otc best practices - cforia software · 2015-07-02 · best practices can be easily deployed a...

Greg Coulter, Managing Director

Cforia Inc. USA +1.866.859.1054 / +1.818.871.9687 UK +44 (0) 203.286.0039 www.cforia.com

OTC Best Practices in FSSC Environments

June 23rd, 2015

Lyle Wallis, CCE

VP Credit Research Foundation

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=RqvoeIgz-K7fTM&tbnid=3D1u-8sVyl-yjM:&ved=0CAUQjRw&url=http://www.truckerclassifieds.com/company_profile/marten_transport&ei=G1X5UqaMI4-MyAGOrYGwBg&bvm=bv.61190604,d.b2I&psig=AFQjCNEYmwSvZtJOHnW50XyhOZ0WhKQPWA&ust=1392158347072053

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CRF FSSC Webinar Agenda

Welcome

CRF Platinum Sponsor Intro

FSSC OTC Best Practices

Q & A



CRF Platinum Partner

For 15 years Cforia Software has served over 230 customers managing $240B of Working Capital in 55+ countries

Cforia’s sole focus is delivering technology transformation to streamline order to cash (OTC) processes and results in Local, Hosted and Financial Shared Service Center Environments

Best practices examples are based on direct experience with a global enterprise customer base

Cforia Software is also a continuing contributor to CRF News & Management Review publications



CRF Guest Speaker Today

Chris Caparon has led the

implementations of over 230 Order-

to-Cash (OTC) Improvement

Projects globally, integrating real-

time data across multiple ERPs

Systems, Countries, Currencies

and Languages significantly

impacting DSO/DBT and available

Working Capital.

Chris has degrees in both Electrical

and Computer Engineering from the

University of Michigan

Chris Caparon

COO, VP Professional Services

Cforia Software



Cforia Clients Studied

http://rtcompanystore.com/default.aspx

http://rtcompanystore.com/default.aspx

http://www.bray.com/

http://www.bray.com/

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Cforia Global Deployments

230 Cforia clients in 55 countries managing $240 Billion in working capital across 150+ million yearly transactions



State of Global WC Today

2014 Working Capital Management Survey: “In the US, 51% of

the companies included in our research reported a deterioration

in working capital and receivables performance.”

2014 Global Working Capital Survey: "Working capital remains an

obvious and key source of cash, but relative working capital

management performance has stagnated over the last five

years.”



FSSC Defined

Shared Services Organization (SSO): Business model enabling resources of a common operational discipline to be utilized across an entire organization (e.g. PTP, RTR, T&E and OTC)

Financial Shared Service Centers (FSSC): Designed to drive better customer service, lower operating costs, reduce duplications, simplify procedures and processes and deliver better overall analytics and facilitate continuous F&A operational improvements

Shared Service Organization (SSO) are particularly well suited for back-office operations, like Order-to-Cash (OTC) - especially Collections Prioritization and Cash Acceleration, Dispute and Deductions Management, Cash Application and Credit Provisioning, Decisioning and Risk Analytics.



Challenges with Distributed Model

1. Organizational structures with solid line reporting to local management and dotted line reporting to corporate finance

2. Best practices are impossible to scale, replicate and produce predictable outcomes

3. Duplications of global finance and & accounting efforts

4. Global reporting and a single view of financial data can be difficult to impossible if the organization has grown through M&A

5. Collectors from multiple BU's calling same Client payables department contacts - multiple times a day

6. Universal and real-time credit policies are difficult to enforce across that business model



Distributed OTC Services

Why does MedCo

Supplies call me

so many times ?

BradCo AP

BradCo

Cust # 341

BradCo

Cust # 458

BradCo

Cust # 231

BradCo

Cust # 981

BradCo

Cust # 312

ERP 1Braces

Divison

FTE 1

BradCo

Cust # 887212

BradCo

Cust # 674391

BradCo

Cust# 572122

BradCo

Cust# 458231

BradCo

Cust# 883011

ERP 3Recovery & Rehab

Products Div.

FTE 3

BradCo

Cust # F321

BradCo

Cust # F493

BradCo

Cust # F401

ERP 2Implants and Joint

Replacements Div.

