Blog by Frederik Ahring Larsen
The fully automated payment factory where everything just happens automatically is a dream to many finance directors and for AMC as well. But many underestimate the level of automation you can achieve today, using standard AMC Banking and a Host-to-host solution.
AMC Banking handles 3 main areas of cash management
- Payment Exports
- Bank Statement imports and posting
- Bank Account Reconciliation
So, let’s take a deeper dive into what can be achieved in these areas with some batch jobs and some slight of hand.
Payment exports:
Another day another batch of payments to be paid. Following my daily routine, I should:
- Create a new journal for my payments
- Choose my bank
- Search out open invoices
- Look through it
- Validate it
- Handle errors
- Approve it
- Send it
Well, that’s one way, I could of course also start the integrated batch jobs that mimic the behavior of your payment clerk. Automatically search out payments on a given date range, perhaps with a specific filter. The system will then automatically create journals, and if there are any errors it can move erroneous lines to a new journal.
Of course, AMC Banking automatically choose correct payment type using our best practice logic and the correct bank account based on the priority setup.
In this way, my daily tasks get simplified to the following:
- Approve my journal to send automatically to the bank
- Handle the errors that has been moved to another journal
Simplifying your tasks to these two steps means you can work more efficiently and valuably, and only spend time on what matters.
Import of bank files and settlements
If you have a direct communication, you can import bank files automatically; if you have an Enterprise solution you can automate it with batch jobs.
Why only with an Enterprise solution?
Plus solution host-to-hosts logs into the bank and pulls bank files when you press the “import bank file” button. This will require a user’s login credentials to do so. If you have an Enterprise you can set up automatic imports on your dedicated XtendLink through automated jobs, that means that the ‘import bank files’-button doesn’t log into the bank, but simply imports from XtendLink which allows for the batch run.
Having a batch job to import your statements means that when your finance department get to work in the morning, we will have imported the bank files and ran the auto-match already, and perhaps (if enabled) already posted lines marked as ready.
That means that all your team need to handle is the payments that couldn’t be matched automatically, for example customers who have paid over or under their invoice amount.
This again eliminates the need to tedious tasks that the system can handle, and instead focus on the tasks which provide value to your company, namely figuring out who paid their invoice wrongly.
Bank account reconciliation automation
We start off with a bold message to set the mood: Bank account reconciliation should automatically run no matter what, there are simply no reason to spend unnecessary time on this if it can be avoided.
Now, the quality of the automatic bank account reconciliation (read: how much is automatically reconciled) might differ based on your choices.
- Do you use your CAMT.053 Account statement as the basis of your Posting Journals?
- If not; how do your bank collect fees?
The basis of a posting journal is traditionally a CAMT.054 Credit/Debit Specification, which contains all vendor payments or a file containing all customer payments. These have traditionally contained the most information and therefore mostly been first choice to post payments from.
For 90% of all banks this is not the case anymore, and a CAMT.053 contains at least as much data about individual transactions as a CAMT.054. Therefore, it makes sense to have AMC convert the CAMT.053 into a CAMT.054. The reason for doing this is that you get all the extra transactions into your posting journals as well, this could be bank fees, salary payments, tax payments etc. Which can usually be caught by search strings.
Why am I talking about posting journals in the reconciliation section?
Because if you use the same basis to post your payment (CAMT.053) as you do to reconcile your bank account, you will achieve a completely automatic reconciliation process. If every single transaction is posted in the posting journal, the system can automatically run the reconciliation and will only notify you if something has been deleted or wrongly added.
If you are forced to use CAMT.054’s or similar payment specification files, you might benefit from asking the bank to collect fees once a month, that way your reconciliation will run smoothly until you have to handle the summarized fee once a month.
Now I’ve gone through the best way of automating daily processes. It’s not a 100%, but if done correctly it gets quite close. Our goal in developing the AMC Banking module is to ease the workload of your finance department and achieving a symbiosis between those who know your business inside-and-out, and us handling menial tasks. Your finance team should not spend time pressing unnecessary buttons and handling unnecessary tasks; they should spend time improving your business flows, saving cash, and taking strategic decisions.