cash application process. The remittance data that accompanies electronic payments can be inconsistent or incomplete. Also, the payments may arrive separately from the related remittance information, creating a challenge when it comes to reconciling payments. With a manual system in place, reconciling payments is time-consuming and lacks visibility around the incoming payments. This can not only affect cash flow but can also affect customer relations. 

With automation, you want to be able to reduce the volume of payments that typically would require extra attention prior to posting. Whether the customer sends a paper payment or an electronic payment, the system should be able to capture all important information seamlessly to accelerate posting.

 

Improve Employee Satisfaction

Automation reduces tedious time-consuming, repetitive, manual tasks and allows employees to focus on more strategic tasks. Repetitive tasks can be irritating and even hinder work performance, making the job less appealing. In a 2022 survey, employees claimed they wasted four and a half hours every week on tasks that could be automated; more than 68% of the employees wanted to take on new responsibilities but felt unable to do so due to the repetitive activities they were currently working on. Through automation, employees will have the ability to take on more responsibilities and expand their skill set.

 

Smart Invoice Matching

Smart rules-based and learning system -based invoice matching is a major consideration because it will significantly decrease the time to complete cash application processes. Some software platforms do not offer this particular feature, but it can make a huge difference in the account receivables process. With the right solution, invoices will be matched using standard, advanced, configured and learned rules, which reduces or even eliminates manual tasks in this operation. Invoices are scanned and converted to digital assets then matched and checked against algorithms and rules while the system learns every day on the matching patterns allowing users to create rules. If everything checks out, the payment is processed without any manual effort. This means that validating and matching invoices becomes streamlined, quick, and error-free.

 

Cash Application | Person paying a bill on their phone

 

Maximizing the Integrated Receivables Process 

The robust software platform that incorporates all of the points discussed above is Exela’s Integrated Receivables platform. Our platform goes beyond cash application and helps you coordinate every stage of your receivables system from AR reconciliation to analytics. Additionally, robotic process automation greatly reduces your workforce demands, processing times, and DSO by unifying your inbound channels and streamlining your cash application process.

Creating a robust system to meet customers' needs, Exela's platform provides cash application, file consolidation, data enrichment, and smart invoice matching. Our customizable solution presents an easy-to-manage, modular approach to billing and payments management that results in lower implementation costs, and reduced time to market. Exela’s Integrated Receivables platform enables add-ons and system adjustments as needed to optimize treasury operations.

Intelligent robotic process automation systems use optical character recognition engines to accurately capture data from varied structured and unstructured sources. The data is then digitized, A/R matched, and ingested into your ERP system. This eliminates the need for manual keying and improves process efficiency and accuracy. Because the system is able to accept a multitude of payments with ease, customers have the freedom of selecting their payment type.

Exela’s platform also enhances visibility and provides real-time activity monitoring so you can know where your cash is. Through reporting tools that integrate with the dashboard, you can further see into the receivables process. 

 

Smart Algorithm and Rule Base Invoice Matching Changes Cash Application

Not all automation is created equal and with a robust platform, companies can see better results. While many digital solutions exist for cash application and accounts receivables, finding the right one with the right features can be tricky. With a solution that offers smart invoice matching such as Exela’s Integrated Receivables platform, you’ll see a significant reduction in DSO, manual processing, and errors. It’s time to experience an optimized financial operation with Exela’s Integrated Receivables solution. 

 

Author Name
Carolyn Hedley
Date
Industry Solutions

What is a Transaction Management System and How Does it Improve Payments?

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Payment processing is a critical operation for businesses wherein leaders have visibility into deposit transactions, can mitigate possible fraudulent transactions, and can view any bottlenecks or issues that may be occurring. This can be a tedious task requiring significant manual labor. 

Finance teams may need to go into the company system to view transactions, look for trends, search through historical transactions, and determine issues. However, automation has helped to replace this process, providing an easier way for customers to pay while enhancing visibility and reducing manual tasks for financial teams. Transaction management software enables businesses to have a seamless process from start to finish.

