Michael J. Martino is Director of Cash and Banking at CSX Corp. He is responsible for all cash management, commercial paper and short-term investing activity for CSX and its subsidiaries. He has a BA in economics from Fordham University and an MS in transportation from Northwestern University. A Certified Cash Manager, he is currently working on a strategic initiative to move more of CSX's customers to electronic payments.

I came into cash management in 1994, in the early days of the Financial Electronic Data Interchange era. I remember attending a conference that year in Chicago, sitting in on sessions that extolled the brave new world of EDI. This new technology promised to create an era of customer satisfaction, improved transaction accuracy and increased quality. Customers and vendors would now be called "trading partners," with an emphasis on communication and cooperation. In short, Financial EDI promised peace, love and harmony–not to mention better working capital management.

However, something happened on the way to the new age. Treasury managers began to delegate the payment process to the accounts receivable and accounts payable managers. While some firms such as CSX maintained a close working relationship among treasury, A/P and A/R managers, this was the exception more than the rule. Instead of trading partners and an emphasis on cooperation, the process began to devolve into competitive chaos. Instead of an atmosphere of "my bank product person will contact your bank product person, and we will set up your ACH payment to flow seamlessly from your A/P system into my A/R system and relieve the payables and receivables on our books," more often than not one or both sides of any payment transaction possessed little knowledge or appreciation of the mechanics of an electronic payment or how it can benefit both trading partners. Today, we have A/P people who tell us that they are only able to originate an ACH payment with no remittance information. They then can e-mail the remittance information separately in the form of an Excel spreadsheet, creating a new cash application nightmare when the remittance data must be remarried to the original ACH payment. And this is being offered as progress.

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