Deploying Workday: Inefficient Banking and Settlement Processes
As companies grow, their employees, suppliers, and customers all grow exponentially. What worked when the volumes were low does not scale as business increases.
A great example of this is in banking and settlement where companies are now processing thousands of transactions on a monthly basis. Due to the high number of manual tasks, there is a controls risk to have payment files consistently downloaded and then uploaded into bank portals.
CrossCountry pays three primary groups: suppliers, employees and sub-contractors. Today, the process is manual. As source transactions, such as expense reports and invoices, are processed and approved, the Accounting team manually creates multiple settlement files a week. The settlement runs create payment files that the Accounting team downloads and then uploads into the bank’s portal. Some groups are only paid by check, which requires a manual check run and then positive pay confirmation updated manually on the banking portal.
On the inbound side, the cash application team reviews the bank statement daily and determines if any cash payments have been received. If so, they then collect related payment information, find the corresponding Accounts Receivable entry, and apply the cash manually.
How Workday Can Help
With Workday, CrossCountry will be able to greatly improve our banking and settlement processes.
Whether the payments are for employee expense reports, payroll, or supplier invoices, the settlement engine in Workday is the one central place to control the process. After the source transactions are approved, they flow to the settlement engine where the accounting team will review and approve the settlement run, the payment files are automatically sent to the bank for processing, the check file is sent to the printer, and positive pay is automatically sent to the bank with no manual intervention.
For cash applications, a daily lockbox file that will have the electronic deposit and payment information will be received by Workday and then automatically apply payments to receivables overnight. The next day, most of the cash will have been applied, enabling a focus on the match exceptions that did not process. Workday can even be configured to write-off small remainder amounts for short payments, which saves time and effort clearing out pennies that may remain on a receivable.
Finally, the bank reconciliation process will also be automated. Workday will receive the bank statements and automatically match those to cash transactions and record any bank actions that occurred. Workday provides the ability to create First Notice Rules in order to help identify specific first-time transactions from the bank (e.g., fees, interest paid and earned) which are then recorded and booked in the system – fully automating the bank reconciliation process.
To learn more, view our guidebook, “Learning from Our Journey: 3 Ways that CFOs Can Benefit from Workday”