Photo of Lauren Pfeiffer and Susan Chan, Adobe and Brent Watters, J.P. Morgan.

Adobe has managed to automate between 95% and 98% of AP and AR processes using an innovative connectivity module. The bank agnostic solution also has scope for future benefits.

Adobe automates over 95% of AP payment and AR cash application processes

The challenge

Meeting the needs of a growing global operation was becoming a challenge for the Adobe treasury team. With every day that passed, it was becoming clear that the company had outgrown the capabilities of its existing banking technology landscape, making it difficult for treasury to take advantage of state-of-the-art payment tools and work efficiently with its banking partners.

For example, file formats for bank statements and payment files were not the current standard for accounts payable (AP) and accounts receivable (AR) processes, creating massive amounts of manual inputting within the company’s SAP transaction processing system. In addition, legacy proprietary file formats could not support the goal of achieving a bank-agnostic model where Adobe could easily plug in new banks using the standard XML file format. This would ease the transition of future M&A integration and on boarding new banks.

The solution

To overcome issues such as the above, treasury decided that it was critical to move away from custom generated programmes and execute a technology transformation that would allow it to take advantage of advanced payment processes. The new solution would need to be bank-agnostic, relying on the ISO 20022 XML standard which would work seamlessly with the company’s ERP system and solutions offered by its banking partners.

To achieve this, Adobe worked with J.P. Morgan to implement the bank’s Global ISO 20022 XML Data Medium Exchange (DME) engine template, which acted as a vital connector to Adobe’s SAP system. This combined with SAP’s DME engine is a powerful co-generator tool which provides system administrators with scalability for the future, enabling them to meet data requirements, data security standards, and data qualification dimensions in the international banking system. In addition to data security (AT REST and in TRANSIT) and guaranteed data integrity, the implementation addressed key end-to-end architecture considerations.

Winning the Adam Smith Award is huge recognition to the teams that participated in this important, transformative project. The award is also a true testament of excellent, and at times complex, collaboration across not only internal groups at Adobe which included treasury, AP, AR, credit, IT, payroll, and tax but also our banking partner J.P. Morgan Chase.

Susan Chan, Director, Treasury Operations, Adobe

Using this connectivity as a foundation, Adobe has been able to drive efficiencies around its AP, AR, tax, payroll and treasury processes. Through the ISO 20022 XML standard, in addition to an enhanced referencing model for its transactions, treasury now receives an acknowledgement within five minutes from the bank that files have been received, providing reassurance that there are no connectivity issues. Rejected or returned files are sent by the bank within 24 hours, speeding up processing and reconciliation.

Moreover, Adobe now receives consolidated paper and electronic collection data in a single host-to-host lockbox transmission which has eliminated hours of manual cash application. This enhanced real-time reporting capability combined with robust receivable management tools and self-service tracking feature is a game-changer for Adobe’s treasury operations.

Best practice and innovation

Adobe’s treasury initiative has been an overwhelming success for the company. Since adopting the ISO 20022 XML standard, treasury has been able to automate between 95% and 98% of AP payment and AR cash application processes. The implementation of this new file transmission method also increased security protocol, utilising tougher data encryption standards and real-time communication.

In the past, Adobe had to use custom generated programmes to run its lockbox engine, but with the implementation of SAP’s Bank Communication Manager (BCM), treasury can now seamlessly connect the native lockbox programme in advance. The BCM provides visibility, transparency and accurate processing. This combined with usage of the J.P. Morgan DME template has eliminated much of the complexity required by customisation, which in turn has reduced IT development time by as much as 60%.

The reduction of excess development saves on costs as well, with less time spent on development and the simplification of day-to-day maintenance made possible by SAP industry best practice.

In addition, by adopting the latest standards, Adobe gains security, scalability, and the ability to take advantage of future technology developments and more easily respond to international mandatory requirements that may be introduced down the road.

Key benefits

• Automated between 95% and 98% of AP payment and AR cash application processes.
• Cost savings.
• Scalability.
• Bank agnostic.
• Improved security protocol.

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