Account Receivable Operations

Account Receivables

Mellon Bank Corporation and MCI System house recently announced that they plan to form a joint venture to provide corporations with complete accounts payable (AP) and accounts receivables (AR) outsourcing services, subject to regulatory approval. This jointly developed offering will be the first business process outsourcing service of its kind.

 

The new ventures services will enable customers to focus on core competencies by outsourcing their back office financial processes, specifically AP and/or AR functions. Venture team members are currently engaged in discussions with Oracle to use their Oracle Application TM software. The Pittsburgh-based venture will process transactions, post payables and receivables, and update customers' general ledger systems. In addition, the venture will employ the latest treasury technologies to optimize both AP and AR functions.

The venture team is currently seeking beta customers to implement the new AP outsourcing concept, while the AR beta testing is targeted for 2008. Customers of the venture will have the advantage of interfacing with the comprehensive array of Mellon Global Cash Management SM products and utilizing MCI System houses expertise in systems integration and information technology outsourcing.

“Research and close interaction with customers indicate that corporations want to outsource their routine back office functions to reduce costs, improve productivity and focus on the core competencies that increase their own shareholder value,” said the Mellon vice chairman for cash management and wholesale banking. “These companies need a strategic outsourcing partner with comprehensive solutions that exceed traditional cash management payables and receivables products.”

“We chose to work with MCI System house due to its considerable systems expertise and the telecommunications experience and reputation of its parent company MCI,” said Edward Valenzuela, head of the Mellon portion of the planned joint venture. “MCI System house has not only the right mix of resources to help us build and enhance the service offerings, but also the strategic software and hardware vendor relationships necessary to support such a dynamic initiative.”

“Mellon is an industry leader in providing specialized cash management services to companies worldwide,” said the president of U.S. operations for MCI System house. “The combination of those skills with our best-of-breed information technology expertise will give businesses a new level of cost-containing, financial management skills.”

The venture also will benefit from Mellon's strong banking relationships with customers, as well as its long-standing reputation for providing the highest quality payables and receivables services. In addition, the venture builds on Mellon's expertise as a provider of partial outsourcing solutions such as remittance processing, check issuance and automated investment and borrowing services.

The ventures accounts payable processing begins with the receipt of a customers purchase order authorization after they have received goods/services. The service can match the purchase order with either paper or electronic data interchange (EDI) transmitted invoices. After resolving mismatches and calculating and applying applicable discounts, taxes and fees, the service will make disbursements using Mellon payment services or other banks and vendor services. The service will also handle vendor inquiries, reconcile the bank demand deposit account and update the customer's general ledger and cash management systems. A Web browser interface will give customers the on-line capability to access reports, make inquiries and monitor account activity.

 

Account Receivables