9 Consumer Goods Companies Highlight Must-Address Collections Challenges
to Streamline Cash Flow

What you’ll learn


  • Collections challenges across geographies gathered from major consumer goods companies
  • Impacted productivity due to pressure on collections teams – overworked collectors, disparate collections data and lack of prioritization
  • Lesser known collection challenges that exists today that you might be unaware of

“We have made the payment, should reach you in a week.”

“We would pay by the 3rd of next month”.

“We need a payment term extension,” 

“This is the third call from your end, and we have made the payment already.” 

These are some of the things that your collectors hear from customers daily. In the consumer goods industry especially, collectors face multiple challenges while executing their day-to-day tasks. Covering a vast customer base with inefficient processes and the lack of a centralized system to store collection data is just the tip of the iceberg.  

HighRadius spoke with A/R leaders across leading CPG  companies to understand their biggest collections challenges and strategies applied to fix the same. We are summarizing nine of the most critical collections challenges identified  from Consumer Goods Companies across the globe below: 

Challenge #1 One for Too Many, Too Many for One

Staples was struggling with a limited number of resources taking care of a large volume of receivables. 

Their A/R team had seven collectors managing 900-1000 accounts on an average individually, with aging buckets ranging up to 1000 days. It did not help that collectors had to gather information from across 20 different customer portals.

These accounts comprised mainly multiple parent-child scenarios, which further complicated the situation due to lack of visibility across critical accounts and minimal transparency across the outsourced ones.

Learn more about how Staples transformed their collections and reduced bad debt by 20% with HighRadius.

Challenge #2 Global, but Disparate Collections Operations

Danone has A/R shared service centers globally, but they have a decentralized model for collections operations. With the A/R team spending most of their time in cash processing, dispute identification, and resolution, the collections process at Danone took a hit. 

Danone’s biggest challenge was the lack of visibility in the collections process, which prohibited them from focusing on value-added tasks like consistent dunning to high-risk accounts. The delay in collections affected their cash flow and working capital. Apart from this, the collections team’s inability to identify the right customer to approach to collect from hindered collector-customer relationships.

Challenge #3 Inability to Prioritize Accounts While Undergoing an Expansion

ShurTech Brands has a Credit and A/R team manually handling all A/R processes, including collections. 

The most prominent collections challenge that Shurtech had been facing was managing the increasing volume of receivables and the resultant chaos in collection efforts due to their acquisitions. 

As Shurtech continued to expand, their receivables volume went up significantly. Manual prioritization of collections worklists was not effective anymore. Collectors were making calls to customers who had already made the payment while high-priority accounts were getting neglected. It led to the loss of productivity and ultimately resulted in poor customer experience. 

Learn more about Shurtech’s transformation journey and the results that they achieved in this in-depth case study

Challenge #4 Inconsistent Collection Strategies

Ardent Mills has over 1,100 customers nationwide, and their A/R team would stretch thin trying to collect across the customer portfolio. 

The major challenge faced by the collections team was that they had no standardized strategy for worklist prioritization. They did not use any form of work list prioritization for segregating customers into different aging brackets. Limited follow-ups slowed down the entire operation. A lack of standardization was also present across business units, leading to stale processes.

Learn how HighRadius Integrated Receivables helped Ardent Mills overcome the challenges in Collections, Cash application, and Deductions departments in this in-depth case study.

Challenge #5 Inability to take Real-Time Action Due to Siloed Collections Operations

Ferrero has a massive volume of customers and operates from several business units. The A/R teams at Ferrero needed a high collaborative efficiency between the different A/R departments. 

With siloed systems, the collections team was failing to take real-time actions on the critical accounts. There was no flow of information between the different departments, and there was a lack of inter-team visibility regarding customer communication. The collections team had no information on accounts that reached their credit limit and hence did not prioritize them on their dunning list. There was no real-time update of when a customer’s payment was applied so that the collections team would waste their dunning efforts on such customers. 

Learn more about how integrated receivables helped Ferrero almost achieve a no-touch order to cash process along with the results in this in-depth case study.

Challenges #6 Low Visibility Into the Payment Status of Customers

Duracell faced constant delays due to excessive manual workload for the A/R teams. They wanted a way to free up their analysts. They also wanted to increase the entire process’s visibility and help their collectors target customers effectively.

The biggest collection challenge they faced was that there was low visibility into the payment status of customers. This lack of visibility led to confusion among the teams on whether a customer has made their payments or should they be sent a reminder? This hampered the overall customer experience. Additionally, Duracell could not add extra customer information into invoices, and pulling data from web portals was completely manual.

Challenge #7 Adapting to Changing Customer Behavior

The most significant collections challenge faced by L’Oreal was fluctuating consumer behavior, which flared up in 2020. The common strategies used to collect from customers failed—lack of visibility and difficulty accessing collections data impacted customer experience negatively. With the economic conditions still uncertain, this remains a challenge.

Challenge #8 Limited Control on Outsourced Collection Accounts

The financial services team at Keurig Dr. Pepper relied on 3rd party vendors, outsourcing their Collections and other A/R functions to control costs. This led to limitations such as restricted access and control. Moreover, outsourced contracts prevented shifting to other platforms or discontinuing services before the end of the contract period. A lack of metrics and statistics also made it challenging to track outsourced resource productivity, causing inconsistencies across processes and creating complications for the A/R team.

Challenge #9 No Dedicated Collections Department

Before their transformation journey, ABInBev had no collections team. Collections management was part of the customer service team, and all the receivables operations were carried out locally, leading to varied payment terms, payment methods, and different payment cultures. There was no process standardization across any of the business units. Centralizing the collections operation and other A/R operations indicated the need for a Shared Service Centre, which would require an extensive digital transformation initiative and global standardization.

Conclusion

If you are a consumer goods A/R leader, you would definitely resonate with one or more of these challenges. These collection challenges do not only affect the operational efficiency of A/R in your company, but they also hinder your cash flow and ultimately end up weakening your working capital. As an A/R leader, you must take your time to identify the challenges and act on them systematically before you miss the bus!

Digital transformation and automation is a one-stop solution to all of the above problems. Today, almost eight out of ten consumer product goods industries are exploring and looking towards A/R automation solutions to enhance and transform their collections operations. 

Are you looking to improve your collections process efficiency with automation? Click here to know more about HighRadius Collections Management Cloud and get started. 

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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.