Cash Management and Receivables in 2020:
Transforming Treasury Forecasts with AI and
Machine Learning
Marinko Marijolovic
Director, Corp. Credit Services
ShurTech Brands, LLC
Shankar Bellam
Solution Engineering
HighRadius Corporation
Agenda
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Collections: Today v/s Future
Artificial Intelligence to Improve Collectors’ Effectiveness
How Robots Could Improve Efficiency
Bottom-line for Collections
5 Summary
Collections:
Today v/s Future
Generations of Technology
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2
3
4
ERPs like SAP, Oracle, IBM
and others to handle A/R
Centralization
Spreadsheets and excel
sheets are used for A/R
Digitization
Robotic Process
Automation(RPA) used to
automate processes
Automation
Machine Learning based
algorithms for proactive A/R
Artificial Intelligence
5
All A/R processes are
completely paper-dependent
Paper-based A/R
1
2
3
4
ERPs like SAP, Oracle, IBM
and others to handle A/R
Centralization
Spreadsheets and excel
sheets are used for A/R
Digitization
Robotic Process
Automation(RPA) used to
automate processes
Automation
Machine Learning based
algorithms for proactive A/R
Artificial Intelligence
5
All A/R processes are
completely paper-dependent
Paper-based A/R
Expectations from AI
Effectiveness + Efficiency
Artificial Intelligence for CollectionsExpectations
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2
Improve Scalability
Reduce Credit Risk Exposure
Artificial Intelligence
to Improve Collectors’
Effectiveness:How well your collectors are able to collect?
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2
How AI Could Impact Collectors’ Effectiveness
Dynamic Prioritization of Collectors’ Worklist
Skip Invoice Tracing for Customer Portals
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2
How AI Could Impact Collectors’ Effectiveness
Dynamic Prioritization of Collectors’ Worklist
Skip Invoice Tracing for Customer Portals
Worklist prioritization
Aging
Past Due Amount
Disputed Amount
Credit Limit, % Utilization
Risk Category
Broken Promise to Pay
Dunning Level
Based on static
parameters
Reactive Collections Based on Static Factors
Worklist prioritization
Aging
Past Due Amount
Disputed Amount
Credit Limit, % Utilization
Risk Category
Broken Promise to Pay
Dunning Level
Based on static
parameters
Proactive Collections Driven by AI
Dynamic, driven by AI
Predicted
Invoice
Payment
Date
Past
payment
behaviour
Current
open
invoices
Machine
learning
algorithms
Predicted Payment Date
Collections Management With AI
Open
invoices
Payment
date
predicted
Strategize dunning for each open
invoice
Start dunning process
On-time payment by customers
Close
invoices
For invoices with high delay predictions
1 2 3 4 5 6 7
Request upfront payment for accounts or particular
invoices
Updating credit terms to proactively minimize delay
in payment
Require payment commitments at the time
of order creation
Impact Of Proactive Collections On Bottom-line
Benefits Of Proactive Collections Management
Invoices
Average Delay-
Reactive
(days)
Average Delay-
Proactive
(days)
%
All Delayed Invoices 10.7 5.8 45.8%
Invoices delayed by > 15 days 34 20 41.1%
Operational Approach:
Do not wait for invoices to be past-due
Take proactive actions based on predicted delay
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2
How AI Could Impact Collectors’ Effectiveness
Dynamic Prioritization of Collectors’ Worklist
Skip Invoice Tracing for Customer Portals
Manually Download Invoices from Portals
ERP
Customer PO No. Sales Invoice Date Amount
MyRetail 1122334 aa9990 1011
BuyShop 1122335 bb9991 202
BuyShop 1122336 bb9992 987
BuyShop 1122337 bb9993 3001
BuyShop 1122338 bb9994 908
BuyShop 1122339 bb9995 …
BuyShop 1122340 bb9996 …
MyRetail 1122341 aa9997 …
MyRetail 1122342 aa9998 …
MyRetail 1122343 aa9999 …
MyRetail 1122344 aa10000 …
MyRetail 1122345 aa10001 …
MyRetail 1122346 aa10002 …
MyRetail 1122347 aa10003 …
MyRetail 1122348 aa10004 …
MyRetail 1122349 aa10005 …