 

Payment processing | Person swiping their credit card through a card reader

 

Streamlining Transaction Management and Payment Processing

With transaction management, leaders need to ensure that their financial transactions and any operations related to those transactions are functioning appropriately. Transaction management software helps organizations manage all of their transactions. Some software may only be able to handle digital transactions while others can handle a variety of transactions, whether digital or paper. Helping with the creation, execution, and storage of transactions and related documents, transaction management software keeps everything compliant and secure.  

Financial transactions are an important part of the relationship between vendor and customer. It benefits both the customer and the business to have a fully functioning and streamlined transaction. With transaction management software that is finicky, slower, or creates issues, the customer experience can be affected and businesses could fall behind their competitors.

By using the platform, rather than relying solely on manual processes, you're relying on automated technology processes to perform functions quickly, efficiently, and accurately, making the entire process optimized and improved.

Take banks, for example. By using Exela's transaction management software, banks can offer their customers a variety of ways to pay their bills. Customers can select how they pay their bill, whether through ACH, check, credit card, debit card, etc. Once the payment is made, that transaction is completely visible to the bank, providing a complete auditable trail. Using software and automating transaction management results in cost reduction and increases efficiency and accuracy.

Exela's Transaction management software can also be used for exception processing and managing rejections and reconciliation. For example, a transportation company may use physical invoices that need to be scanned into the system. Since paper invoices and bills require a manual capture process, some of the transactions are missing pertinent information. While document types and fields are automatically populated, the software can flag any transaction that may be missing details, allowing users to easily access their transaction information through a secure web portal and add the missing information or reach out to the customer to obtain the information. 

 

Transaction Management | Close up of person holding a credit card and paying a bill on their laptop

 

Improving Payments with Transaction Management Software

Using transaction management software, businesses can see a serious improvement in their customer relationships, cash flow, and more. Here are some of the benefits transaction management software can offer.

Optimizing the Transaction Process

Automating the transaction management workflow creates a chain of custody for each transaction while freeing up resources. Rather than spending time on manual tasks, financial teams can instead focus on other key operations. Not only that, manual tasks are prone to errors while automation is more accurate. 

Auditing Transactions

This is another task that was once manual and significantly time-consuming. However,  automation software can quickly audit each transaction from start to finish. You can look at your historical transactions or recent transactions or search for the transaction of a particular customer.

Enhanced Customer Experience

Transactions are a major component of a customer experience. If customers find that transacting is difficult, complicated, or requires extra steps from them, they're more likely to report that as a negative experience. Whereas if a company provides a smooth and seamless transaction platform that allows customers to pay quickly, using the payment method they want, with as few steps as possible, this provides a great customer experience.

Increased Savings

Transaction management software increases savings in multiple ways. First of all, with software in place, a lot of the transaction process is automated, which reduces the amount of work employees perform. Transactions are streamlined, visibility is improved, and some software can provide reports to gather key insights into the transaction process. All of this can be done in a fraction of the time it would take a single employee to do the task.

Another way it may save money is by encouraging customers to use online payments rather than sending in paper payments. With the cost of paper rising, the decrease in paper usage can turn into significant cost savings for companies.

 

Transaction Management | Person smiling while looking at their phone with their laptop in front of them

 

Enhance Payment Processing with an Exela-Hosted Software and Mobile Solution

While some businesses may choose to outsource their payment processing, transaction software enables companies to keep their operations in-house. However, depending on the software, this can also present a challenge as some software is unable to integrate into existing legacy systems. The software also often requires on-premise hosting, creating another layer of implementation and maintenance to consider. 

The good news? We have the solution. Exela’s Transaction Management System (TMS) is advanced software that supports payment processing with cloud resiliency while simplifying and streamlining payment operations. Not only does TMS perform remittance processing and electronic clearing, but it also captures and processes full-page documents while providing a variety of data entry tools. 

TMS integrates into your backend systems easily and its modular architecture allows for scalability and reliability while excelling at processing high-volume payments. Bank-agnostic and hardware-agnostic, TMS fits into customers’ needs without restriction. 

Exela hosts TMS in its Azure cloud, enabling companies to access the software and maintain their operations in-house. With its online portal, teams can view and resolve transactions easily. The platform offers an end-to-end workflow, from capturing and accepting payments to providing dashboard reports. The system processes print and digital deposits as a single workflow and processes payments with supporting documents such as invoices, structured or unstructured forms, tax forms, etc.. TMS prevents duplicate payments with real-time duplicate check detection and correction. 

