Many companies suffer through cash application being done manually from lockboxes. To combat this problem, XSE Group decided to automate the cash application process. Automatic cash application has helped the company improve accuracy, save time, and remove all data entry from Accounts Receivable operations.

About XSE Group

XSE Group is a leading wholesaler of imaging products, with a selection of OEM and compatible printer, fax, copier, and data media products. They also offer print management solutions that integrate the sales, service, and supplies of printing.

XSE Group has been in business for over 20 years and has had revenue growth of 40 percent over the last four years. The company has three distribution center models in Connecticut, Tennessee, and California. Two of these three warehouses opened within 18 months.

The company operates under four brand names—ImageStar, Printer Essentials (wholesale), Aztec (leasing and service), and Tonerworld.com (direct to consumer).

XSE Group started running JD Edwards in 2000 and is currently running on release 9.1. Currently, the company has 86 users on the system. Within JD Edwards, XSE Group is running Financials, Distribution, and an integration with a custom WebSphere application for web-based orders.

The Problem

XSE Group’s previous situation consisted of a highly transactional environment and invoicing to JDE Accounts Receivable from Sales Orders. They imported AR from a secondary ERP system, which was imported daily through Z table (F03B13Z1). This included contract billing, sales orders, and service orders. Credit card solution posted payments automatically, but all checks went to a lockbox and were posted manually. It took an average of four hours each day but could sometimes take up 12 hours a day.

The posting process looked like this:

• Notification of lockbox received from the bank
• Download and save the PDF of scanned check
• Manually enter receipts into JD Edwards
• Select invoices from remittance

The Solution

XSE Group was looking for a solution that would allow them to do away with the manual process of getting the checks from the lockbox. This led them to automate the processing and matching of lockbox checks.

In order to automate the posting process, XSE Group needed to transform check and remittance data into usable data, upload it into the standard JD Edwards automatic receipts Z table (F03B13Z1), and run standard JD Edwards UBEs to process and post cash observing AR and cash policies. In terms of materials and tools, XSE Group knew that they needed to receive lockbox scans from the bank, OCR technology to transform checks and remittances, and an interface to verify OCR and correct failed matches. XSE Group needed to be able to receive bank data and images and utilize OCR technology to turn it into usable data. They also needed the front-end application to confirm, validate, and fill in blanks in the data.

XSE Group selected Billtrust’s Cash App Connect for two major reasons:

1. The vendor provided services that exactly matched XSE’s needs.
2. The cost/pricing was in line with the expectations and ROI model.

Billtrust’s Cash App Connect uses OCR technology to capture data from checks and remittances. It also uses MICR to identify, capture, and store bank information, digital images, and metadata. This means that there is no need to file or digitally store it all onsite. The vendor also matches remittances to open AR and uses algorithms similar to those in JD Edwards. Of remittances, 80 percent are fully matched with no need to review. When there are exceptions, they are usually just one click.

Implementation Phases

There were four phases of XSE Group’s implementation project:

1. Prepare
2. Deploy
3. Go Live
4. Support

The steps of the prepare phase included:

• Project kickoff
• Defining roles
• SFTP connectivity
• Receiving client deliverables
• System configurations
• Automating file transfers
• Data file ingestion in ERP

The steps of the deploy phase included:

• Training
• End-to-end user acceptance testing
• Processing payment data including template building
• Validate ERP posting and reconciliation

The steps of the go-live phase included:

• Cutting over to production
• Introducing the client services team
• Monitoring production activity

The steps of the support phase included:

• Client services providing ongoing application support

After implementing this automated process, XSE Group saw a 75 percent reduction in time spent posting AR. This reduction came from using better check posting procedures. The project was successful because XSE Group defined clear project management goals, a detailed plan and rollout schedule, and used the right tools for each task. They also had buy-in from all parties involved.