ALTANA Pharma U.S Deploys Custom Cashbook AR Solution to Speed up Cash Processing

It has long since been accepted that the Customer is King. And yet it is also widely known that Cash is King. For the mathematically inclined, the equation works out quite nicely:

If Customer = King
and
Cash = King
therefore
Customers = Cash

However, as most AR departments know, the real-world is not as simple as the above equation. Recording and allocating receipts in a timely and productive manner from key customers is a daily challenge for many companies.
ALTANA Pharma U.S. is the North American subsidiary of ALTANA Pharma AG, a leading worldwide pharmaceuticals company founded in 1873. As a leader in medial research and product development, ALTANA Pharma has continued to increase sales volumes in North America since its arrival there in 1984.
In particular, ALTANA’s successful respiratory and gastrointestinal product lines have driven up customer demand and this performance has had a direct impact on the volumes of customer remittance information coming into the AR department. In addition to large volumes, different distributor relationships and billing arrangements have also meant that additional complexity has been added over the years to the cash application process.

Introduced to SAI New Technologies by George Moroses at IBS US, ALTANA and SAI initially sat down and analyzed the manual steps associated with the printed remittance information. Identifying redundant transactions on the customer remittance printout (called “washes”) was a key part of this. A “washed” transaction contained information for a transaction previously processed and where no update to the ERP was necessary. Sorting out the “real” transactions that necessitated system updates and “washes” was a labor-intensive job. Automating this task was one of the main objectives of the custom Cashbook solution.
The new solution was basically defined as follows:

• Customer sends regular electronic remittance files (to replace paper copies)
• Electronic file uploaded into Cashbook
• Cashbook processes file, identifying & eliminating “washes”
• Cashbook matches “real” transactions with open Invoices on AR
• Cashbook completes postings to the ERP’s AR and GL

Other features of the Cashbook AR module would also be utilised by the ALTANA AR team, including the handling of discounts and deductions, part-payments and over-payments, as well as unallocated cash. Full reporting on the “washes” and AR matches made were also used.
Caroline Carey, product consultant with SAI, worked closely with ALTANA finance team members and also Hugh Carty at IBS US Consulting. In her estimation “the project was perhaps more complex than originally anticipated but the final version has meant an improved process and also an enhanced Cashbook AR product for the pharmaceutical and other sectors.”

ALTANA went live with the Custom Cashbook AR Lockbox solution earlier this year. They are also using Cashbook Automated Accounts Payable and Bank Reconciliation functions. Cashbook is running side by side with ALTANA’s core ERP system on an IBM AS/400 platform.

SAI New Technologies has delivered Auto AR solutions across a variety of industry sectors and local finance regulatory environments. Other Cashbook Auto AR sites include Sumitomo Electric Wiring Systems, Atlas Copco CMT and Viasys Healthcare in the U.S.; as well as the Impress Group, Dentsply International, the Autobar Group and Norbord in Europe.