With its remote mobile capture, customers can easily transact using the payment method and transaction method they prefer from across the street, or from around the globe. Supporting both Android and IOS interfaces, TMS offers a mobile solution that captures checks, and coupons securely. Offering an easier way for customers to pay creates a smoother payment experience and process. 

 

Take the Next Step for Optimized Transaction Management

Given the importance of your payment operations, it’s time for leaders to improve the transaction management process using software that’s flexible, advanced, and efficient. Learn more about Exela’s TMS platform and what it can offer you!

 

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Carolyn Hedley
Date
Industry Solutions

Prepare Your Business for the Future of Payments

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Prepare Your Business for the Future of Payments
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Payments are a fundamental part of business – from the local mom-and-pop shop all the way up to global enterprises. So, technology changes occurring in the payments industry tend to have a big impact. And make no mistake, changes are coming. Check out the latest edition of PluggedIN: The Future of Payments for a look at some of the biggest trends in payments technology, including:

  • The Past, Present, and Future of Payments
  • Request to Pay: Payment Meets Communication
  • The Rise of Real-Time Payments
  • Integrating and Automating: From Procurement to Payment

PluggedIN is Exela's thought leadership publication, providing fresh insights from the cutting edge every quarter. Subscribe to get plugged in.
 

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Matt Tarpey
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How Request-to-Pay is Adapting Payments to the New Normal

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How Request-to-Pay is Adapting Payments to the New Normal
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It’s clear that the COVID-19 pandemic will likely have a lasting impact on many things, from the way we travel to the popularity of remote work arrangements and contactless delivery options. Add to that list the way individuals and small businesses make and request payments. As this new white paper from Finextra and Exela discusses, the economic crisis brought about by the pandemic will create a situation where both payers and payees will benefit from Request-to-Pay (RtP), a more agile solution to settling invoices and debts.

Request-to-Pay removes some of the friction related to sending and receiving payments and increases liquidity - a crucial benefit for the post-coronavirus world.

Influx of Gig Workers

One of the biggest groups RtP stands to benefit is the newly-unemployed. The closures, temporary or permanent, of businesses across the world led to a massive wave of layoffs and furloughs. According to Fortune, 44.2 million people filed for unemployment services in the U.S. during the coronavirus pandemic, as of mid June. This spike will likely lead many who previously held full-time positions to turn to freelance or gig work as a source of income.

With a less stable income, many of these workers are likely to opt out of direct debit bill payments, as they may not be able to guarantee that their accounts will contain the necessary funds when the bills come due. But with Request-to-Pay, they get a direct line of communication with the payment requestor, as well as the ability to renegotiate and submit partial payment, allowing them to retain more control over their obligations and payments.

Lenders Pulled in Two Directions

As more people are faced with the looming or present threat of financial instability, many will turn to banks for support. This will naturally cause lenders to want to tighten their lending criteria in order to protect their assets and invest wisely. However, at the same time, due to the nature of the crisis leading to the rise in financial instability, banks and other financial institutions may face political pressure to take on more risk to help support families and small businesses.

In some cases, utility companies facing similar pressures have sought flexible tools that would allow people to slip into shortfall without taking a sizable credit hit. Financial institutions may want to adopt similar practices in order to assist their customers through these unprecedented times.

Request-to-Pay can mitigate some of the risks associated with lending by combining an instant payment function with an easy communications channel where parties can enter into a dialogue to discuss and potentially update terms of payment. This not only reduces some of the costs associated with chasing down payments, but also limits the need to involve third parties like debt collection agencies.

In many cases, it’s in the lender’s benefit to allow some flexibility in payment terms. Many customers may only need a few extra days. RtP makes it easy to formally agree to this type of modification, allowing lenders to avoid a lengthy and expensive arrears process and instead receive payment, albeit a little later.

This type of flexibility is made possible by the speed at which RtP delivers funds - that is, instantly. The ability to send and receive payments instantly creates greater liquidity, making it less risky to negotiate bills and invoices.

