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  What’s the problem?
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  Where can I find more information (educate myself) on this topic?
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  What are the implications for faster payments?

Some corporates may not be able to take advantage of faster payments remittance information. At issue is whether their ERP systems and other legacy processes can handle individual and batch-specific transactions – among other challenges. For corporates to leverage the full potential of faster payments, they need to have two fundamentals: 1) the ability to implement Straight-through Processing and 2) the ability to reconcile payments same day and/or in real time. Relationships with multiple financial services providers further complicates this, as each provider may have different specifications that require various systems and technologies.

If payments are posting same day or in real time, AR departments need to be prepared to credit customer accounts in a timely fashion. Data contained in the payment also needs to flow into the right areas at the same speed, ensuring that information is not lost or delayed, especially for payments being made shortly before due dates. Updating of reconciliation-related business processes need to take this into account. AP departments also need to be taught that certain payment types, such as same day ACH or instant payments, allow for more flexibility in terms of liquidity management and the need to make payments, which in turn requires corporates to update legacy business processes. Whether a corporate can justify the required system upgrades also needs to be thought through and the degree to which a business case and ROI can be calculated will differ substantially from business to business.

With the introduction of faster payments, funds will be available more quickly. That also means liquidity management will become more complex as the timing and frequency of payments increase. Corporates should assess their internal controls with certain considerations in mind, such as what enhanced information will be needed now that payments will be accepted 24/7/365, and which processes will need to be changed to handle STP and real-time updates of client accounts?