It's imperative that Baird book receivables both quickly and accurately. “Through our online platform, customers see funds hit their account same-day,” Huse says. “If something was keyed incorrectly, that mistake would be very visible. There was the potential for a six- or seven-figure error because someone had fat fingers. And if we had to kick funds back to a client because we didn't get proper information to apply the payment, that also would be a client-service nightmare. Our business is predicated on excellent customer service, so any issues around applying funds would create a significant reputational risk for Baird.”

When the company decided to deploy a new treasury management system, automatic posting of electronic payments was front and center in the list of requirements. “We saw that bringing that workflow into the workstation could remove some of those points of risk,” Huse says. The company wanted to go with a software-as-a-service (SaaS) treasury system, both to reduce the burden on the internal IT team and to streamline upgrades to the system. “As a company, we've made a concerted effort to move toward SaaS-based solutions whenever those alternatives are available,” Huse says.

The challenge was that Baird's desire for an automated receivables-posting process would require customization, something many SaaS vendors shy away from. The treasury team launched the project by collaborating with internal IT to determine how the posting process should be configured. “Our treasury analysts worked with a system architect to whiteboard our preliminary thoughts on how the system should work,” Huse says. “We invested a tremendous amount of time in determining what was and wasn't feasible.” They ultimately came up with the idea of using an application programming interface (API) to connect the new treasury workstation to both the company's banking portals and its internal customer database, for reconciling account information.

Baird didn't find any SaaS-based treasury systems that provided these types of connections. However, a thorough due diligence process revealed that GTreasury was interested in accommodating the company's needs. The vendor provided a proof of concept to demonstrate how the system could work, and Baird decided to move forward.

GTreasury heavily customized the automated receivables-booking processes in its system to accommodate the unpredictability of information surrounding Baird's incoming payments. Now, when Baird receives a BAI file from a bank, the system uses a heavily modified transaction assignment engine to parse through the file to find each payment's associated Baird customer account number. “It starts by looking for an identifier like 'account' or 'reference' followed by the appropriate number of digits,” Huse says. “I think this type of functionality is fairly common.”

What's more unique is that when no identifier is clear, the customized workflows enable the system to continue searching for the customer account number. “A BAI string might contain hundreds of number sequences that could possibly be a match,” Huse continues. “An account number search might run right into phone numbers or other strings, and there's no easy way for the system to determine which digits make up the customer account number.”

When the system encounters such a conundrum, it queries a database containing current Baird customer information. “The engine will send all possible account numbers through an API call to the database,” Huse says. “Assuming there's a match, it'll send a message back to GTreasury with the portion of the string that is an accurate account number. It can also do a secondary match with other information from the account record, such as last name.” When the rules engine is confident it has the correct customer account, GTreasury automatically books the funds to the right account in the general ledger (G/L).

See also:

• Webcast: Successful Treasury Transformation and Innovation through Technology Excellence
• Extending Visibility and Productivity for Extended Payment Terms
• Retooling Processes to Improve Productivity and ROI

Around 90 percent of all receivables are now eligible for straight-through processing. “The treasury team is responsible only for dealing with exceptions now,” Huse says. “Most days, those number between a half-dozen and a dozen.” This has greatly reduced the amount of staff time required to deal with booking payments, so the treasury team is better able to focus on strategic activities.

“We have more time to spend on value-added tasks like reporting and forecasting,” Huse explains. “We also now have more time to support our financial advisers and their clients when they have FX [foreign exchange]-related questions. And we can focus more on analyzing the company's investment potential and intraday borrowing needs.”

He also credits the new processes with making Baird's business more scalable. “We went from about $178 billion in assets under management in 2016 to around $211 billion today, and we haven't added headcount.”

One more benefit is that the new workflows have reduced the risk of errors, in booking funds to the wrong customer's account or in the wrong amount. “We've built a lot of controls and standardization into our workflows,” Huse says. “Those are two tremendous benefits of any treasury management system.”

Still, he says, finding the right vendor and working to customize the solution were crucial to the project's success. “These systems aren't one-size-fits-all,” Huse advises. “You need to dig below the surface of the solutions you're considering and have deep conversations with the vendors. You have to determine whether the project is a good fit on both sides.”

Just as important, he adds, is finding a vendor that is willing to work to meet the company's unique treasury challenges. “Having really good collaboration with the vendor makes or breaks a project like this,” Huse adds. “It's very important to challenge the norms. Treasury needs to think creatively and partner with internal colleagues and internal clients to come up with ideas for better treasury solutions, and then find a vendor that will help bring those ideas to fruition.”