Conclusion

As COVID-19’s impact continues to reshape our economy, cash flow will be top of mind for small businesses. At the same time, faced with unexpected job losses, millions of consumers may enter the gig economy, forcing them to adapt to a life with less consistent income and less financial security. Financial institutions and lenders will face pressure from governments to resist the natural inclination to tighten lending criteria in order to provide support to families and small businesses as they deal with the financial fallout of COVID-19. Innovations like RtP can help dampen that blow and smooth out the transition.

New products that harness real-time payments and Open Banking are uniquely suited to thrive in this new normal. Such innovation is often stifled by apathy or inertia, but the current crisis has invigorated businesses to actively seek out paradigm-shifting solutions like RtP. As the world emerges from the COVID-19 pandemic to discover a new normal, easier, more flexible payment options may be one way it changes for the better.

For a deeper dive into how Request-to-Pay is tailor-made to solve some of today’s biggest financial challenges, download the full whitepaper here.

 

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Matt Tarpey
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Finance and Accounting Solutions

Finance & Accounting

Take your finance department to the next level with powerful order-to-cash, procure-to-pay, and record-to-report solutions, conveniently housed within a single, intuitive platform.

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Exela offers proprietary software, web platforms, applications, and machine learning systems that work individually or in combination to offer superior money management solutions, streamlined and automated workflows, improved risk mitigation strategies, optimized cash flows, and enhanced data collection, analysis, and reporting.

Firm Lowers Costs by Outsourcing Remittance Operations

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Banking & Financial
Features & Benefits
CHALLENGE:

A Fortune 500 provider of global procurement, payment and travel services, with 181 billion dollars in assets sought to reduce its total cost of ownership (TCO), associated with its front-end and back-end remittance processing, to just 80%. Managing an annual volume of more than 30 MM paper remittances in-house required significant investments in equipment, labor, system licenses, and PCI-compliance audits. To off-set some of these costs, the firm wanted to downsize and consolidate its in-house operations. The firm was also getting bogged down with multiple software licenses, in-house ACH clearing systems, and contracts that were due to expire.

SOLUTION:

The firm selected Exela as its primary out-source provider for its remittance processing operations. Currently, Exela processes an annual volume of more than 30MM payments for the firm. Outsourcing its remittance operations, including its manual keying and depository functions, provided the firm with a means of reducing its total ownership costs. The implementation encompassed a phased approach, beginning with front-end operations, and continuing with IT/back-end processes, including ACH clearing, quality assurance and depository functions. Working together with Exela, the firm completed a successful migration from its previous remittance platform, US Data Works, to Exela’s TMS system. The firm’s ACH engine, which was also expiring, was replaced with Exela’s solution.

Today, we provide the full spectrum of paper and electronic payment processing services including:

  • Commercial and retail LockBox processing services
  • Electronic LockBox services
  • Remote remittance LockBox spoke
BENEFITS:
  • Improved processing turn-around times, from 3 ½ days to 48 hours
  • Decreased the firm’s total ownership costs by 20%
  • Dedicated Relationship Management
  • Continuous SLA Achievement: Payment post accuracy (99%); timeliness; duplicate payments; exceptions; decisions processing errors; misposts
  • Continuous Improvement: Since partnering with Exela, this firm has benefited from several system upgrades; process improvements and service extensions.
  • Risk Mitigation: By entrusting its auditing and compliance activities to an expert. the firm was able to reduce its risk of regulatory non-compliance

 

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Alabama’s Department of Revenue Makes Taxpayers Happy with New, Automated Process

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Public Sector
Features & Benefits
CHALLENGE:

When it comes to processing tax returns, people expect the government to respond in a timely and efficient manner. Many local and state governmental organizations still rely on outdated, physical paper-based workflows when processing consumer tax returns—opening the door for processing delays and errors, not to mention risk from a lack of standardization across departmental systems. Without automation, agencies struggle to: keep up with evolving compliance and security regulations; handle seasonal peaks in volume; absorb added labor costs; and implement uniform quality control procedures. New mandates from U.S. law-makers for wide spread, systemic changes are propelling agencies towards a complete over-haul of existing forms processing operations.

