Current Trends in Paperless Receivables

"Global News & Views" spoke with Craig Vaream, Managing Director, J.P. Morgan Treasury Services, about current trends in receivables. As the product executive for receivables, Mr. Vaream is responsible for lockbox, Receivables Edge^SM, Virtual Remit^SM, Pay Connexion^SM and Healthcare Link^SM products. His responsibilities encompass product development, strategy, pricing, profitability and distribution.

GN&V: What are the major trends driving the growth of paperless receivables solutions?

Vaream: The movement to paperless receivables is being driven by three factors:

1. The need to become more efficient, especially in a tough economic cycle. Clients whose working capital is constrained because of current economic conditions are particularly interested in enhancing their efficiency and reducing the costs associated with processing transactions – and they want to have the ability to collect funds at a faster rate.
2. The need for better risk management and business continuity programs. Paper documents expose organizations to business risks, from natural disasters to unauthorized viewers of confidential information.
3. Advances in electronic technology. Today’s technology allows for crystal clear, scanned images. I believe we will continue to see technological advances that will make it more efficient to present invoices and remittance documents electronically, as well as to pay them electronically.

GN&V: Are global companies, such as multinational corporations, facing particular challenges?

Vaream: Yes, they are. Typically, multinational corporations use different financial institutions in different countries. Each institution usually has a different process, which makes consolidating receivables information, as well as collecting it efficiently, more challenging. As a result, if you ask the treasurer of a multinational corporation about a company’s current receivables position globally, he may not be able to quickly pull that information together.

GN&V: How does J.P. Morgan help clients overcome these challenges?

Vaream: Our receivables capabilities allow clients to go to one website to collect their global receivables information. Today, clients can view their North American remittance information on Receivables Edge, see much of their Asian and European remittance information and view their current receivables positions for the business – no matter where in the world they are located.

GN&V: Can you tell us more about the solutions you offer and the benefits that clients receive?

Vaream: We offer several different capabilities to help clients improve receivables and collections and become more efficient globally.

Among these is Receivables Edge, an online receivables management service that gives clients a consolidated view of their receivables. Right now, it is used in the U.S. and Canada, while clients in APAC and EMEA have more limited access. Later this year, we will be building out a comprehensive functionality across the globe that will incorporate Latin America, Asia and Europe; in fact, by year end, Receivables Edge will be available in 13 languages. Receivables Edge has the ability to automatically match invoices to payments, and its auto-reconciliation capability greatly reduces the need to manually reconcile payments.

Another feature — Virtual Remit, a remote deposit capture capability — gives clients the ability to scan transactions and deposit them electronically into their lockboxes.

GN&V: What types of organizations are interested in an integrated receivables offering?

Vaream: Many organizations can benefit from having integrated receivables capabilities, but those with multiple locations and subsidiaries benefit most. We consolidate the reporting and information so clients can more easily understand their cash position and deploy funds effectively. In addition, our solution provides local clearing capabilities, in all countries in which we have a receivables presence.

GN&V: What’s unique about J.P. Morgan’s receivables services?

Vaream: J.P. Morgan offers clients the ability to approach their receivables process holistically. Our in-depth knowledge of the remittance processing needs of various industry segments allows us to share best practices with our clients. We take a consultative approach, working to understand our clients’ unique needs, benchmarking them against industry peers, and advising them on ways to become more efficient. We also keep them updated on changing regulations that may impact their organizations. Finally, we focus on long-term strategies and work with them to plan for the future – always bearing in mind the advantages technology can offer.

GN&V: If you had one suggestion related to receivables to give clients, what would it be?

Vaream: Focus on moving from paper to electronic! Regardless of country or geography, paper processing is always more expensive and puts you at greater risk for fraud. When we work with clients, we look closely at how they are collecting payments. Are customers walking into locations to pay bills? Are they mailing payments in? Do they have an online presence? Do their customers have access to it? What steps have they taken to incent their clients to adopt electronic channels? There are techniques clients can use to encourage customers and vendors to use electronic payment methods, such as “Go Green campaigns.” Moving to electronic payments while simultaneously having a positive impact on the environment is a message that resonates with many.

Learn more about our receivables products here