[ CRF SAP RM User Group 2015 Houston, TX ] How to Enhance SAP Lockbox with Artificial Intelligence to Maximize Cash Application Automation

Transcription

1 [ CRF SAP RM User Group 2015 Houston, TX ] How to Enhance SAP Lockbox with Artificial Intelligence to Maximize Cash Application Automation

2 Presented By Jay Tchakarov AVP, Product Management HighRadius Corporation

3 Agenda SAP Lockbox overview History of automation What is A.I.? A.I. and cash application

4 Overview of the Standard SAP Lockbox Program

5 SAP Lockbox Program What does the SAP Lockbox Program do? Import and read bank transmission file Create Payment Advice per check Lockbox does not do the posting Final posting is done by the FI document posting program (SAPMF05A)

6 SAP Lockbox Program What input is required by the program? Accepts BAI/BAI2 files Can also accept EDI 823

7 Importing a BAI/BAI2 file to the Lockbox

8 SAP Lockbox Program What is inside the BAI/BAI2 file?

9 SAP Lockbox Program What is inside the BAI/BAI2 file? The 6 Records: Check Dollar amount MICR number Check number The 4 Records: Invoice number Invoice open item amount (gross) Deduction amount External Reason Code

10 SAP Lockbox Program The 6 Records - Inside the BAI/BAI2 File Record Type Batch # Batch Item Check Amt Routing # Account # Check # Header Reference Record Type Batch # Batch Item overflow record sequence # end indicator invoice number amount deduction reason code xref Check data available here

11 SAP Lockbox Program The 4 Records - Inside the BAI/BAI2 File Record Type Batch # Batch Item Check Amt Routing # Account # Check # Header Reference Record Type Batch # Batch Item overflow record sequence # end indicator invoice number amount deduction reason code xref Invoice level data available here

12 SAP Lockbox Program What does it accomplish? Depending on configuration: A/R document posting (credit customer account, debit lockbox) G/L document posting (credit lockbox, debit cash account) Standalone deductions (on account debit) Invoice-related deductions (residual debit)

13 SAP Lockbox Program Final Status in Post-Processing Applied Customer identified and check has cleared all document numbers provided. No further processing is required. Partially Applied (BAI2 only) Customer identified and check has cleared one or more document numbers and posted remaining difference on customer account for further processing directly. On-Account Customer identified via MICR but no document numbers could be found so the full amount of check is posted on customer account for further processing with advice. Unidentified Customer could not be identified through bank information or document numbers so check remains in the unapplied payment clearing account.

14 SAP Lockbox Program Final Status in Post-Processing Status displayed against payments

15 SAP Lockbox Program Final Status in Post-Processing Option to Post only Applied payments directly

16 Why is the Lockbox Program incomplete?

17 SAP Lockbox Program Traditional Automation Rates by Remittance type EDI Low Check Stubs Remittance Online Portal High Variation in data formats across customers leads to traditionally low automation rates in these remittance types

18 SAP Lockbox Program What information is essential for the program? Customer Identification MICR identifier or document number(s). 1. Ability to identify a specific customer from its MICR number 2. Without a MICR, identify the customer by document numbers Invoice Identification Document identifier 1. Reference to document or invoice number against payment

19 SAP Lockbox Program What is the Lockbox Program not good at? Limited Matching Capability It does not match on anything besides Document number (BELNR) or the value in Reference number (XBLNR - treated as text) No Fuzzy Logic Such as matching on items in a specific overdue aging bucket without any document/reference numbers remitted Does not do actual posting It simply enables the standard posting program (SAPMF05A) to find the right items to clear (with limited accuracy)

20 ? Finding the Right Answer

21 First Solutions Add Resources / Outsource

22 Option 1: More People

23 Option 1: More People DRAWBACKS Expensive Keying Fees Slow to recruit and train Employee Turnover

24 What next? Automation! Add Resources / Outsource Template-based Automation

25 Classic Templates Data extraction based on template definition

26 But

27 Different Customers. Different Formats.

28 Option 2: Custom Templates DRAWBACKS Expensive IT development needed Slow IT project required Also for each new customer Hard to maintain Not cost-effective to fully automate