FTE 2



Consensus FSSC Goals

1. Optimizing FTE allocation and efficiencies

2. Increased Customer Responsiveness -

make doing business with your company

easier

3. Providing a world-class experience to

internal customer(s)

4. Deliver focused and quantifiable financial

improvements

5. Cultivate continuous improvement

processes within financial supply chains



Financial Benefits of FSSC

Reducing Operating Costs o Maximizing FTE Performance (How measured?)

• Increase # of customers & transactions per FTE

o Labor Arbitrage

• Reduce the cost/FTE’s of outsourced customer portfolio

components

o Paper

• Billing, postage, supporting documentation storage

o Facilities Optimization

o Banking Fees

• Lock box and processing fees

Improving Financial Performanceo DSO/DBT reduction releasing working capital and decreasing

WACC related expenses

o Compress Disputes and Deductions Resolution & Prevention

o Minimize Reserve Balances and Write-Offs



FSSC Configuration #1

The decentralized model is reorganized to exchange the dotted

and solid line responsibilities without any physical changes

Change reporting structure, centralize command and control over

OTC to a central corporate resource (or one per geocenter)

Benefits

Best practices are enabled

Focused FTE activity drives financial performance

Common KPI and reporting can be enabled depending on the

number of systems being used

Challenges

# transactions & customers managed per FTE is unchanged

FTE utilization is often times less than full time

Fixed costs are unchanged



The centralized model

Both the organizational structure and the physical locations of the

FTE’s are centralized by geocenter

Benefits

Best Practices can be implemented across FSSC

Overhead optimized as the # transactions & customers

managed per FTE increases

FTE utilization is 100%

Common KPI & Analytics Enabled Across Systems

Challenges

Loss of local customer and product knowledge puts customer

experience at risk

Internal customers (business units) are now physically

disconnected from supporting finance resources





A hybrid centralized model with captured offshore FSSC

Benefits

Best practices can be implemented

Overhead is optimized through labor arbitrage

FTE utilization is 100%

Common KPI and reporting can be enabled depending on the

number of systems being used

Challenges

Loss of local customer and product knowledge puts customer

experience at risk

Cultural, language and access to FTE talent pool must be

managed

FTE turnover at remote location

Disputes management is problematic

Reporting is a challenge, especially if a BPO is engaged



Challenges to Optimizing FSSC

Multiple ERP and billing systems of record

FTE will be aligned by ERP system and not by customer

portfolio

Multiple touch points across FSSC for each common customer,

often times to the same AP contact

More than one customer number/bill-to for the same customer

within ERP system (within one company, across many)

Multiple touch points across FSSC for each common customer

FSSC’s manage more than just one type of All customers are

not created equal

Small, mid-sized, national, intracompany, export and other

types of accounts all require different treatment methods



Challenges to Optimizing FSSC

FSSCs manage many different sizes of customers and types of

transaction

Call-centric customer management is the most expensive

treatment method. Need to align treatment method with

customer type

Collections vs. disputes handling mixed within one ledger

Disputes management is a critical requirement for FSSC to deliver

a great customer and internal customer experience

Reporting, Dashboards and FSSC metrics are not delivered well by

generic ERP software



Best Practices in FSSC

ERP and O2C system consolidation

Customer harmonization and portfolio optimization

Zero touch collections for small account treatment

Mid-size to large account management

Proactive collections

Disputes and deductions management

Reporting, dashboards and metrics



Multiple ERP Consolidation

Aggregate data to create a single database to drive your

FSSC

Data includes data outside of your ERP system

Credit Bureau Data, Payment Behavior, Scorecards

Imaging of documentation (invoice reprints, shipping

documents and images, POD’s, etc…)

Best practice is to synchronize in near real time to keep the

FSSC tightly tied to source systems

Best practice is to enable bi-directional transactions where

needed



Best Practices : Multi-ERP / System

Option 1 – Migrate to single ERP instance

Pros: Single worldwide instance benefits the entire enterprise

Cons:

o Not driven by FSSC but by IT and the business. This may

not be an option

o Expensive, time consuming and there is a significant cost

of delay

o M&A strategy is always ahead of IT execution

Option 2 – Utilize an O2C 3rd party application

Pros

o Can be driven by FSSC to solve O2C problem (always an

option)