Alabama’s Department of Revenue (the Agency) was just one of hundreds of governmental organizations looking for outside help to modernize its forms processing environment. It was struggling to absorb costs associated with hiring and supervising seasonal workers to handle peak season tax return volumes, as well as labor required for data-entry and mailroom functions. To add to this, a new change to the hiring process was implemented, which required background checks for all temporary workers. The agency was experiencing a huge bottle neck and long processing delays during tax return preparation, caused by older remittance processing hardware and software; and large paper backlogs. Tax payers were beginning to send in duplicate checks with their returns, which was a big source of the problem. Because its remittance process was entirely paper-based, it could take more than 14 days for customers to receive refund payments. Due to the sensitive nature of information, and the growing potential for tax fraud, it was also important to have stringent security and risk mitigation procedures in place. Finally, the agency needed to update its current system to enable electronic and web-based reporting; for greater transaction transparency and workflow governance.

SOLUTION:

With taxpayers dissatisfied with long processing delays; the limited storage capacity and inconvenient location of its stand-alone warehouse; and mounting hiring and facility maintenance costs, the Agency decided that it was time to make a change. After weighing the options, the Agency determined that outsourcing to a seasoned provider was the best and only option. It selected Exela as its outsourcing partner because of its decades-long history of providing remittance services to large governmental organizations.

Leveraging Exela’s expertise and proprietary digital technology, the Agency could now streamline and modernize all aspects of its remittance operations. Replacing manual workflows would significantly improve the customer experience by reducing payment cycle times and minimizing security risk. To help further reduce over-head costs, and create more jobs for Alabama residents, Exela worked with the State to construct a brand new facility that would replace the Agency’s on-site warehouse. All of the Agency’s remittance operations would be transferred to this facility.

The partnership with Exela began in the year 2000 with the implementation of keying services, with additional services added incrementally over time to ensure a seamless transition. Today, Exela manages the entire spectrum of the Agency’s remittance operations including:

  • Opening envelopes and removing contents
  • Preparing and scanning returns
  • Data keying
  • Image capture and storage
  • Quality review and assurance
  • Document destruction

Exela processes approximately 3,100,000 pieces of mail and 1,000,000 checks during the course of the year. During peak seasons, volumes can reach up to 15,000 transactions within a single day, translating into a capture of more than 1,000,000 keystrokes annually. Documents are converted to digital images utilizing Exela’s proprietary, high speed IBML technology for high quality image output, and to ensure that scanned images are exact (or better) duplicates of original documents.

To date, Exela supports the Agency’s evolving remittance needs by providing:

  • End-to-end tax return processing for: individual income tax; corporate tax; withholding tax; sales and use tax; crash records/accident reports; and other misc. taxes
  • Voucher and tax return payment processing
  • Modernized image hosting and archival platform
  • Web-based remittance and volume reporting
  • Data processing support for refunds, filing extensions, and other exception items and correspondence
  • LockBox services/remittance processing including Check 21 (managing 1.1 million dollars in transactions per year)
  • Middleware Software Security and Testing (MIST); development of techniques and procedures for vulnerability assessment
  • Online customer exceptions management
  • Fraud detection and prevention system
  • Mail room services including, a certified mail receipt tracking system for packages receipt notification
  • 2-D barcoding system
BENEFITS:

Since the full implementation of services, Alabama’s Department of Revenue has benefited from a complete transformation of all aspects of its forms and remittance processing operations. By automating and streamlining its workflows, the Agency has realized significant cost-savings, greater accuracy rates and quicker processing turn-around times. While, implementing stricter security measures and controls enabled the Agency to reduce the number of fraud incidences; resulting in additional savings. With the implementation of Exela’s solution, deposits can be made multiple times a day versus daily or bi-weekly. As a result, insufficient funds can be recognized sooner. This enables the Agency to quickly proceed with communication and collection activities.

