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Three Reasons to Optimize Treasury Management As Customer Payments Evolve

Amy Kerin's picture
VP of Treasury & Platform Design, Fiserv

Amy Kerin is VP of Treasury & Platform Design who partners with the product and development leaders in Fiserv Biller Division to ensure that money movement, settlement and reconciliation are...

  • Member since 2020
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  • Aug 27, 2020

The COVID-19 pandemic has forced organizations across industries to adapt to disruption like never before, and utilities are no exception. As the global health crisis has caused financial upheaval for businesses and consumers alike, now is an ideal time to assess and “future-proof” your treasury management with lessons learned from the pandemic.

As unemployment levels rose due to state shelter-in-place orders and business closures, many utilities responded by suspending service shut-offs for non-payment, recognizing some of their hardest-hit customers had to choose which bills to pay as incomes dried up. Those struggling customers who continue to pay their utility bills as the economic effects of coronavirus linger don’t have much room to cut expenses.

It’s more critical than ever for utilities to reconcile payments in a timely fashion to accurately track which customers have paid and which haven’t. If a customer has paid, and the utility doesn’t record it properly, it could result in frustration, service disruptions or even future payment delinquency.  

While COVID-19 put the spotlight squarely on the need for rigorous reconciliation processes, ongoing trends in bill payment require utilities to double down on optimizing their treasury management. Here are three ways the payments landscape continues to evolve – and how your organization’s treasury function can stay ahead of the curve.

A Proliferation of Payment Methods

As consumers continue to embrace the growing number of bill payment options, they are also becoming more comfortable with platforms like digital wallets, according to the Fiserv 2020 Expectations & Experiences: Consumer Payments survey. Utilities and other companies are meeting this growing demand by offering customers a growing array of choices for how they pay their bills. Yet this plethora of payment methods can present new challenges.

With each new payment type added, the complexity and amount of work required to perform timely and accurate reconciliations grows. Even the variations in end-of-day cut-off times for funds, which vary across credit cards, debit cards, automated clearing houses (ACHs) and their networks, adds complexity to the process of matching cash received to payments posted. This can hold up daily settlements, cause posting delays and adversely affect the customer who may receive an erroneous warning or service disruption despite having paid their bill on time.

Your treasury department’s reconciliation methods must be flexible enough to accommodate the expanding list of payment methods. Legacy processes and platforms, and doing something “because we’ve always done it that way” won’t work anymore. Systems and teams must be nimble and adaptable as the payment landscape continues to evolve.

The Importance of Daily Reconciliation

Daily “to the penny” reconciliation has never been more important. It’s not enough to reconcile on a weekly basis or get to a minimum threshold and call it “good enough.” Even a small dollar amount can quickly compound into a major deficit in light of today’s kaleidoscope of payment methods and corresponding end-of-day payment cut-off times. 

While it’s one thing to strive for daily reconciliation, the key driver of that will be having the right data available to your back-office reconciliation staff. That data will help with in-the-moment reconciliations, and insights from it can help spot trending issues and allow for proactive solutions.  

As an example, monitoring chargebacks and returns can reveal problems that can be quickly fixed, and even more importantly, help prevent or reduce returns, as those exceptions can be costly. Potential costs include increased customer calls to correct their billing, and, in cases where consumers have alternative energy options, the loss of a customer.   

Staffing for the Future

In this new billing and payments landscape, utilities must be sure that their treasury and finance functions have the right staff in the right positions to handle the increasingly complex payments picture. Staff accountants and reconcilers need to evolve into problem solvers – money researchers who can assess a situation, determine what went wrong and recommend corrective action. This is increasingly important because one thing that hasn’t changed is that the money tells the story. Beyond the files and reports, the cash trail is really the story of what happened. Your treasury and reconciliation staff are the ones closest to that cash, so they must have the best understanding of the flow of funds, and they should be the ones you turn to for detecting and correcting problems.

This new breed of reconciliation expert may work with developers to fix a problem or with account management to get the full story, and explain it to the customer – including what is being done to fix the problem.  

As you look for these “internal consultants” within your treasury team, some may not be your up-and-coming superstars. Consider your longer-term employees with the historical experience needed to recognize problems and apply their institutional expertise to quickly resolve reconciliation issues.   

Putting it Together

Charged largely with managing the cash flow of business operations, your treasury department can be considered the lifeblood of the organization. As payment methods proliferate, that function must evolve, optimizing your reconciliation process and ensuring that the right team is in place – today and into the future.


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Amy Kerin's picture
Thank Amy for the Post!
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