o Less expensive than single ERP project and much quicker

o Built specifically to optimize FSSC challenges

o Quantifiable and justifiable ROI

Cons

IT pushback and resource constraints



Consolidated Data

Cforia DB

C&C

Workbench

Dashboards

AR DB

Cash

Application

Automation

Cash Application Write-Backs to ERPs

Customer

Self Service

ERP 3

ERP 2

ERP 1

Email and Fax

Servers

Database Server ApplicationsInvoice

Copies



Benefits to Single AR Database

Best practices can be easily deployed

A global view of cash - global reporting in seconds and minutes

and not days or never

Credit management can be done from a single location across

all the dependent customers/ERP systems – total visibility

FSSC is scalable independent of IT strategy and resources

Customer experience is maximized because of access to a 360

degree view of enterprise data

Internal customer experience is maximized because of

transparency and visibility



Customer Harmonization

Do not align FTE’s by ERP system or brand but by

portfolio

Consolidate like customers into a single point of contact

This is done by country because of currency, language, bank

accounts and culture

Multiple Brands must be taken into consideration

Even FSSCs using a single ERP systems can leverage this

technique

Allows the FSSC to be infinitely scalable and support a

companies M&A strategy



Current State

BradCo

Cust # 341

BradCo

Cust # 458

BradCo

Cust # 231

BradCo

Cust # 981

BradCo

Cust # 312

ERP 1Braces

Divison

FTE 1

BradCo

Cust # F321

BradCo

Cust # F493

BradCo

Cust # F401


Replacements Div.

BradCo

Cust # 887212

BradCo

Cust # 674391

BradCo

Cust# 572122

BradCo

Cust# 458231

BradCo

Cust# 883011


Products Div.

FTE 3FTE 2

Why does MedCo

Supplies call me

so many times ?

BradCo AP

MedCo Supplies SSC



Customer Harmonization

BradCo

Cust # 341

BradCo

Cust # 458

BradCo

Cust # 231

BradCo

Cust # 981

BradCo

Cust # 312

ERP 1Braces

Divison

Brenda

BradCo

Cust # F321

BradCo

Cust # F493

BradCo

Cust # F401


Replacements Div.

BradCo

Cust # 887212

BradCo

Cust # 674391

BradCo

Cust# 572122

BradCo

Cust# 458231

BradCo

Cust# 883011


Products Div.

MedCo Supplies

is easy to do

business with !

Mary Jo

BradCo AP

BradCo Consolidated Customer

Hierarchical View of all Invoices across all ERP Systems

1 call replaces 3 calls



Global View of Cash

BradCo

Global

(USD)

BradCo

Switzerland

(CHF)

BradCo

Germany

(EUR)

BradCoBradCo

BradCoBradCo

Invoice InvoiceInvoice InvoiceInvoice InvoiceInvoice Invoice

ERP 1 ERP 2 ERP 1 ERP 2



Case Study Example

Multi-billion dollar medical device manufacturer grew thru M&A and

had a common customer base across 5 operating divisions running

on different ERP systems of record (3x legacy, 1 SAP, 1 Oracle)

Multiple customer records existed within each ERP system for the

same customer/AP contact

Went to shared service center without automation and did not see

the FTE efficiencies expected

Went with AR automation solution to create single AR database to

manage FSSC

FTEs assigned at consolidated level

Benefits

5-1 scaling of FTE/customer

20-1 scaling of customers/FTE

Customer now has one point of contact to manage entire

relationship

20% reduction in DSO



Small Account Treatment

Methods Zero touch collections for small customers (100% portfolio

coverage)

E-dunning process to replace call-based collections

o One button press can replace 100s of phone calls (mass send)

Enable customer self-service and online payments

o Customers can reprint their own invoices and statements

o Pay their bills on line via ACH, credit card or other

Automate cash application for all online payments with 100% hit

rate

Only call these customers when required

o Credit risk class is high

o Customers who only respond to calls vs. dunning

o Other exceptions



Lifecycle of an Invoice



Benefits

Exponential scaling of customers per FTE

100% cash application accuracy

Outstanding customer experience



Mid-Large Acct. Treatments

Midsize accounts tend to be more call-centric and have more

complex ledgers than small accounts o Reconciliation more than dialing for dollars

Eliminate call prep time by segregating aging by clean (non-

disputed invoices) and dirty (exceptions like disputes, deductions,

UAC, credits, etc) receivables across multiple currencies (if

necessary)

