The accelerating move to electronic payments and ACH has created some curious implications for cash application teams. While on the surface it seems that electronic payments should be easier and faster to process than old-school paper checks, the new ways of providing the corresponding remittance, including via e-mail, have had a potentially negative impact. Instead of leveraging their bank relationships and old-school OCR systems, cash application teams have had to find new ways to process these remittances.

When it comes to achieving 100% automation of email remittance, one needs to consider two aspects. First, how to link email remittances to its payments? In the past, your bank would likely have done this for you. And second, how to extract remittance information from emails?

1. Linking of payment with extracted remittance information
The first step is to identify which payment comes with which email remittance. With paper checks, the images come together, usually linked by the bank index file. With email remittance, you are on your own. Linking payments to remittances can either be automated or done manually. Manually linking all the remittances to payments is time consuming, further delaying the process of cash application.

Using modern methods of data capture such as an Artificial Intelligence-enabled email engine can solve the problems of manual linkage and associated costs and time delays. These A.I.-enabled tools are typically 100% accurate. Using the electronic formats of email as the input, the system will extract all the payment and remittance information accurately, then using simple algorithms remittance are accurately matched with the payments.

2. Extracting remittance information from emails
Without automation, e-mail remittance requires manually reading through the e-mails and attached files and processing the payments. In many instances, teams attempt to use the low level of automation accomplished with OCR technology. In the best case, you would still be utilizing your artistic side by drawing rectangles for each remittance. In the worst case, remittances would be printed first, then scanned and processed with OCR – again, deploying your inner artist to draw rectangles. This is not only manual and labor-intensive, but also introduces the added cost of paper, further stretching your team’s resources and reducing automation.

The irony is that e-mail is one of the most convenient forms of remittance to automate. The data is already provided in electronic form, removing much of the complexity and errors of OCR. The main bottleneck in automation here was that automation required customer-specific templates that needed to be developed by IT professionals. This required an IT project and would lead to delays and added cost.

Cash application system vendors have deployed several different types of solutions to address the problem. One such solution is attempting to repurpose the OCR template-based solution. While this removes the IT bottleneck, it puts the burden of creating and managing templates to the business team. For every new remittance format, the cash application team will have to create a new template. The overall result is that manual effort is being shifted from applying cash to creating and managing templates, which does nothing but defeat the purpose of automation. You have now expanded Template Hell beyond paper checks and into the pristine area of electronic remittance.

The latest technologies are now making use of Artificial Intelligence and Machine Learning to automate e-mail remittance. The A.I. learns how to identify e-mails as containing remittance information by examining keywords and attachments. The system can identify and extract the data fields relevant to cash application. It can do this in situations where the remittance is provided in the body of the e-mail as well as when it is in an attached file. A.I.-based solutions have shown ability to not only eliminate the need to navigate templates but also to achieve optimal automation rates.

E-mail remittance, like other electronic methods for providing remittance, presents a great opportunity to automate. Because errors due to scan quality and paper formatting are inherently avoided, automation rates are able to reach 100%. In fact, during implementations, some of the fastest automation is realized on customers who submit remittance via e-mail. This means that your cash application team would not need to spend any time on customers providing e-mail remittance, saving you a considerable amount of time and money.

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