Case Study: Pall Corporation

Brief

Founded in 1946,Pall is the largest and most diverse filtration, separations and purifications company in the world. Pall operates in two broad markets, Life Sciences and Industrial and has annual revenues in excess of $2 Billion.

USF Filtration had been using Cashbook AR Lockbox integrated with BPCS for many years, however in 2004 after being purchased by Pall they were required to move to the corporate standard of MAPICS. They moved to MAPICS but kept their Cashbook for its automatic Bank Lockbox processing. Cashbook changed the interfaces from BPCS to MAPICS IFM without any change to the core Cashbook functionality.

In 2005, Pall set out to review and improve their North American receivables process. They turned their attention to the recently acquired company, USF Filtration in Baltimore, MD, who were using Cashbook to automate their bank lockbox receivables from Bank of America. USF Filtrations were completing daily cash postings with the equivalent of 1.5 less AR people than other locations. Pall, the new corporate parent of USF Filtration, liked what they saw and an internal review was started which lead to a North American roll-out of Cashbook.

Here was the business process before the solution was implemented:

• Pall was receiving individual bank lockbox files for each of their 15 U.S. divisions.
• Cash application was being done individually at each location.
• Cross company and cross environment cash allocations were a big issue
• Many customers were quoting references other than invoice number on their remittances (PO number, shipper number, SO number) making cash application difficult.
• Pall were using a different ERP system (MAPICS) to USF Filtration (BPCS)
• There had been discussion regarding consolidation but nothing had been started.
• Different payment rules existed across the Pall Corporation requiring different auto-matching rules per company.
• Different payment terms involving discount and deductions existed across the group.

Solution

Cashbook and Pall began examining the feasibility of taking the automated AR principle and applying it across the company’s different divisions across the U.S. Pall began a process of consolidating all company data onto one single server. In addition, in conjunction with their bank, Pall began replacing multiple different bank lockbox services across the country with 1 single bank lockbox feed for all U.S. divisions. The single lockbox facility enabled the company to receive AR remittance information for all Pall companies on one file, thereby dramatically cutting down on the impact on IT as well as making significant savings in bank charges. While all the U.S. divisions were now housed on one machine, there were multiple environments and release versions set up for the 5 physical sites and 15 different divisions. Another key component of the project was to analyze the data coming from the bank, ensure that the reference information being supplied by many customers for multiple Pall divisions could be understood and reconciled in the same way as the original site in Maryland.

In addition, Cashbook had to be quickly integrated to a new ERP system, MAPICS, which was now the corporate standard at Pall Corporation. Finally, creating synergies across departments and improving communication between the different locations proved to be contributing factors to the success of this project.

The key features of the solution are:

• AR cash is being applied to customer accounts across multiple companies and environments on the same machine.
• Cascading matching algorithms match based on a combination of invoice number, amount, purchase order number, sales order number, discount amount, pick list number, packing list number and shipper ID.
• Registered bank account numbers were leveraged in the system to identify who was paying what. Bank accounts identified are “remembered” for future auto-matching.
• Cash is received at a “Global” level and allocated directly to individual companies always ensuring all cash is batched off in Cashbook Lockbox journals to a specific Financial and Administrative Division.

Results

Key benefits of this project included:

• Automated match rates average between 70% and 99.5%.
• Significant savings have been achieved on bank charges through consolidation.
• Immediate knock on improvement in DSO (Days Sales Outstanding)
• New and acquired companies can be added with little effort
• Massive time and monetary savings.

Customer Comment: