Accelerating Order-to-Cash with Remittance Processing

Customer clearing processes significantly impact cash flow management and working capital efficiency.

While SAP provides basic customer account management, it lacks sophisticated remittance processing capabilities that automate the matching of customer payments to open receivables. This creates manual bottlenecks that delay cash application and extend DSO metrics.

The Customer Clearing Challenge in SAP

Standard SAP customer clearing requires manual intervention for most payment applications:

• Manual remittance processing: Finance teams manually match payment advice to open invoices
• Limited automation: Basic clearing functionality cannot handle complex remittance scenarios
• Exception handling complexity: Partial payments and discrepancies require manual resolution outside standard workflows

These limitations become particularly problematic for organisations with high-volume customer bases or complex payment scenarios.

Impact on Order-to-Cash Performance

Manual customer clearing creates measurable impacts on financial performance:

Extended DSO metrics: Delayed payment application artificially inflates Days Sales Outstanding, impacting working capital efficiency and cash flow forecasting accuracy.

Resource-intensive processing: Manual matching consumes significant finance team resources, preventing focus on strategic collection activities and customer relationship management.

Customer relationship strain: Delayed payment processing and dispute resolution affect customer satisfaction and may impact future business relationships.

Limited cash visibility: Manual processes provide poor real-time visibility into actual cash position and outstanding receivables status.

BEST’s Customer Clearing Automation

BEST’s customer clearing module transforms payment processing through automated remittance handling directly within SAP. The solution provides:

Automated remittance processing: Direct upload of customer payment advice into SAP with automatic matching to open receivables, eliminating manual data entry and reducing processing time.

Intelligent customer determination: Advanced algorithms automatically identify customer accounts based on remittance line item details, reducing matching time while improving accuracy.

Comprehensive clearing automation: Single remittance processing across customers and company codes, eliminating manual intervention for routine payment applications.

Advanced exception handling: User-friendly tools for managing residuals, short payments, and complex scenarios ensure smooth processing even when automatic matching cannot resolve all items.

Enhanced Processing Capabilities

The BEST remit module includes sophisticated features addressing complex processing requirements:

Multi-format support: Automated processing of various remittance formats, including electronic files, email attachments, and standardised payment advice formats.

Validation framework: Comprehensive validation ensures accuracy by comparing remittance lines against SAP records before processing, reducing error rates and subsequent disputes.

Batch management: Efficient large-volume processing capabilities optimise system performance during peak periods while maintaining processing accuracy.

Statistical reporting: Detailed analytics provide insights into customer clearing performance, enabling continuous process improvement and trend identification.

Measurable Business Benefits

Customer clearing automation delivers quantifiable improvements:

Accelerated order-to-cash: Automated matching and clearing significantly reduce time between payment receipt and cash application, directly improving working capital efficiency.

DSO reduction: Faster payment processing impacts DSO metrics positively, with organisations typically achieving 2-5 day improvements through automation implementation.

Complete visibility: Real-time dashboards provide comprehensive insight into outstanding receivables and clearing status across all customer accounts.

Resource optimisation: Automation enables receivables personnel to focus on exception management and strategic collection activities rather than routine data processing.

Implementation Strategy

Successful customer clearing automation requires a systematic approach:

Payment analysis: Evaluate current customer payment patterns, remittance formats, and exception volumes to configure optimal processing rules.

Integration planning: Coordinate with existing cash management processes to ensure seamless operational integration and maintain control frameworks.

User training: Comprehensive training on automated workflows and exception handling procedures ensures maximum adoption and efficiency realisation.

Performance monitoring: Establish metrics for clearing efficiency, accuracy, and customer satisfaction to track improvement and identify optimisation opportunities.

The transformation from manual to automated customer clearing represents a strategic enhancement to cash management capabilities, enabling organisations to accelerate their order-to-cash cycle while improving accuracy and reducing operational overhead.