Importance of Automated Reconciliation System For Corporate Collections

Importance of automated reconciliation system for corporate collections

Automating the reconciliation process of corporate accounts can boost the speed of one of the most time-consuming tasks in any finance and accounting department. Without a doubt, manual reconciliation is the least efficient process in a company. Still, many medium to large organizations manually reconcile thousands of accounts during the quarter-end or month-end. More than 6 in 10 companies rely on manual methods to determine whether adjustments are needed. This exposes the organization to missed or lost reconciliation’s, non reconciled accounts, and lack of justifiable data.

Where does automated reconciliation help

Yes, Excel is great at some tasks, but it also has many limitations which make it prone to mistakes. Excel can become cumbersome at times, especially when you have to deal with a hundred different account tabs introducing complexities due to multiple simultaneous users. At the end of the day, manual interception can induce errors up to 1 to 2%. To protect the organization from committing any expensive errors, finance departments have increasingly recognized the need for an automated account reconciliation platform.

Where Does Automated Reconciliation Help

Automation can help to simplify and expedite corporate reconciliation’s while ensuring accuracy and saving time. Repetitive tasks such as transaction matching can be taken care of by the software.

  • Bank reconciliation: It helps to keep a track discrepancy in your own organization’s bank statement and that supplied by the bank. The software speeds up the process.
  • Accounting for foreign currency: If you deal with multiple foreign currencies and monthly rates, the software can help convert and manage these figures, reconciling any differences.
  • Approvals of the balance sheet: The automated solutions replace manual steps, enabling you to keep track of all accounts, regardless of the number of companies, banks, business, and accounts.
  • Multiple company & supplier accounts: The software can handle a number of companies, currencies, and accounts thereby simplifying a seemingly complex reconciliation process.

Benefits of Automated Reconciliation Platform

  • Processes a large volume of transactions per day on a highly scalable platform.
  • The system does not need a human resource to handle the responsibility.
  • The system records all the data in the form of reconciliation history so that you don’t miss the trail.
  • Handles all transactions and account types.
  • The efficiency remains consistent irrespective of the number of companies, suppliers, banks and accounts.

Finally, the biggest benefit that can come out of automation is time-saving, which is akin to saving money in a long-term. Mindgate is a reconciliation platform solution provider, designed to simplify the reconciliation against collections and receivables… It is an end-to-end solution that loads source files, matches transactions from multiple sources, manages exceptions, resolves conflicts, generates file reports, and uploads files to hosts and interchanges.

What Is A Payment Aggregator And Why Would You Need One

What Is A Payment Aggregator And Why Would You Need One

Payment aggregation, also known as merchant aggregation, is a business model in which a third-party payment provider is also known as the ‘payment aggregator’ signs up merchants directly under its own merchant identification number (MID) to process transactions through a single master account. For example, Google Pay, Amazon Pay, PayTM etc. One merchant account is used to represent a number of merchants opposed to the traditional model which disburses a merchant account to each merchant. Merchants processing transactions under an aggregator are known as sub-merchants.

In simple terms, a payment aggregator empowers merchants by providing them the means to accept credit card payments and online money transfers without an individual merchant account with a bank or financial services provider.

How an Online Transaction Takes Place?

How an online transaction takes place?

In an online transaction, there are typically 3 parties involved.

  1. Customer
  2. Merchant
  3. Payment aggregator

Let’s say, a customer wants to recharge his cellphone online. In this case, the customer will either go to the official website of the service provider or he would choose to recharge from a third party application.

The dashboard essentially consists of a list of various mobile phone service providers from where the customer can select his provider, choose the amount and proceed with the payment.

The customer can choose any of the online modes of payment such as a credit card, debit card, net banking, wallet etc. The payment aggregator provides the customer with a dashboard consisting of an array of banks and payment options to choose from. The customer then selects the relevant option and proceeds with the payment.

All this happens in a fraction of a second. In reality, the customer pays the aggregator and the aggregator pays the merchant. Digging further into the technical aspects of this process, the payment aggregator platform requires a payment gateway to receive online payments. The gateway encrypts the data to keep it private and sends it to the payment processor. Further, the payment processor sends a request to the customer’s issuing bank to check to see that they have enough credit to pay for your order. The bank responds with a yes or a no depending on the account balance. Finally, you get a message on the app saying the transaction was successful or not!

Why Would You Need A Payment Aggregator?

Why would you need a payment aggregator?

As a merchant, if you want to expand your business by accepting all modes of online and credit card payments with minimal fuss and in a short span of time, then a payment aggregator is the best choice. A payment aggregator platform eliminates the need of setting up individual online payment process by allowing merchants to accept credit card and bank transfers without having to set up a merchant account with a bank or a card association. The payment aggregator platform can also hold consumer card details to allow for faster purchases or hold money in an account to allow for future purchases. Mindgate payment aggregator platform solution provides a centralized system for merchant management, reconciliation and settlement along with providing a single POS.

What Are Corporate Bulk Payments And How H2H (Host To Host) Systems Work

What are corporate bulk payments and how H2H (Host To Host) systems work

Businesses today are involved in financial transactions with a number of banks and financial institutions. Corporate Treasury departments are faced with multiple responsibilities such as optimizing cash, maintaining liquidity, securing finance, controlling risk and even managing bank relationships. This requires communication in a host of different languages and protocols. Corporate Bulk Payments then is a bank system, that allows performing several transactions such as salary payment, dividends, and direct debits at one go.

