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How Automation Changes The Game For AR Teams

Automate Invoice

Client Case Studies

Our 5th generation cloud platform, Corrivo, launched in 2020. Since then, a number of multi-national corporates and UK businesses have begun using Corrivo to automate invoice creation and delivery, manage collections and track queries and disputes with greater ease. But there is often more behind a move to Corrivo than just the desire to improve efficiency in AR. It is often part of a broader strategic change – digital transformation, ERP migration, establishing a shared service centre for Order-to-Cash. Consequently, the impacts are wide reaching.

Here is a summary of what our clients situations were like before and after Corrivo. Last week, incidentally, we completed the EU roll out of a large supplier. They deployed Corrivo in 6 EU countries and made full use of the 15 on-screen languages that users can select from to personalise their view of Corrivo.

Credit Screening

Before: Credit screening was done once when setting up new accounts, but the availability of free resource to re-screen annually was limited.

After: Policies could be tightened to reflect increased credit risk in the market and unencumbered by a raft of inbound calls for copy invoice requests, the credit team had more time to devote to executing the newly tightened credit policies and the data with which to segment and prioritise accounts for re-screening.

Order Management

Before

The organisation was siloed – with order management being the province of sales and operations – fulfilment and shipping were not connected to AR. Invoices would go out and AR would have little or no idea why customers disputed invoices – they were unaware of delivery failures or product returns. This made the job of AR teams as much that of an investigator or detective as a that of a finance professional. This caused a drain on resources in AR but also consumed time in operations, with a constant back and forth of emails and phone calls to try and establish the issue. Written off debt levels were higher than desirable.

After

Order management and invoicing were integrated in a number of ways. Firstly, the invoice was created directly from the order data, which was not released to AR until fulfilment and delivery were confirmed. Secondly, all the supporting documents such as proof of delivery notes are made available with the order data. Corrivo only sends invoices when all the expected proof of delivery notes were also available to present with the invoice. Thus, invoices were not sent until split deliveries had completed.

This reduced the number of queries and disputes received. Thirdly, all queries and disputes were managed within Corrivo so the credit team did not have to flick between different email systems and file storage – a full audit trail was kept in Corrivo against the account and the credit team could reach out to internal and external stakeholders, such as distribution partners, and keep all records in one place: easy. Faster case resolution and a higher close rate meant that written off debt levels dropped and cash flow is constantly improving.

Customer Service

Before

Inbound calls regarding invoices would often land with Customer Service. This was a blind spot for AR teams as the two areas worked on separate systems. Information went missing in the transfer of messages from Customer Service to AR like a game of Chinese Whispers. Both teams found it difficult to collaborate effectively, which hampered attempts to deliver excellent customer service and achieve high customer review scores.

After

With queries and disputes managed in Corrivo the audit trail of all contact with the customer could be kept in one place. Customer Service teams also use Corrivo, so should a call land with them, notes can be taken before transferring the call or case to the AR team. Data regularly output from Corrivo in CSV format is reabsorbed into the ERP system so both front line Sales teams and Customer Service teams could access a full picture of the customer account, including seeing when or why an account has been put on stop.

Collections

Before

Collectors focused on the oldest invoices – i.e., the most aged debt. The longer an invoice goes unpaid, the less chance there is of it being paid, so this approach was ineffective in reducing aged debt. However, the systems used prior to Corrivo had little capacity to sort and segment data. They were unable to prioritise collections activity on any other criteria than the days overdue. This meant many missed opportunities to tackle easy or high value overdues first and made the role of collector rather demoralising. Attachments to emails went missing. Letters went out by post with no guarantee that the customer had ever read the letter – especially during periods of remote working. Collections teams struggled to improve their close rate.

In cases where the business outsources collections to a third party, only a limited amount of information was made available to the collectors through their system.

After

Collections teams could be organised around customer segments – high value customers, regional groups, or high-volume customers. The workload of each collector could be organised based on age, value, customer criticality as needed, allowing them to have the most impact with the least effort. Some companies using Corrivo only make calls to customers that spend over a threshold per month and automate all reminders and Dunning letters to low value, low volume customers.

Credit teams are able to be more dynamic with their credit policy and change the parameters by which an account receives only automated letters, and no outbound calls from Collectors. Collectors can see when customers have not retrieved their invoices and can step in before invoices become overdue to find out why the customer has not attended the invoice. The result is a net reduction in overdues, more time for the team and the ability to focus on earlier aged debt, where there is a higher chance of resolution, rather than working in reverse, from the oldest aged debt with the lowest chance of resolution.

Cash Allocation

Before

In particular for companies selling to small businesses for which a substantial proportion of invoices were paid by card online, the process of reconciliation was arduous. Manual cross referencing of payments received to invoices was the only option since references often failed to match up.

After

Transaction references for card payments and invoice references were passed, together, back to the allocations team making it easier to reconcile card payments, easier to create Direct Debit files for those customers that pay that way, and easier to match up ACH payments received too.

Summing Up

How different departments work together is often driven by how their respective systems work together. With Corrivo it is possible to create tight integrations with other systems – ERP, accounting, CRM, data visualisation etc. It allows AR teams the freedom to use a specialist tool yet gain more integration and collaboration than would be possible if only working in the core system. The total effect is an improvement in all AR metrics from receivables turnover to DSO, and a level of cross departmental collaboration that makes the customer experience a joined up one, from Order through to Cash.

David Harris

Author David Harris

David Harris is the Business Development Executive at Data Interconnect. Dave works with companies planning the implementation of Corrivo, the cloud-based credit control software which improves cashflow, minimises aged debt and streamlines processes for finance departments. If you would like to know more, contact Dave on: Davidh@datainterconnect.co.uk

More posts by David Harris

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