NOVEMBER 2, 2014
Has your accounts payable department ever opted for paper-based payment methods because you lacked the information necessary to pay electronically? The Remittance Coalition is changing the game.
This volunteer group of more than 350 businesses and individuals collaborated on a new solution for storing payee information that will debut at the annual Association for Financial Professionals conference in Washington, D.C., taking place this week, from Nov. 2 to Nov. 5.
Founded in 2011 by the Federal Reserve Bank and Accredited Standards Committee X9, the coalition solves problems with processing remittance information to promote electronic payments and straight-through processing.
The Remittance Coalition's newest project, the Business-to-Business Directory, will allow payers to access their payees' account and payment information on an extensive online database. The project is envisioned as a platform for all payee systems in the U.S. to be stored, managed, looked up, and accessed from a central location.
"Right now it's a white paper. The next step is to firm it up and try it out in the real world," says Mary Hughes, senior payments information consultant at the Federal Reserve Bank of Minneapolis. The report is available for free online.
Hughes says the coalition is seeking industry participants to test the B2B Directory concept, and is also recruiting new members as it presses toward its next project, which deals with retail industry debit balances. This project aims to create a new set of standards in best practices, terminology, and procedures, and will incorporate research in the retail industry and a mini glossary.
"Everyone agrees it's a headache, and no other group has come forward to create a solution and propose consistent processes and practices that would help facilitate the handling of debit balances in the retail industry," Hughes says.
Miscommunications between buyers and suppliers make it difficult to predict cash flow, says Kay Rogers, a financial operations professional and Remittance Coalition member. If a buyer has unintentionally posted debts that exceed the amount owed to the supplier, the supplier can end up not being paid.
"AP and AR people really need to work together to manage transactions efficiently," Rogers says. "The biggest problem we're trying to fix is communication."
The coalition is seeking participation by financial operations professionals who work at large retail companies and are knowledgeable about accounts payable to collaborate on the project.
"Right now we're in the beginning stages and we're trying to get members," Rogers says. "We need retailers so we can collaborate on procedures and processes that will help both sides know the current status of AP and AR."
Hughes says the work is being done under X9, the only organization in the U.S. that creates open consensus standards for the U.S. financial services industry. Through open consensus, "everyone's voice is heard and considered," she says.
The Remittance Coalition as a whole meets four times a year — twice by conference call and twice in person— and members volunteer for tasks that match their qualifications.
"It's a way for them to share their professional expertise and solve a problem that everyone in the retail industry thinks needs to be solved," Hughes says.
To get involved or learn more, contact the Remittance Coalition at email@example.com or visit www.minneapolisfed.org/about/whatwedo/remittancecoalition.cfm.