The Receivables Race to Maximize Control and Automation Nina Hanselmann Cheryl Lehotyak. MN AFP April 28, 2015

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1 The Receivables Race to Maximize Control and Automation Nina Hanselmann Cheryl Lehotyak MN AFP April 28, 2015

2 Every race consists of key milestones 6. Finish 1. Prepare 5. Pit Stops 2. Know the Course 4. Navigate 3. Accelerate 2

3 Strategy Prepare A/R process and goals The Course Market landscape and trends Accelerate Implement solutions Navigate Achieve process improvement Pit Stops Assess and adjust Finish Line Success! This information represents the opinion of U.S. Bank and is not intended to serve as a recommendation or solicitation for the purchase or sale of any particular product or service. It does not constitute advice and is issued without regard to any particular objective or the financial situation of any particular individual. These views are subject to change at any time based upon market or other conditions and are current as of the date indicated on these materials. Products and services offered may be subject to credit approval. Eligibility requirements, other conditions, and fees may apply. Deposit products offered by U.S. Bank National Association. Member FDIC. 3

It does not constitute advice and is issued without regard to any particular objective or the financial situation of any particular individual.

4 Prepare 4

5 The ultimate goal of A/R Reduce DSO Dispute resolution Deduction prevention Identify at-risk customers earlier Increase working capital Achieve organizational goals Improve cash flow Decrease bad debt Compliance & improved internal controls Improve efficiency Workflow prioritization Centralized customer and A/R information Increase electronic payments and invoices Improve customer relationships More personal client relationships More accurate invoices 5

internal controls Improve efficiency Workflow prioritization Centralized customer and A/R information Increase

6 A/R process Sell Collect Invoice Post Receive 6

7 The course 7

8 Evolution of collecting payments Payment Type Check ACH Wire Credit Card Debit Card Currency Payment Delivery Mail Drop box In-Person Telephone Internet Mobile Integrated Payment Lockbox ACH Origination ACH Received Data Capture Website/IVR Swift Smart Devices 8

In-Person Telephone Internet Mobile Integrated Payment Lockbox

9 % of Check Payments B2B collect vs. disburse automation 100% Electronic B2B Collections 100% Electronic B2B Disbursements 80% 75% 80% 81% 74% 60% 64% 54% 50% 60% 57% 50% 40% 40% 20% 20% 0% % Source: 2013 AFP Electronic Payments Survey 9

B2B Disbursements 80% 75% 80% 81% 74% 60% 64% 54% 50% 60% 57% 50% 40%

10 Barriers to electronic B2B adoption Source: PayStream Advisors: 2015 Electronic Supplier Payments Report, Q

11 Consumer bill payments Source: Aite Group,

12 Consumer bill payment trends Source: Aite Group,

13 A/R factors having a negative impact Source: Integrated Receivables: Solving for Multiple Business Payments Variables - December Group Survey of Senior Receivables and Treasury Managers at U.S. based companies with annual revenues of US$1 billion or more. 13

December 2014 - Group Survey of Senior Receivables and Treasury

14 Accelerate 14

15 Payment options Delivery: Multiple posting files Unrelated file formats Disparate image archives 15

16 Automating inbound EFT s CCD CCD+ & Wire Transfer CTX STP820 CTX EDI 820 Card Disparate Remittance Detail Limited field Characters Easy to use Structured Format Robust details 9,999 Requires exact structure Special Card Programs allow remittance detail to be passed along Image technology Lockbox Providers 16

Structured Format Robust details 9,999 Requires exact structure Special Card

17 Navigate 17

18 Caution flags for EFTs Providing Bank Account Information Receiving EFT Payment Allowing a new path for remittance detail 18

19 Straight-through processed payments Eliminates the need for re-keying Reduces manual intervention Creates efficiency Remittance Detail Payment Auto Post 19

20 STP Payments Straight-through processing What percentage of your receivables are processed as straightthrough transactions? <50% 50-69% 70-89% >90% >90% 70-89% 50-69% <50% 0% 10% 20% 30% 40% Corporations Source: Aite Group, LLC, Insights Into Corporate Receivables August

<50% 50-69% 70-89% >90% >90% 70-89% 50-69% <50% 0% 10% 20% 30% 40%

21 Technology What is integrated receivables? Analytics Integrated Exceptions Client Portal Consolidated Receivables Reporting Source: Celent Receivables in Motion, November 2014 Perceived Value 21

22 Pit stops 22

23 Where are we in the process? Searching for a solution Progress, but opportunities still exist Optimized How do I get started? 23

24 End-to-end process review Sell Invoice Receive Deposit Post Exceptions Collect 24

25 Your partner should listen to you Understanding your business culture and methods is vital YOUR SOLUTION 25

26 What is the Cost ROI? Traditional payment improvement Electronic payment improvement Process improvement 26

27 The finish line 27

28 Receivables race strategy Prepare A/R process and goals The Course Market landscape and trends Accelerate Implement solutions Navigate Achieve process improvement Pit Stops Assess and adjust 28

29 Finish line = A/R synergy System Integration Banking Partner A/R Payment Collection Strategy 29

30 How to win the race 30

31 Thank you! Nina Hanselmann Vice President, Working Capital Consultant Treasury Management U.S. Bank Cheryl Lehotyak Vice President, Receivables Solutions Consultant Treasury Management U.S. Bank

Lean Mean Receivables Machine

Lean Mean Receivables Machine Jesse Sandoval, AAP VP, Senior Product Manager Union Bank Nancy Atkinson, CCM Senior Analyst Aite Group Carolyn Swafford, CTP, AAP VP, Treasury Management Solutions Advisor