29 The Answer Artificial Intelligence Add Resources / Outsource Template-based Automation

30 Artificial Intelligence

31

32 How AI works? Experience, Past Results

33 How AI works? Experience, Past Results Intelligence, Learning

34 How AI works? Experience, Past Results Intelligence, Learning Intelligent Automation

35 Why Artificial Intelligence(AI)? Intelligent Learning Smarter over Time

36 Low-Value Tasks Low-Value tasks dealt with in Cash Application Looking through for remittance Checking and makings sense of attachments Logging in, finding, downloading remittance from portals Making sense of EDI and BAI2 files (Yes! Some still look at these manually!) Scanning and getting info out of remittance images Following repetitive rules to match to invoices

37 Power of Artificial Intelligence Cash Application Tasks enabled with Artificial Intelligence Payment and remittance advice aggregation Support for multiple remittance documentation formats (EDI, , Web, paper) with Excel attachments body with Textual PDF attachments Websites Checks/Paper remittances HighRadius Corporation

38 Eliminating Templates

39 Lockbox Processing with AI Check ACH EFT Data Aggregation Artificial Intelligence Framework Payment Formats Remittance Formats EDI Check Stubs Remittance Online Portal Business Rules BAI/BAI2 for SAP

40 Examples

41 Intelligent Remittance Capture Multiple Remittance Formats

42 Parsing Cash Application Automation HighRadius Corporation

43 Extract Customer and Remittance data from Body, Subject, Sender domain

44 Remittance Details HighRadius Corporation

45 Remittance details sent by the Customer in the Body of the auto-forwarded to a secure HighRadius Payment Information sent in the body of the HighRadius Corporation

46 Remittance details sent by the Customer in the Body of the Payment Backup extracted from the body of the and loaded in the system HighRadius Corporation

47 Remittance details sent by the Customer in the Body of the Payment Backup processed in the system HighRadius Corporation

48 Extract customer remittance data from attached Excel files, text files and pdf files

49 Bank Deposit Details HighRadius Corporation

50 Payment Details HighRadius Corporation

51 Remittance details sent by the Customer as a CSV attachment in the forwarded to a secure Account Payment Information sent in the attachment of the Customer identified by running rules on Subject line and Domain Name HighRadius Corporation

52 Remittance details sent by the Customer as a CSV attachment in the HighRadius Corporation

53 Remittance details sent by the Customer as a CSV attachment in the Payment Backup extracted from the attachment of the and loaded in the system HighRadius Corporation

54 Remittance details sent by the Customer as a CSV attachment in the Payment Backup processed in the system HighRadius Corporation

55 Check Remittance processing via OCR

56 Optical Character Recognition (OCR) Cash Application Automation HighRadius Corporation

57 Remittance Batches Each batch is run though the OCR engine proactively to capture electronic data 57

58 Remittance Images per Batch System capture various Statuses. If Success, user does not have to review Each remittance image is processed via OCR 58

59 Teaching the AI to Process OCR Remittance Raw extracted data Validation Logic Transformed Data 59

60 Rules for Auto-Matching

61 Solution Architecture Cash Application Automation HighRadius Corporation

62 Intelligent Partial Invoice Matching

63 Intelligent Partial Invoice Matching Customer sends a Partial Invoice Number

64 Intelligent Partial Invoice Matching Partial Invoice Number matched to the actual Open Invoice Number

65 End Result?

66 SAP Lockbox Program Highest-level Automation Enriched EDI or BAI2 file High levels of automation (and improving!) Cost-effective Fast to implement Low maintenance cost

67 What is Next? Artificial Intelligence Add Resources / Outsource Template-based Automation

68 What is Next? Enhancements to A.I. with predictive modeling to automate non-remittance customers. Artificial Intelligence Add Resources / Outsource Template-based Automation

69 ? Questions

70 [ CRF SAP RM User Group 2015 Houston, TX ] How to Enhance SAP Lockbox with Artificial Intelligence to Maximize Cash Application Automation