Reconciliation is a costly business. I’m not talking Reconciliation in the political sense here, I’m talking Reconciliation in the business transactional sense. I mean tying together the key pieces of data that make up a financial transaction – customer information, product and inventory information and financial information.
This is a process faced by anyone who takes payment for products and services from a customer – from retailers, to local government, to field service companies, to transport companies, to healthcare providers.
The issue is that at the time that the transaction takes place, not all the information is connected, so it has to be pulled together, or reconciled, after the event.
For example, a pop-up store takes payment on a mobile terminal and swipes the customer’s loyalty card, but at the time of transaction has no access to customer information or to inventory. At the end of the day, the transaction has to be reconciled to the loyalty system to give the customer his points, and to the inventory system to update stock levels.
A roadside assistance engineer uses the parts from his van stock to service a customer call, but has no immediate access to the inventory system. At the end of each day he has to send stock-level information through to head office for reconciliation.
A budget airline offers customers the option to upgrade their luggage allowance at the airport – they take payment on a mobile device, but have to manually reconcile the customer and luggage systems to build a new manifest.
A local government wants to offer self-service bill payment to citizens, but unless the self-service device is connected back to the financial and customer databases, reconciliation has to be performed at the end of the day.
A healthcare nurse on the road delivers care and medications to patients. In some cases, payment is taken on the spot, but from a standalone terminal, with no link back to patient records, so reconciliation has to be done manually at the end of the day. In other cases, an invoice is generated and sent after the visit.
So what is the cost of reconciliation?
- One local government estimates the cost of physically serving a bill payment customer is $39.
- A healthcare provider estimates the cost of sending an invoice at $50.
- A retailer knows that for every 3 inches of printed receipts he can replace with digital ones, he saves $160,000 per year.
Then there is the lost opportunity cost – the engineer sent to a call out without the right parts because inventory wasn’t updated. The disgruntled customer who couldn’t use his points because the system wasn’t updated the same day. The airline customer who couldn’t find a staff member because they were tied up with updating baggage systems.
All of these are very real costs and challenges. And all can be addressed and eliminated by using a Connected Transaction approach – harnessing the power of the Cloud to tie together all this key information in real time. If reconciliation happens in real time, as the transaction is made, service providers have a massive opportunity to drive down costs, increase efficiency and maximise business opportunity.