Reconciling real-time single or batch transactions via FedNow

To integrate aging accounts receivable (A/R) processes with FedNow Reconcile for real-time payment reconciliation and review of outstanding requests for payments, businesses can follow these steps:

1. FedNow Integration Setup:

• Establish connectivity with the FedNow service through your financial institution or a third-party provider.
• Configure your systems to receive real-time payment notifications and transaction data from FedNow.

2. Digital Invoice Generation:

• Generate digital invoices for goods or services rendered, including all necessary details such as invoice number, amount due, and payment terms.
• Ensure that each invoice includes a unique identifier that can be matched with corresponding payments received through FedNow.

3. Real-Time Payment Matching:

• Develop automated algorithms or utilize software solutions that can instantly match incoming payments received via FedNow with outstanding invoices or A/R entries.
• Implement logic to reconcile payments based on invoice numbers, customer IDs, or other unique identifiers to ensure accurate matching.

4. Aging A/R Monitoring:

• Integrate aging A/R functionality into your financial management system to track the aging of outstanding invoices and payments in real-time.
• Create aging reports and dashboards that dynamically display the aging status of A/R balances, categorizing them based on predefined aging buckets (e.g., current, 30 days, 60 days, 90 days).

5. Automated Alerts and Notifications:

• Configure automated alerts and notifications to notify relevant stakeholders when invoices become overdue or payments are received.
• Set up thresholds for triggering alerts based on aging status changes or outstanding payment amounts to facilitate proactive collections management.

6. Workflow Automation:

• Implement workflow automation tools to streamline collections processes based on aging A/R data and real-time payment reconciliation.
• Automatically initiate follow-up actions for overdue invoices, such as sending reminders, initiating collection calls, or escalating delinquent accounts as necessary.

7. Exception Handling and Resolution:

• Develop protocols for handling exceptions or discrepancies identified during the reconciliation process, such as mismatched payments or unapplied funds.
• Establish procedures for investigating and resolving discrepancies promptly to ensure accurate A/R reporting and reconciliation.

8. Continuous Optimization:

• Continuously monitor the effectiveness of your FedNow Reconcile integration and aging A/R processes.
• Analyze key performance metrics, such as days sales outstanding (DSO) and collection rates, to identify areas for improvement and optimization.

By integrating aging A/R processes with FedNow Reconcile, businesses can effectively manage real-time payments, monitor the aging of outstanding invoices, and streamline collections management for improved cash flow and financial efficiency.