Photo of Paisan Yungsomboon, Guangzhou Lotus Supermarket Chain Store Co., Ltd and Jasmine Zha, UOB.

Facing large amounts of receivables from different buyers, CP Lotus was looking for an effective solution to improve its reconciliations. UOB’s tailor-made virtual account offering successfully connects its own e-banking system to CP Lotus’ merchant system and the firm’s
ERP, automatically capturing customised reports and achieving the firm’s goal with efficiency and accuracy.

How to control large amounts of receivables from different buyers

The challenge

CP Lotus utilises a third-party Merchant Acquiring System for its daily operations. This system not only provides it with bank account control, but also helps it to manage procurement. Despite having directly interfaced its own ERP system with the third-party system, the company had been trying to look for a more sophisticated cash management solution to help it streamline its end-to-end processes.

CP Lotus receives a large number of receivables from various chain stores in its outlets on a day-to-day basis. Reconciling the receivables requires a lot of time and effort. The company also relies on its banks’ electronic channels to handle collections and payments and manage transactions and reports via various bank platforms, which create added and duplicated work.

As a result of its collaboration with numerous suppliers and merchants, CP Lotus usually needs to make thousands of payments every month. These payments are usually ad-hoc and can come singly or in batches. A typical payment is time-consuming, as detailed information is required for each; if the transaction volume is high and if there has been a complex approval matrix in place the issue is worsened.

The solution

CP Lotus engaged UOB to help manage its payables and receivables with an end-to-end solution capable of streamlining working capital flows.

UOB created a range of unique virtual account numbers (that are chosen by CP Lotus) and assigned them to each of CP Lotus’ collection streams. Now, when CP Lotus’ payers make payments and indicate the assigned virtual account number as the beneficiary account, CP Lotus is able to easily identify the payers. The reconciliation efforts are further enhanced and made efficient with the detailed bank statement reports that they can retrieve via their ERP.

To cater to CP Lotus’ specific requests, UOB has developed a unique host-to-host portal to bridge BIBPlus, UOB’s electronic banking channel, with CP Lotus’ third-party Merchant Acquiring system. The customised bank report generated can be automatically transferred into the management system and further interfaced with CP Lotus’ ERP.

Besides the reports from the third-party system, CP Lotus can also retrieve UOB’s transaction data easily at its end. This solution facilitates CP Lotus’ collection processes, as it streamlines various systems and achieves an end-to-end automated solution with zero human intervention. Operational risks and process time are reduced.

UOB also provides bulk payment services to CP Lotus in which the firm can input payment information into an Excel file and upload the all-in-one bulk file onto BIBPlus. All payment information is automatically captured by UOB and payments can be processed via straight through processing. All reports are downloaded via BIBPlus simultaneously.

Best practice and innovation

This is a pilot in which customised virtual accounts are being uploaded to the CP Lotus’ internal system via a host-to-host interface solution. This is a demanding solution requiring an auto end-end solution with zero human intervention.

Traditionally, a client’s accounting team will manually reconcile all incoming funds from banking record/slips and do the mapping with internal distinctions to identify the collection source. As CP Lotus was using SAP, which interfaces with its merchant acquiring system, it took a lot of time and effort to manually upload incoming bank reports to its internal system.

Key benefits

• Enhances accuracy in identifying receivables.
• Reduces administration effort.
• Improves cash forecasting abilities.
• Provides greater visibility of incoming funds.
• Achieves an automated and seamless end-to-end process; operational risks reduced and time saved.