Air Hydro Power knew it needed to streamline and capture efficiencies in its accounts receivables process. So the innovative company partnered with CUB and TransCentra to create a customized accounts receivable solution.
“Air Hydro has a complex ERP/accounting system with many variables,” said Senior Vice President of CUB’s Treasury Services, Kim Dodson. “Air Hydro receives approximately 3,000 check payments per month. Because of the complex nature of their system, every invoice and payment received is different. The lack of uniformity made it difficult to automate the receivables process.”
The solution? A customized “Lockbox” product that unifies invoicing and creates a data-rich cash management system for the customer.
“We were looking for opportunities to streamline the payment posting system and had enlisted the services of our financial partner CUB Bank,” said Air Hydro CFO Geoff Luber. “CUB was able to identify a local Lockbox partner, and within a short time period we were up and running and posting payments with just a few clicks of the mouse. This new process has saved many hours of labor time and has enabled Air Hydro Power to average double-digit percent growth over the last three years while not adding any new accounting staff.”
Air Hydro Power — a provider of hydraulic, pneumatic, connector and automation technologies in Kentucky, Southern Indiana, West Virginia and Alabama – is a forward-thinking company that sells thousands of parts to primarily manufacturers in the territories it serves.
“Geoff is very technology oriented,” Dodson said. “He’s all about efficiency and working smarter, not harder.”
“Lockbox combines efficient processing and accelerated availability,” Dodson said. Optional features include data capture with customized file formats specific to a company’s accounts receivable system.
Receivables are mailed to a local Post Office Box, transported to the Lockbox facility, and securely processed by expert staff. Image files are then transmitted to CUB for posting to a business’ checking account. Daily deposit totals and images are available through the Lockbox online image archive and reporting system.
Whether an entity receives a few payments per month or a few thousand, Lockbox is an ideal solution for everything from doctors’ offices, non-profits and municipalities to large manufacturers.
“This is an area where some municipalities could really gain an advantage, too,” CUB’s Dodson said. “Imagine if they were able to automate all those tax payments.”
Lockbox clients receive these benefits:
- Increase cash flow
- Reduce mail float
- Streamline processing
- Reduce administrative expenses
“We’re all about creating solutions for customers,” Dodson said. “That’s really how we look at ourselves, as consultants.”
To facilitate a solution to Air Hydro’s needs, CUB acted as a consultant and partnered with TransCentra, a Louisville-based technology service provider with its own zip code that Dodson describes as “a hidden gem.”
The bank and two companies met and identified data elements that Air Hydro needed extracted from invoices and check payments. Some of these include account number, invoice number, check numbers and discounts.
“TransCentra employs excellent computer programmers that can write customized programs to extract key data elements required to post payments,” Dodson said. “In this case, TransCentra took a very manual and labor intensive process and automated it by developing a customized file extract specific to Air Hydro’s accounts receivable system.”
Debbie Dudek, Relationship Manager/Client Delivery at TransCentra, added: “Our partnership with Citizens Union Bank has allowed us to aid CUB in creating customized solutions for their clients. Treasury Management has evolved from simply transactional banking and providing data to providing requisite information and intelligence to customers. The Air Hydro solution allows their client information and their accounts receivables to achieve straight through processing. With less human intervention, Air Hydro can accomplish the primary goals of speeding up their receivables collections and increasing their liquidity.”
CUB Bank is a 128-year-old Kentucky institution that branched into the Louisville market about 10 years ago. The bank’s depth of experience among its employees is second to none.
“We are successful because we are so solution-driven,” Dodson said. “That’s the key to being a great consultant – we understand the operations side of a customer’s needs and create unique solutions.”