Prioritization of these calls must be predicated on driving maximum

cash flow – How is their work queue aligned with cash flow? o A combination of transactional status (stage of collections) and

customer delinquent clean receivables balance

o Do not overwhelm collectors with non-prioritized action items that

are not directly tied to cash flow generation

Do not call volunteerso Use DBT trending and # touches MTD metrics to optimize



Benefits

Improve collector efficiency by 30+ % by minimizing call prep

time and not calling customers who don’t need to be called

Optimize cash flow by taking a holistic approach to prioritization

Use the appropriate prioritization logic to ensure the right

accounts are being touched

Invoice status and value combined with clean

receivables customer balance will ensure each FTE call

will maximize cash flow

Mid-Large Acct. Treatments



Proactive Collections

Large invoices defined – The pool of transactions in any

organization that materially impact cash flow

Large invoices must be excluded from normal collections

processes

o They tend to be disputed or require more engagement to obtain

payment

Large invoices should be engaged pre-term to determine payment

status

o Significant for cash flow forecasting

o Significant for impacting FSSC performance

Disputes will be identified pre-term and significantly compress the

delay in resolution cycle time



Disputes identified / coded by type

All supporting documentation is digitized and attached to dispute

Disputes must be routed to responsible party for resolution

Aging of disputes by responsible party is critical

Implement root cause analysis system on closed disputes

By type and disposition method

Disputes reporting should be a critical KPI for FSSCs as it directly

impacts the internal/external customer experience

In organizations with complex disputes and deductions it is a best

practice to segregate responsibilities between collections and

disputes management FTEs

Proactive OTC & Disputes



Benefits

Significant reduction in dispute cycle times

Increase in cash flow and cash flow reporting

Improve internal/external customer experience

Can see efficiency gains in collections/disputes with segregation of

duties and FTE sub-process focus

Proactive Collections



Without a single O2C database reporting is difficult to impossible

How long does it take you to create your month end reports?

The best metrics and KPI’s are not delivered by generic ERP

software

Month to date (MTD) customer touches & days from touch

Number of touches / dispute and deduction

Cost per touch for disputes is powerful

Days beyond terms instead of DSO

Trending and historical analysis of all metrics

Credit risk classifications

Utilize multi-currency customer hierarchy for global visibility for your

strategic accounts

Credit exposure, payment trends by geocenter/customer, etc…

Providing dashboards to internal customers improves their

experience

Reporting Dashboards and Metrics



Example



The goal of FSSC is to simultaneously reduce cost, improve

financial performance while delivering an outstanding

internal/external customer experience

Optimizing performance requires a combined organizational

and technology strategy that is scalable and repeatable

Tracking metrics and measurements over time is critical to

validate implemented best practices

In Summary



Top 10 OTC Areas for O2C

1. Accounts Receivable Collections Methodology

2. Invoice Dispute and Deductions Resolution Handling

3. Order Hold/Release Decisioning and Processing

4. Application of Invoice Payments - Cash App

5. Optimizing Lockbox Handling

6. Generating Reports and Departmental Performance Analytics

7. Billing Process Methods

8. Multi-ERP Consolidation & Global Customer Management

9. Credit Risk Management

10. OTC Organizational Effectivity

** See addendum slides for detail on each topic



CRF Webinar Q&A

Lyle Wallis

http://www.crfonline.org/

Chris Caparon

ww.cforia.com

http://www.cforia.com/



FSSC Value Propositions

Global Visibility across Multiple ERP Languages & Currencies

Finance Data Aggregation & Integration

Global Parent/Child Receivables Portfolio Roll-Up & Credit Risk

Mitigation

Clean vs. Dirty Receivables Segmentation & Prioritization

Credit, Collections and Dispute Management Workbenches

Order to Cash Process Improvement, Workflow, Escalation &

SLA’s

Remittance Processing with Auto Application of BAI, BAI2,

MT940, EDI 820, Excel and CSV Payment Data

Finance Analytics, Departmental KPI’s, CEI’s and Exec

Dashboards



CRF FSSC Addendum

FSSC Key Operational Areas

• Order To Cash (OTC)