Complexities in Corporate to Bank Connectivity

Complexities in Corporate to Bank Connectivity

Every bank has their own set of standards and processes which need to be followed in order to establish a legit connection. For Example, payments within the Single European Payments Area (SEPA), need you to comply with the European Payment Council’s SEPA directive requiring provision and maintenance of International Bank Account Numbers (IBAN) and SWIFT’s Bank Identifier Codes (BIC) with other bank details in vendor and customer records. Another issue arises with certain countries which require communicating only in specific character sets defined by the local language of that country. All these challenges require moderation of sorts to bring everything to one level in order to facilitate complex accounting, financial supply chain, treasury etc and provide a bulk payment solution platform for corporate houses.

What is Host-to-Host Connectivity

What is Host-to-Host Connectivity

Host-to-host (H2H) is an automated solution for secure electronic data transfer between banks and their corporate clients. Until now, H2H was primarily about the exchange of files to and from the customer site which is no longer the case in the current era of the digital banking business.

Now, H2H connectivity enables banks to exchange information in their corporate clients’ preferred file formats, network protocols, and security standards.

What H2H does

The host-to-host system eliminates the tedious manual process of payment transfer which involves following multiple protocols and takes charge of various steps such as

  • End to End automation of payment process
  • Auto-splitting and merging based on the NPCI set limit
  • Auto signing and Un-signing for authorization
  • Seamless file transfer

Why H2H is required

  1. On-boarding customers quickly

Corporate customers do not have the resources or the time to make changes in their protocols as per every bank they communicate with. According to them, it is the bank’s predicament to take care of the format issues. This creates a hindrance in the quick on-boarding of customers. H2H provides the delivery through streaming and web services which offer a more interactive linking of the banks and corporate houses. These capabilities help banks to significantly reduce the time and costs of on-boarding new corporate customers.

  1. Automation of payments to save time

Businesses of all sizes are looking forward to automatically connect to their bank for direct payment upload and processing. They are increasingly willing to automate their payroll system, ERP, purchase order and Invoices. Corporate houses want their payments to be automatically sent to their bank and automatically processed and skip the tiresome manual upload which involves verifying and re-authorization of payments.

  1. Increased competition to survive

With so many banks providing an automated platform for corporate customers, it just makes sense for others to not be of the left outs if they want to survive. With cut-throat competition from rival banks ever spying on every crevice into the corporate houses, one simply cannot risk the loss of their future cash management business, advisory services, etc. It is becoming an increasingly competitive market for banks.

All these factors make an H2H system the need of the hour. Mindgate is a corporate bulk payment solution provider which provides H2H based solutions for banks and corporates and provides the ability for businesses to integrate their accounting and ERP systems for payments and collections.

Real time benefits of real time payment

Real time benefits of real time payment

Real-time payments have seen a steady worldwide growth in the past few years. Growing consumer demand for a speedy and convenient transaction has provided impetus to the popularity of RTP over traditional payment methods. With financial transactions now taking place with a single stroke on your mobile screens, It’s time the financial institutions took cognizance of the situation. This article explores the significance of real time payments for banks and other payment providers. 

What exactly is RTP or UPI?

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Real-time payments are electronic payment solutions that are available 24/7/365. In India, UPI or Unified Payments Interface facilitated by NPCI is the platform which provides real time payment solutions. It is a system that powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund routing & merchant payments under one umbrella. Majority of the banks have their own UPI app for all the mobile platforms.

Here’s how real-time payments score over traditional methods:

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Immediate transfer of funds: UPI enables the instant transfer of funds from the payer’s account to the payee’s, typically in a fraction-of-a-second of the initiation of the transaction. In internet banking and mobile banking, the customer is required to go through some time consuming preliminary steps like registration of payee or beneficiary etc. Here, UPI has a remarkable edge over net banking as it eliminates the step of third-party payments with the introduction of VPA (Virtual Payment Address).

Instant acknowledgment: With smartphones having made a permanent residence in the pockets of individuals, it only makes sense to broadcast every piece of information through it, including the status of the transaction and account statement. When the payer initiates the payment, they are informed via SMS within a few seconds whether the payment or transaction was successful or not.

Single and centralized identity:

UPI provides you with a virtual payment address so that you can transfer money between accounts without switching multiple profiles. With just a VPA and a click, the payment is done. At the end of the day, UPI allows the customers the freedom to transfer their money as and when they like, with or without their phones, acting as one key for all purposes.

The updated version of UPI called UPI 2.0 has even better and enhanced features such as below

One-time mandate: With this feature, customers will be able to pre-authorise a transaction and pay later. UPI 2.0 mandates are created with one-time block functionality for transactions.

Linking of overdraft account: In addition to current and savings accounts, customers can now link their overdraft account to UPI. Under this feature, customers would be able to avail all the benefits associated with OD (overdraft) account.

Signed intent and QR: Customers can now check the authenticity of merchants by scanning QR or quick response code.

Invoice in the inbox: This feature helps customers to check invoice sent by the merchant during the transaction. This will allow customers to view and verify the merchant credentials and check whether it has come from the right merchant or not.

The benefits of real-time payments to banks and customers are many. For instance, customers no longer need to go through the hassles of obtaining a cashier’s check for big-ticket purchases like a car. In fact, many of these transactions are now done instantly through mobile devices. The instant verification of identity and transfer of money indeed makes the entire process smooth… Real-time infrastructures could eventually replace other modes of payment such as cards, checks and other traditional methods of payments. To know more about: real time confirmation solution provider