MyRetail 1122350 aa10006 …
External Invoice System
Sales Invoice Date Paid Amount Status Expected Date Payment ID
aa9990 1011
bb9991 202 Processing … 983748
bb9992 987Check
released… 983749
bb9993 3001Verified
Invoice… 983750
bb9994 908 … … 983751
bb9995 … … … 983752
bb9996 …
aa9997 … … … 983754
aa9998 … … … 983755
aa9999 … … … 983756
aa10000 …
aa10001 … … … 983758
aa10002 … … … 983759
aa10003 … … … 983760
aa10004 … … … 983761
aa10005 … … … …
aa10006 … … … …
Collector
Challenges
ERP
Customer PO No. Sales Invoice Date Amount
MyRetail 1122334 aa9990 1011
BuyShop 1122335 bb9991 202
BuyShop 1122336 bb9992 987
BuyShop 1122337 bb9993 3001
BuyShop 1122338 bb9994 908
BuyShop 1122339 bb9995 …
BuyShop 1122340 bb9996 …
MyRetail 1122341 aa9997 …
MyRetail 1122342 aa9998 …
MyRetail 1122343 aa9999 …
MyRetail 1122344 aa10000 …
MyRetail 1122345 aa10001 …
MyRetail 1122346 aa10002 …
MyRetail 1122347 aa10003 …
MyRetail 1122348 aa10004 …
MyRetail 1122349 aa10005 …
MyRetail 1122350 aa10006 …
External Invoice System
Sales Invoice Date Paid Amount Status Expected Date Payment ID
aa9990 1011
bb9991 202 Processing … 983748
bb9992 987Check
released… 983749
bb9993 3001Verified
Invoice… 983750
bb9994 908 … … 983751
bb9995 … … … 983752
bb9996 …
aa9997 … … … 983754
aa9998 … … … 983755
aa9999 … … … 983756
aa10000 …
aa10001 … … … 983758
aa10002 … … … 983759
aa10003 … … … 983760
aa10004 … … … 983761
aa10005 … … … …
aa10006 … … … …
Collector
• More time spent on retrieving payments statuses
• Significant time lag between invoice updates and follow-ups
• For invoices with discrepancy, customers would block payments and collections
team would not realize until last minute
Skip Invoice Tracing- Auto Download
ERP
Customer PO No. Sales Invoice Date Amount
MyRetail 1122334 aa9990 1011
BuyShop 1122335 bb9991 202
BuyShop 1122336 bb9992 987
BuyShop 1122337 bb9993 3001
BuyShop 1122338 bb9994 908
BuyShop 1122339 bb9995 …
BuyShop 1122340 bb9996 …
MyRetail 1122341 aa9997 …
MyRetail 1122342 aa9998 …
MyRetail 1122343 aa9999 …
MyRetail 1122344 aa10000 …
MyRetail 1122345 aa10001 …
MyRetail 1122346 aa10002 …
MyRetail 1122347 aa10003 …
MyRetail 1122348 aa10004 …
MyRetail 1122349 aa10005 …
MyRetail 1122350 aa10006 …
External Invoice System
Sales Invoice Date Paid Amount Status Expected Date Payment ID
aa9990 1011
bb9991 202 Processing … 983748
bb9992 987Check
released… 983749
bb9993 3001Verified
Invoice… 983750
bb9994 908 … … 983751
bb9995 … … … 983752
bb9996 …
aa9997 … … … 983754
aa9998 … … … 983755
aa9999 … … … 983756
aa10000 …
aa10001 … … … 983758
aa10002 … … … 983759
aa10003 … … … 983760
aa10004 … … … 983761
aa10005 … … … …
aa10006 … … … …
Collector
Skip Invoice Tracing- Tracking Status
ERP + External System Data
Customer PO No.Sales
InvoiceDate Amount
Sales
Invoice
Paid
AmountStatus
Expected
DatePayment ID
MyRetail 1122334 aa9990 1011 aa9990 1011 Follow Up
BuyShop 1122335 bb9991 202 bb9991 202 Processing … 983748
BuyShop 1122336 bb9992 987 bb9992 987 Released … 983749
BuyShop 1122337 bb9993 3001 bb9993 3001 Verified Invoice … 983750
BuyShop 1122340 bb9996 … bb9996 … Follow Up
MyRetail 1122343 aa9999 … aa9999 … … … 983756
MyRetail 1122344 aa10000 … aa10000 … Follow Up
MyRetail 1122345 aa10001 … aa10001 … … … 983758
✓ Efficient capture of unprocessed/skipped invoices and status on other invoices
✓ Scheduling immediate follow-ups for the invoices not updated for payments
✓ Productive utilization of collectors effort by automation of low-value tasks
✓ Quick identification of invoices with discrepancy that customer may block for necessary follow-up
Benefits of Skip Invoice Tracing
Improve
Effectiveness
Future of Collections:
Skip Invoice Tracing +
Dynamic Prioritization
Future of Collections
Skip Invoice
Tracing
Dynamic
Prioritization
Case Study: AI predicting payment date
Account 1 Account 2
Predicted Payment Date
20 days past-due
Predicted Payment Date
10 days past-due
Low Priority Follow-up High Priority Follow-up
Case Study: What if account 2 is Walmart?
