Consumer Brands and Retail Sector Receivables in the US: A Mixed and Changing Landscape

Consumer Brands and Retail (CBR) receivables management in the US currently presents some very diverse narratives. On the one hand, a substantial percentage of B2B receivables are now electronic and can therefore potentially be automatically reconciled. On the other, an appreciable number of B2B customers still use a mixture of cheques and cards for their remittances. In the C2B space, physical cash is still king in bricks and mortar retail, with cards in second place, but the inexorable rise in online shopping continues to tip the balance in favour of electronic methods. Additionally, receivables processing has taken centre stage as richer data has become more available and is seen as almost as valuable as the payment. Chris Hamilton, Regional Sector Head Consumer Brands, Retail and Healthcare in HBSC’s Global Liquidity and Cash Management Group examines some of the methods US CBR treasuries can use in this challenging environment to enhance their receivables processes.

Technological innovation and the rise of new payments methods are having a dramatic effect on CBR sector treasuries as they look to create efficiencies in their receivables processing. The industry is at a tipping point as “old” processes remain within the financial supply chain and new processes quickly gain traction.

B2B receivables: paper still present

Though electronic receivables are growing as a payment method, market data indicates a significant portion of B2B payments in the United States still are made via cheque.[1] As a result, companies continue to open and maintain lockbox sites around the country to handle cheque remittances. Additionally, some cheques come into company offices, rather than to the lockbox. To accommodate these cheques, Remote Deposit Capture (RDC) services – a scanner in the company office connected to the bank so deposits can be made ‘onsite’ – continue to be employed.

The banking industry’s response to this has been to continue to offer these services while facilitating the trend away from paper. The number of banks that offer their own lockbox services has declined: many banks outsource/white label this service to a small number of key industry providers who continue to specialise in and continue to make investment in processing paper. Banks, such as HSBC, offer integrated lockbox RDC services, which allow for cheques directed to the company location to be processed in the lockbox workflow.

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