Accounts Receivable Collections Methodology

Invoice Dispute and Deductions Resolution Handling

Order Hold/Release Decisioning and Processing

Application of Invoice Payments - Cash App

Lockbox Handling

Generating Reports and Departmental Performance Analytics

Billing Process Methods

Multi-ERP Consolidation & Global Customer Management

Credit Risk Management

OTC Organizational Effectivity



Collections Methodology

Observations:

50-60% AR portfolio coverage every 30 day cycle in order-to-cash

(OTC)

Call-Focused collections processes "Rainbow" of sticky note

reminders

Walls filled with filing cabinets and lots of dog-eared folders

Printed aged trial balance sheets with margin notes

Manual, Excel or other non-database driven prioritization

No hierarchical account aggregation for midsized, large, chains and

strategic accounts

Off-System/Manual Credit or Collections workflow & processes

Promise-to-Pay (PTP)reminders are in calendars, spreadsheet or

manual

No ability to separate sub-ledgers to optimize collections and disputes

performance

Not managing collections process via exceptions



Best Practices:

Segregation of "Clean" versus "Dirty" receivables to optimize resource

effectivity, minimize call prep time, improve reporting and streamlines

OTC sub-process

Client Portal for Self Service (e.g. Reprint Invoices, generate

statements, make disputes, make payments)

100% portfolio coverage every 30 days

"Free" customer touches via email/fax

Automatic generation of work queues by Segment, Treatment, Risk

Class and Specialization

Single solution for managing all aspects of AR Collections (No

“Alt+Tab”)

Full visibility of parent/child hierarchy for exposure, priority and work

queues

Prioritization PTP’s with auto closure




Average Project ROI's Realized:

Segregation of "Clean" versus "Dirty" receivables to

optimize resource effectivity, minimize call prep time,

improve reporting and streamlines OTC sub-process

Client Portal for Self Service (e.g. Reprint Invoices,

generate statements, make disputes, make payments)

100% portfolio coverage every 30 days

"Free" customer touches via email/fax

Automatic generation of work queues by Segment,

Treatment, Risk Class and Specialization

Single solution for managing all aspects of AR Collections

(No “Alt+Tab”)

Full visibility of parent/child hierarchy for exposure,

priority and work queues

Prioritization PTP’s with auto closure

50-60% AR portfolio coverage every 30 day cycle in order-to-

cash (OTC)

Call-Focused collections processes

"Rainbow" of sticky note reminders

Walls filled with filing cabinets and lots of dog-eared folders

Printed aged trial balance sheets with margin notes

Manual, Excel or other non-database driven prioritization

No hierarchical account aggregation for midsized, large,

chains and strategic accounts

Off-System/Manual Credit or Collections workflow &

processes

Promise-to-Pay (PTP)reminders are in calendars, spreadsheet

or manual

No ability to separate sub-ledgers to optimize collections and

disputes performance

Not managing collections process via exceptions

10-25% reduction in Days Past Term (or DSO)

40-50% improvement in Portfolio coverage

20-80% reduction in inbound call volumes about

invoice related issues

15-40% improvement in OTC resource productivity

Can absorb significant sales volume growth without

adding headcount




Dispute/Deductions Mgmt.

Observations:

Disputes not identified within payment term - typically 7-10 day

post-term discovery

Little to no ERP tracking of Disputes - Most coded as "Unknown"

Disputes recorded in spreadsheets

Disputes hidden in receivables pool

Little tracking or progress reporting

Few collaborative resolution tools

Little prioritization or segregation

Manual delays navigating vendor AP portals for status updates

Root cause analysis difficult or impossible



Best Practices:

"Pre-Term Touches" improving overall collections effectivity

AR automation tool tightly integrated with ERP and supporting

evidence (e.g. POD’s, imaging and digital docs)

Tracking case created and routed to resolution support teams

Cases prioritized by type, value and risk

Root-Cause analysis by code and resolution process >prevention

focus

Resolution Cycle compression methods

AP vendor portal automation to help streamline processes




"Pre-Term Touches" improving overall collections

effectivity

AR automation tool tightly integrated with ERP and

supporting evidence (e.g. POD’s, imaging and digital docs)

Tracking case created and routed to resolution support

teams

Cases prioritized by type, value and risk

Root-Cause analysis by code and resolution process

>prevention focus

Resolution Cycle compression methods

AP vendor portal automation to help streamline processes

Disputes not identified within payment

term - typically 7-10 day post-term

discovery

Little to no ERP tracking of Disputes - Most

coded as "Unknown"