Specific accomplishments include:

  • Reduced average tax return turnaround from 14+ days to 24 to 48 hours
  • Implemented 2D barcoding capabilities to capture data with 100% accuracy and same day turn around
  • Executed archival scanning processes for closed withholding and envelopes, among others
  • Reduced state-employed data entry and mailroom staff by 250 full time employees
  • Experienced $2 to $4M annual savings through W-2 fraud detection and prevention
  • Eliminated a 30,000 square foot warehouse
  • Significantly improved revenue collection and float reduction by re-allocating resources towards hiring more collectors and depositing return payments at a faster rate
  • Modernized its reporting system to include, web-based reports, electronic remittance reports, and electronic daily volume reports; creating greater transparency and accountability
  • Eliminated Unisys Check Transports and Software, which saved the state hundreds of thousands of dollars in annual software and maintenance fees
  • Reallocated 165 full time employees to concentrate on critical tax collection activities
  • Redistributed 12,000 square feet of space to employee classrooms and training rooms
  • Achieved processing accuracy rates of no less than 99.5%

 

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Industry Solutions

Banking Giant Saves Millions by Outsourcing LockBox Operations to Exela

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Finance & Accounting
Features & Benefits

Faced with increasing economic pressures, an expanding geographic footprint and more demanding customers, financial institutions are choosing to outsource peripheral lockbox processing functions and re-focus efforts on upgrading and expanding core offerings. Aside from the obvious cost-savings implications, relying on the expertise of a dedicated LockBox provider can offer businesses several strategic advantages. Amid a rigid regulatory landscape and growing privacy concerns, the need for effective security controls and enhanced compliance measures is more important than ever. And, many organizations don’t want to be burdened with added investments in state-of-the art equipment and emerging technologies. By outsourcing their LockBox operations, financial institutions are finding new ways of diverting and re-allocating resources and expenditures for improved productivity and competitive gain.

CHALLENGE:

As one of the top 8 financial institutions in the U.S., this firm was searching for opportunities to maintain its competitive edge in a continuously evolving and demanding marketplace. Delivering superior products and customer experiences was at the forefront of its priorities. But, extensive resources were being pulled away from its core banking operations to manage its LockBox processing activities, spread across six different cities. The bank was also struggling to keep on top of emerging technologies and the latest industry best practices, while, at the same time, trying to improve customer retention and acquisition rates through exceptional customer service. Although the bank has been outsourcing other onsite operations to Exela for the past 30 years, it wanted to take the next step towards total re-allocation of resources. Customer data security and privacy were additional considerations for the bank.

SOLUTION:

To advance its strategic agenda, and leverage the expertise and technology of others in this space, the bank made the decision to outsource its LockBox operations. It sought the assistance of a specialized technology provider that was well-versed in executing large, onsite remittance implementations. It selected Exela because of its vast network of talent; versatile service-delivery model; technologically-advanced applications; and experience managing operations across multiple sites. The solution, valued at 100 million dollars, has expanded in scope to include the following:

  • LockBox Processing: Exela is charged with overseeing and executing all aspects of the firm’s LockBox operations across six locations; utilizing existing facilities and equipment. As part of the end-to-end solution, Exela manages mail retrieval; image and data capture; archival; delivery; remittance; and the secure transfer of customers’ information.

  • Worked with HR to establish a transition team

  • Employee Conversion: To complete the total transfer of LockBox operations, Exela added over 600 on-site bank employees to its workforce. This is in addition to the more than 1,500 employees that have been re-badged during this partnership. To ensure a successful conversion, the following procedures were completed prior to implementation:

    • Collaborated with bank staff to determine important goals for the transition process

    • Established a transition team by working with Exela’s Human Resources and Recruiting departments

    • Implemented peer to peer support and knowledge transfer programs for transitioned employees

    • Scheduled regular cadence and toll-gate employee reviews

  • Robust Disaster Recovery/Business Continuity Plan

    • Recovery procedures and recovery time objectives for each application or critical infrastructure

    • Roles and responsibilities of technology recovery teams

    • Communication plan

    • Procedures on how to invoke the technology recovery plan(s)

    • Dependencies on other plans (including technology)

    • Prioritization strategy

    • Back-up procedures including frequency and retention

  • Enhanced Governance Model

    • Weekly meetings, status calls, gate reviews

    • Dedicated project manager

    • Constant communication among key client and Exela stakeholders

    • SharePoint team site

    • Established product requirements / assumptions / constraints

    • Developed team action report

    • Implemented project cost controls

    • Utilized status dashboard

    • Instituted steering committee consisting of high-level Exela management

    • Initiated change control process; internal audits and sponsor feedback procedures

BENEFITS:

