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How CPG A/R Executives Are Using These Three Steps to Achieve Cash Excellence in 2022: Proven Strategies from Staples’ Leadership

Introduction

2021 turned out to be a relatively stable economic year since it was a transition period for businesses to re-strategize and correct some of their decisions from 2020. However, 2022 is going to be starkly different as the primary focus would lie on business scalability with revenue growth. CFOs and A/R leaders across CPG companies are looking to optimize their strategy from that of cash preservation to cash excellence. While cash preservation refers to the practice of managing spending, cash excellence refers to building a long-term cash culture that enables proactive liquidity management with strategic investment opportunities. Based on our discussion with George Uko, Credit and Collections Manager at Staples Promotional Products, we identified the top three critical areas that A/R leaders should work on to build a cash culture that helps create dollar-impact in the CFO’s office.
3 Critical areas for A/R leaders to create working capital impact in the CFO’s office.

Step 1: Improving the team's bandwidth by leveraging automation

In Deloitte’s Retail Industry Outlook,  digital acceleration emerged to be one of the most discussed topics to deal with the changing business dynamics in 2021. Additionally, George Uko noted that he sees automation as the key to eliminating repetitive, transactional tasks that have a low business impact.

Deloitte's Retail investment Priorities for 2021
Source: Deloitte analysis based on interviews with C-suite executives in the consumer products industry.

Global A/R leaders see automation as a pivotal element of their cash excellence strategy in 2022 and will be leveraging them to their full potential.

This trend is evident in the case of a company like Staples, a global stationary conglomerate, which automated its collections process from a manual mail set-up to an automated correspondence system. This gave the collectors more time to build meaningful relationships with the customers and hence get paid faster.

Step 2: Making data-driven decisions with real-time customer information

While A/R leaders are beginning to grasp the importance of automation, they also need to provide the team with the latest customer data and enable them to make more informed decisions. This data can be obtained from the sales team or received from external agencies like D&B, NACM, as well as from historical payment records, data from credit agencies, public financial statements, etc.

George also shares that CPG A/R leaders can leverage customer data to make strategic decisions that would allow their teams to:

CPG A/R leader’s role in strategic decision-making of the organization

Know more: AI-powered deductions validity prediction for CPG companies.

Step 3: Eliminate silos by promoting inter-team collaboration

To derive information about the customers and make data-driven decisions, it is critical for A/R teams to collaborate internally with the other teams in the finance department.

However, collaboration becomes increasingly challenging as the size of a company grows, especially in the case of enterprise CPG companies with a global supply chain and A/R operations based in multiple geographies. This is why finance functions should adopt a centralized system that provides customer account-level visibility across different teams.

See how A/R teams at Staples increased collections productivity and efficiency and reduced bad debt by 20% with HighRadius.

Through collaboration, A/R teams can become proactive enablers in sales expansion. For example, if credit teams share their repository of customer-related intel with the sales team, they can leverage that information to close sales opportunities & boost revenue.

A/R leaders enabling proactive expansion of sales operations

Conclusion

CPG-based A/R executives are going to be prioritizing cash excellence for better liquidity management, budget planning, and spend management. The way forward for A/R practitioners in 2022 is going to be leveraging automation for low-impact tasks, making data-driven decisions, and collaborating with partner functions to deliver exceptional customer experience.

Discover how George Uko, Credit and Collections leader at Staples was able to drive these changes and hence elevate the A/R team to a more strategic role in the CFO’s office.

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HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.