Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-08-26
2002-03-19
Cosimano, Edward R. (Department: 3161)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S030000, C705S034000, C705S400000
Reexamination Certificate
active
06360211
ABSTRACT:
REFERENCE TO MICROFICHE APPENDIX
A microfiche appendix is included in this application consisting of 7 pages of microfiche and 350 frames.
TECHNICAL FIELD
The present invention relates to financial electronic data interchange (“EDI”) technology and, more particularly, to a system and method for electronically processing invoice information.
BACKGROUND
The traditional manual methods of collecting, reviewing and paying vendors' invoices, especially periodic invoices, e.g., utility bills, are fraught with problems for customers having large volumes of such invoices. These problems include: (1) Failure to get the invoices through the customer's review, approval and accounts payable (“AP”) process in time to avoid late notices, late payment fees and service shut-off; (2) inability to properly review the invoices for accuracy, e.g., comparing current charges to those of prior invoices, because such a review would be too costly and/or cumbersome, resulting in billing errors that may never be found; (3) unwillingness of employees of the customer, e.g., store and branch managers, to give the review process a high priority or to put much time into the review process because review is considered to be tedious, resulting in invoices that are unduly held up or not properly reviewed; (4) use of AP operations staff to review invoices, resulting in a labor-intensive and, therefore, costly review process; and (5) a frequent necessity to review invoices only after payment has already been made.
Recently, several types of vendors, e.g., utility companies, lessors of commercial property, and uniform providers, have begun to use an EDI invoice that complies with the ASC X.12 810 standard (“810 Invoice”). The telephone industry has begun to use an EDI invoice that complies with the ASC X.12 811 standard (“811 Invoice”). These electronic invoices contain the same information as do analogous paper invoices, but the information is electronically transmitted via a network from the vendor's computer system to a remote computer in a standardized format.
Further, various vendors are beginning to accept payment for bills in an EDI format that complies with the ASC X.12 820 standard (“820 Payment”). This electronic payment contains all of the payment information that a customer would include on a conventional AP check and stub, e.g., payer name, amount, invoice number, account number and dates. A vendor's bank can receive an 820 Payment and automatically post the receivable to the vendor's accounting system, almost instantaneously. Many customers of such vendors, however, do not have EDI capabilities.
There is a strong need in the banking industry for a system that will permit a financial intermediary to automatically process in an efficient and timely manner invoice information from a vendor on behalf of the vendor's customers. Such a system should take advantage of financial EDI technology, which allows companies to exchange payments and related data with trading partners using the Automated Clearinghouse (“ACH”) or private EDI networks. Several banking institutions have distributed marketing materials that make reference to various invoice processing services, which are purported to be either currently available or in the development stage. However, the applicants are unaware of any currently-existing invoice processing system that takes full advantage of current EDI technology and provides automated pre-approval of invoices.
SUMMARY OF THE INVENTION
The current invention provides a system and a method that permits an intermediary, e.g., a bank, having EDI capabilities to electronically process vendor invoice information on behalf of a customer that does not have EDI capabilities. A system for processing invoice information is disclosed. The system includes means for communicating invoice information from a vendor site to an intermediary site and means for performing an automated reasonability test on the invoice information at the intermediary site using a reasonability criterion. A method is also disclosed, in which the invoice information is communicated from a vendor site to an intermediary site and an automated reasonability test is performed on the invoice information at the intermediary site using a reasonability criterion.
Using the present invention, an intermediary can (1) receive invoice information by any of a variety of methods, including electronic, from a vendor on behalf of a customer; (2) automatically review the invoice information, resulting in either approval of the invoice information or identification of unusual billing circumstances; (3) notify the customer of any unusual billing circumstances; (4) electronically transmit a file to the customer that is compatible with customer's AP system; (5) pay the vendor by any of a variety of methods, including electronic, on the due date; and (6) maintain historical information, which permits trends analysis and management reporting.
The advantages of the present invention over conventional systems and techniques are numerous and include the following: (1) A shorter and more manageable time line between invoicing and payment by replacing three mail cycles (vendor to customer, customer to AP department and AP department to vendor) with faster electronic cycles; (2) a reduction in invoice costs through elimination of late and finance charges, resulting from an increase in invoice payment accuracy and timeliness; (3) a reduction in customer's AP staff resource costs through automation, e.g., automated update of AP system, which obviates manual data entry; (4) automated review of invoices, which permits the customer to solely focus on problem invoices; (5) automated auditing of invoices, e.g., for computation accuracy and rate classification; and (6) management reporting capabilities, e.g., energy management for utility customers.
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Reams, Jr.: “Electronic Contracting Law”; EDI and Business Transactions; 1996-97 Edition published by Clark, Boardman & Callaghan of Deerfield, II., New York, NY., and Rochester, NY; chapter 12 pp. 336-354.*
Cass Commercial Corp.'s marketing sheets, acquired in Mar. 1995 from a contact at Southwestern Bell, which acquired same during general sales visit from Cass.
Cass Commercial Corp.'s Purchasing Card pamphlet, acquired in Mar. 1995 from a contact at Southwestern Bell, which acquired same during general sales visit from Cass.
Steven Marjanovic,CoreStates Putting Conrail Power Bills on Fast Track, American Banker, Feb. 2, 1995 at p. 19.
NBD Bank's Utility Payment Processing slides, acquired at a conference during a joint present
Anderson Michael W.
Matthews John W.
Merritt David L.
Cosimano Edward R.
Mellon Bank, N.A.
Reed Smith LLP
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