Account 1
Predicted Payment Date
10 days past-due
Predicted Payment Date
20 days past-due
Low Priority Follow-up Medium Priority Follow-up
Case Study: Skip Invoice + Dynamic Prioritization
Account 1
Predicted Payment Date
10 days past-due
Lower Priority Follow-up High Priority Follow-up on these 5 invoices
Predicted Payment Date
20 days past-due
Traced 5 Invoices
that are not set up
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Summary:How AI Could Impact Collectors’ Effectiveness
Dynamic Prioritization of Collectors’ Worklist
Skip Invoice Tracing for Customer Portals
Future of Collections: Skip Invoice Tracing + Dynamic Prioritization
How Robots Could
Improve Efficiency:How fast your collectors are able to collect?
Past v/s Present: Automation in Collections
Past Present
Scanning and printing paper documents
Drafting and sending emails, mails, fax
Aggregating information from all documents
in electronic format
Single source of truth
Static prioritization of worklist
Automatic correspondence based on
pre-defined templates
Impact on Collections Efficiency
Past Present
Scanning and printing paper documents
Drafting and sending emails, mails, fax
Aggregating information from all documents
in electronic format
Single source of truth
Static prioritization of worklist
Automatic correspondence based on
pre-defined templates
Collectors handle 30-40 accounts
Collectors handle 50-60 accounts 50% increase in the number of
accounts handled by collectors.
✓ Eliminate the need for scanning and printing - paper independent solution
✓ Automated collection worklist prioritization based on best practices
✓ Increased bandwidth for collectors to make necessary calls while sending
automated correspondence to low risk accounts
✓ Handle more accounts with lesser number of resources
Benefits of Automation
Improve
Efficiency
Future of Collections:
Robots Making Calls
Robots Making Calls
Hey, you have got a past due balance of X
for A, B, C invoices
if you would like to make a payment,
press and enter your credit card
information
1
Or if you would like to talk to someone,
press 2.2
Sure
1
Robot
Customer
A $8.4 Billion hospital with 10 regional hospitals
and 19 family health centres in north-east Ohio,
and hospitals in Florida and Nevada.
Is this Possible in A/R?
Hey, you have got a past due balance of X
for A, B, C invoices
if you would like to make a payment,
press and enter your credit card
information
1
Or if you would like to talk to someone,
press 2.2
Sure
1
Robot
Customer
For low risk accounts
Not for Large Accounts and Delinquent Customers
Hey, you have got a past due balance of X
for A, B, C invoices
if you would like to make a payment,
press and enter your credit card
information
1
Or if you would like to talk to someone,
press 2.2
Sure
1
Robot
Customer
Need human interaction for high and
medium risk delinquent customers
Future of Collections
Accounts
Receivables
Robot
Accounts
Payables
Robot
Bottom-line for
Collections
Focus on Customer Engagement
Automatic gentle reminders for low/medium risk customers and calls only to high risk customers
No Dial for Dollars
Streamlined internal workflows to ensure single point of collaboration
No Multiple Touchpoints
Predict Payment Behavior • Predict delinquent accounts and provide factual data to sales
• Sales can negotiate for early payment or promise to pay
Scientific Analysis to Surgically Guide Sales
A/R powered by AI How it guides sales to make better decisions
Drill Down Reporting• Forecast bad debt write offs
• Target profitable customers for upsell or cross sell
Predict Blocked Orders • Revise sales order for customers with blocked orders
• Block release of large orders unless payment/commitment is done
Better Cash Forecasting
Cash Forecasting FuturePredictive Analysis + Single Source of Truth
Use of Siloed BI Tool Integrated cash forecasting tool
Based on Static Assumptions AI to self-learn and improve dynamically
Disparate Data Sources Single Source of Truth
Cash Forecasting TodayManual, Time Consuming
Summary
Summary
Robots Automatically handle
Low Risk Accounts
Collectors improve collaboration
with internal teams to deal with
High Risk Accounts
Scalability Improved Credit Risk Exposure Reduced
The Credit Manager is now more comfortable onboarding riskier customers
About
HighRadius
Copyright © 2018 HighRadius Corporation
43
HighRadius at a Glance
375+ Clients
#1 in Fortune1000 market
$500 Billion of receivables
processed annually
750+ employees globally
Integrated Receivables Platform for
the entire credit-to-cash cycle
• FinTech cloud-based software company
• Founded in 2006
• HQ in Houston, Texas
Select Customers
Integrated Receivables Cloud Platform
$50 Million secured in growth funding
from Susquehanna Growth Equity$
Copyright © 2018 HighRadius Corporation
44
Integrated Receivables Cloud Platform
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