Case Study: The Cash Application Conundrum

Lisa TannerManager Credit and Collections

BEFORE…

Customer-Related Issues

– Multitude of payment forms (Check, ACH, Wire Transfer)

– Remittance Detail provided in variety of formats (Paper, EDI, Web, Email)

– Remittance line items may refer to alternate reference #’s (PO, BOL, etc)

– ERP Lockbox System requires direct reference to invoice # to auto-apply

Bank-Related Issues

–Bank Keying fees are expensive and produce low on-invoice hit-rate

–Labor intensive manual application for all non-standard and residual lines

Coleman’s Conundrum

Time consuming

Error-prone

Manual

Expensive

Cross Functional Challenges

• Poor operational data available relative to root cause margin losses– Consolidation of claims and claim types by check masks residual volumes

and prevents identification of potential core operational issues early in the process. (pricing, shortages, case pack, etc)

– Creates non value – added tasks to break out claims and types to prepare for credit issuance/rejection and settlement.

• Difficulty reconciling customer disputes requiring labor intensive research– Home Depot – Costco – West Marine write off losses in excess of 100K

due to inability to reconcile credits issued to claims taken.

THE INTERNAL RESULTS….

Let’s Hire an Army of IT Engineers

Software Upgrade Support

Backup/RestoreService Pack

Development Network issues

Our Business Needs…Security

Privacy

Reliability

High Availability

Let’s BuildHuge Data Center

Capacity Planning

Disaster Plan

Cooling Management

Server Crashes

THE EXTERNAL RESULTS…….

Hosting Players

Reliability, High Availability, Capacity Elasticity

Cloud Players

Built-in Redundancy

Virtually unlimited storage, computing power

You have to manage reliability, fail over yourself

Bring your own or rentservers to increase capacity

Hosting Players

Often and dearly

Your contracts

Cloud Players

Pay As You Go

Pay only what you use

OK, now tell that to the business owner

How most CEO’s would feel…

HighRadius Solution

• End to End Automation– Rules Engine handles customer specific rules for invoice

matching, residual identification & coding, cash discount analysis.

– Data Aggregation Engine Amasses remittance detail from a variety of sources (Customer portals, Bank Websites, FTPs, Emails,) and formats (EDI, paper, web email etc.)

– Syndication Engine produces a single file specific to SAP allowing the ability to fully leverage standard ERP cash posting.

Benefits We Experienced…• Higher on-invoice auto apply rate 94% and improving• Same day cash application• Auto-create residuals and capture deduction detail• Reduced Post Audit losses• Reliable Operations reporting through improved residual

visibility– No more consolidation of claims

• Minimize keying errors• Software as a service:

– Adding new customers/rules does not require internal IT effort• No Additional Hardware• Free up resources for more value-added tasks (research &

analysis, collections, data entry of credits to relieve AR)

Questions?