A partnership with Exela has produced several positive results. Most notably, is a cost savings of $40 Million over the last 10 years. The bank has also achieved 99% of its performance goals. Leveraging the resources and expertise of an established LockBox provider has allowed the bank to dedicate its operations to the development and delivery of core banking products, while delighting customers with exceptional service. Some additional benefits include:

  • Minimal investment in equipment ownership and maintenance

  • Continuity of labor and employee wages

  • Mitigation of privacy and information security risk

  • Opportunity for future process improvement and cost-savings

  • Courier service/mail delivery reliability

  • High level of processing accuracy

  • Consistency of workflows across bank sites

 

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Not-For-Profit Organization Overhauls Remittance Processing for Faster and More Cost Effective Results

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Public Sector
Features & Benefits
CHALLENGE:

A large not-for-profit animal welfare organization based in Boston was in desperate need of a more updated, efficient and cost-effective remittance processing solution. Handling thousands of payments in the form of checks, cash, and credit cards was a daunting task. It relied largely on manual intervention and legacy equipment. The company realized that their traditional, remittance processing system was no longer sustainable. Workers were required to sift through donations, scan checks, and manually process cash and credit card payments. This was both costly and cumbersome, consuming valuable resources that could be more efficiently utilized in other areas. Any exceptions had to be manually handled, usually involving additional reviews and re-scans. The organization could also benefit from more reliable marketing data for effective and targeted campaigns aimed at soliciting sponsorships. There was no efficient way of collecting and integrating customer profiles into their existing CRM system.

  • System inefficiencies slowed worker productivity when scanning checks and processing payments.
  • Exceptions were handled manually, resulting in errors and rescans.
  • No streamlined way to capture and integrate marketing data into a CRM system.
  • Entire process, from payment receipt to deposit, took 4-5 days.
  • Antiquated equipment caused inefficiencies and delays.
SOLUTION:

As the number one remittance provider, Exela was uniquely positioned to take over and improve the organization’s operations. Utilizing high-speed intelligent scanning and data capture technology, a large portion of the workflow was automated. By digitizing data capture and payment processing activities, and creating a more streamlined approach, fewer workers were required; human error minimized, and deposits expedited. As an additional advantage, the platform supported multiple forms of payments, including check, cash, and credit card.

Exela managed all aspects of the organization’s sponsorship payment operations. The solution began with mail pick up at the local post office; followed by opening, preparing sorting and batching. Next came image and data capture, utilizing advanced intelligent scanning equipment and Optical Character Recognition (OCR) technology. Images were then delivered to the client via an FTP server. Payments are automatically batched; data corrected and completed, and business rules implemented. Exceptions review and reconciliation takes place via a secure, online portal. Deposits are then prepared, along with with ICL and Accounts Receivable (AR) files, and dispatched to the bank. Exela also provided a donation repository archive, so the organization could view images and host their Gift Aid images for HMRC returns.

To assist the organization with its marketing campaigns, Exela  extracted pertinent data from sponsor correspondence to import into its marketing tool. Sponsor data was then uploaded into its customer relationship management (CRM) system. Any opt out customers are identified and flagged, enabling the organization to update customer profiles accordingly.

RESULTS:
  • Decreased payment processing time from 4-5 days to 48 hours
  • Sponsorship data captured from correspondence to inform and enhance future marketing campaigns
  • Significant cost savings by automating traditionally manual processes and replacing outdated legacy systems
  • Greater adherence to regulatory and data security requirements; comprehensive security control framework and oversight
  • Reduction and/or reallocation of labor resources
  • Automated exceptions for faster reconciliation and approval
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Industry Solutions
Unified communications for better billing.
We’ve turned collections into a science.
Additional layer of protection against payment frauds and authorised push payment scams
The next level of AP automation.
Powerful tools for financial tracking, analysis, and visualization.
Explore Exela's Fixed Asset & IT Asset Management Software.
Automated omni-channel payments processing.
Simplifying invoice buying and selling.
Intelligent automated systems streamline procurement.
Lockbox solutions and automated payment processing technologies.
Bringing billers and payers together through secure messaging and flexible payment options.
Smart expense management from the office or the road.
Intelligent tools for managing cash flow & mitigating risk.
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