Disputes recorded in spreadsheets

Disputes hidden in receivables pool

Little tracking or progress reporting

Few collaborative resolution tools

Little prioritization or segregation

Manual delays navigating vendor AP

portals for status updates

Root cause analysis difficult or impossible


10-50 % reduction in dispute resolution cycle times

100% Dispute and Deduction tracking

30-90% improvement in Root-Cause Tracking to help

eliminate chronic recurring upstream issues




Hold/Release Decisioning

Observations:

Multiple FTE’s reviewing and releasing customer held orders

Many “nuisance holds”

o Seasonality, blanket orders, parent/child challenges

ERP credit checking logic out of alignment with credit policy

Not integrating risk into credit checking process



Best Practices:

Managing by exception only

Modifying ERP credit checking process to minimize nuisance holds

Integrating risk into ERP credit checking algorithms

Leveraging bureau data and peer data

Implement proper parent/child credit granting




FTE’s releasing orders

Dual Cash App systems and screens

Manual electronic data interchange

automation

SWIFT MT940/942/95’s managed by people

and not automation systems ("electrons")

Credit checking optimization

Hierarchical Cash App approaches with flexible

matching rules for max hit rates

System based EDI automation

MT940/942/95 automation

Resource efficiency (up 50%+)

Automated Exception ID and handling


Headcount reduction

Improving order cycle time Reduction of bad debt

Increased customer satisfaction




Cash App & Pmt Resolution

Observations:

Auto-Apply rates below 90%


Manual electronic data interchange automation

SWIFT MT940/942/95’s managed by people and not automation

systems ("electrons")



Best Practices:

90%+ Match based on algorithmic cash application methodology

Hierarchical Cash App approaches with flexible matching rules for

max hit rates








Auto-Apply rates below 90%


Manual electronic data interchange

automation

SWIFT MT940/942/95’s managed by people

and not automation systems ("electrons")

90%+ Match based on algorithmic cash application

methodology

Hierarchical Cash App approaches with flexible

matching rules for max hit rates






15–80% operational cost savings

1-2 reduction in Days Past Term (or DSO)

20-50% reduction in inbound call volumes about

payment related issues

Increased customer satisfaction




Lockbox Handling

Observations:

High merchant bank lockbox fees

High manual lockbox related activity

1-3 day delays in payment processing and cash application

Keying errors, data transfer issues causing reduced hit rates



Best Practices:

Low or $0 Lockbox related fees

OCR solutions w/auto-cash automation

Minimum payment latency

OTC resource use optimization

Lockbox Handling





1-3 day delays in payment processing and cash

application

Keying errors, data transfer issues causing reduced hit

rates



1-3 day delays in payment processing and

cash application

Keying errors, data transfer issues causing

reduced hit rates


30-90% reduction in Lockbox relates fees

60-70% elimination of data transfer and keying errors

15-50% faster payment processing and cash

application

Lockbox Handling



Dashboards and Analytics

Observations:

Spreadsheets, Pivot Tables and PowerPoint graphics – manual &

time consuming reporting

Most AR activities are offline and require manual aggregation

Limited historical reporting

Blended& fragmented AR data makes precise metrics difficult

DSO is primary AR measurement

IT needed for any report changes or data mining / analytics



Best Practices:

Segmented days-beyond-term (DBT) measurements and granular

controls

DSO and best possible DSO

Full client transaction life-cycle visibility

Alerts on business best practices

Executive dashboarding, team goals and flexible user-managed

analytics

Ability to auto-generate reports& distribute metrics and analytics

Streamlined KPI’s and historical performance data reporting

Finance analytic independence from IT




Segmented days-beyond-term (DBT)

measurements and granular controls

DSO and best possible DSO

Full client transaction life-cycle visibility

Alerts on business best practices

Executive dashboarding, team goals and flexible

user-managed analytics

Ability to auto-generate reports& distribute

metrics and analytics

Streamlined KPI’s and historical performance data

reporting

Finance analytic independence from IT

Spreadsheets, Pivot Tables and PowerPoint graphics –

manual & time consuming reporting

Most AR activities are offline and require manual

aggregation

Limited historical reporting

Blended& fragmented AR data makes precise metrics

difficult

DSO is primary AR measurement

IT needed for any report changes or data mining /

analytics


80-95% elimination of Excel base reporting

70-80% increase in automated reporting to

management

New financial controls for improved decision making,

performance tracking and customer management





Observations:

40%+ physical mailing of invoices

Mailing service for invoice delivery

Centralized mail service vs. distributed

Not leveraging best practices in bulk postal rates



Best Practices:

Automated electronic delivery - fast, inexpensive delivery, flexible

options

Print/mail outsourced to specialists who can lower per piece costs

significantly




Automated electronic delivery - fast,

inexpensive delivery, flexible options

Print/mail outsourced to specialists who can

lower per piece costs significantly

40%+ physical mailing of invoices

Mailing service for invoice

delivery

Centralized mail service vs.

distributed

Not leveraging best practices in

bulk postal rates


50-95% elimination of physical mailing requirements

90% elimination of delays related to physical mail

activity




Multi-ERP & Global Customers

Observations:

Separate/distinct systems of record

Limited visibility of customer exposure across OTC systems

Disconnected Parent/Child relationships in systems

Collectors aligned by ERP screen and not by portfolio

Cross border consolidation not possible

Top 20 customer report takes from days to never



Best Practices:

Data consolidation of multiple systems

Global visibility and Client exposure

User definable customer hierarchies to minimize FTE touch points,

maximize visibility

Use of client payment metrics across all bill/ship-to from all systems

Align FTE’s by portfolio regardless of ERP system




Data consolidation of multiple systems

Global visibility and Client exposure

User definable customer hierarchies to minimize FTE

touch points, maximize visibility

Use of client payment metrics across all bill/ship-to

from all systems

Align FTE’s by portfolio regardless of ERP system

Separate/distinct systems of record

Limited visibility of customer exposure across OTC

systems

Disconnected Parent/Child relationships in

systems

Collectors aligned by ERP screen and not by

portfolio

Cross border consolidation not possible

Top 20 customer report takes from days to never


20-100% increase global client risk roll-up by

Parent/Child

20-50% resource efficiency through elimination of

redundant manual activity

High value strategic accounts globally visible for

optimal handling





Observations:

Manual provisioning of new credit lines, limits and terms

Manual credit scorecards

Manual integration of bureau data

Infrequent review of credit lines

Lack of payment behavior visibility

Credit risk not tied into collections process



Best Practices:

Auto and auto-assist in establishing new accounts

Automated & multiple scoring methods

Automated integration of bureau data

Frequent review of credit lines/exposure

Weighted/blended payment information

Hierarchical credit management for strategic accounts.




Auto and auto-assist in establishing new accounts

Automated & multiple scoring methods

Automated integration of bureau data

Frequent review of credit lines/exposure

Weighted/blended payment information

Hierarchical credit management for strategic

accounts.

Manual provisioning of new credit lines, limits

and terms

Manual credit scorecards

Manual integration of bureau data

Infrequent review of credit lines

Lack of payment behavior visibility

Credit risk not tied into collections process


20-50% efficiency improvement in Credit Provisioning,

Decisioning and Risk Analytics

40-80% rise on Credit Review frequency

15-50% reduction in credit risk from action taken

based on new analysis





Observations:

Decentralized AR Limited segmentation of OTC issues

Limited specialization of OTC teams

High replication of complex/time consuming issue resolution activity

Lower volume throughput across OTC operational teams



Best Practices:

Move to Shared Service Center

Specialized OTC process experts

Matrixed portfolio ownership(e.g. contracts, orders, collections, credit,

disputes)

Automated high yield issue segmentation and resolution treatments

Lower training costs, faster time to value

Increasing customer satisfaction




Move to Shared Service Center

Specialized OTC process experts

Matrixed portfolio ownership(e.g. contracts, orders,

collections, credit, disputes)

Automated high yield issue segmentation and

resolution treatments

Lower training costs, faster time to value

Increasing customer satisfaction

Decentralized AR Limited segmentation of OTC issues

Limited specialization of OTC teams

High replication of complex/time consuming issue

resolution activity

Lower volume throughput across OTC operational

teams


15-50% faster turn-around on OTC process execution

100% portfolio coverage each 30 day cycles through

automation touches

20-40% improvement in client issue resolution

resulting in improved client response


otc best practices - cforia software · 2015-07-02 · best practices can be easily deployed a...

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