Hello! Are you looking at expanding your company overseas? Do you face problems in your Collections and Cash Application? Well then, you came to the right place. With the example of the company, Bayer, this blog hopes to show you the problems you might face in this path and hopefully, how you may be able to tackle these issues.
This blog hopes to answer the following questions that many of you might have:-
Bayer is a Life Science company with more than a 150-year history in the areas of health and nutrition.
In this growing economy, with an increase in the population and the rise of health-care, it is crucial for people to have access to medicine and food supplies, no matter how remote their location.
Bayer strives to provide these services to the masses and helps make a healthier, more sustainable future, which is commendable as a feat in itself but not a task completed overnight. They’ve had many problems to face and tackle on the way to achieve this goal, and it hasn’t been easy.
# The main issues faced by companies such as Bayer revolve largely around Cash Application and Collections. This might sound daunting as a subject at first, but that’s not the case. Improving the Cash Application process and increasing efficiency indeed go a long way in helping companies achieve their targets effectively.
# One of the major issues faced by Bayer was due to the fact that they are located globally and have outsourced to Australia, Europe, and parts of America. This posed unique challenges as different countries have different policies regarding A/R which made it difficult for Collections to work smoothly. This was also due to the fact that some countries process payments faster than others, and some do not have the proper infrastructure to support the file formats required for faster, more efficient payments.
So, let’s get into the details of the problems Bayer faced, and how HighRadius helped them become more proficient in business.
Bayer faced issues in their Lock-box operations, the main cause being limited file length, the digital limitations of Lock-box like Lockbox status. These issues were solved using the HighRadius Cash Application solution which made it possible to have lesser limitations in file length and digits.
The company faced major issues in Collections as many of the payments received were given by customers in installments, which led to discrepancies in Collections, because the first payment was applied immediately, but the subsequent payments were not. This was solved by implementing a system that flagged payments that were incomplete, which in turn, helped analysts perform A/R processes effectively.
The company also faced issues as some customers made payments for all their subsidiaries at once, which posed an issue with analysts, as they had no idea about which payment corresponded to which account of the customer. This was solved using an “ALIAS” account which was used for those collective payments which were received.
They had difficulties in identifying customers automatically as they faced challenges in fully mapping identifiers such as MICR, customer hierarchies, alias, etc.
Automation provided the ease of linking the ongoing mapping of customer identifiers.
They also faced difficulties in recognizing the information that was provided with the remittance because lots of effort was required to transform it into usable data. They also faced issues in mapping customer reason codes to deductions codes. This was resolved by incorporating Automation into operations.
Through the incorporation of the HighRadius Cash Application and Collections Cloud Solution, Bayer was able to overcome the obstacles it faced and improved on the processes currently in place. Bayer also used phased implementation to tackle the issue of diverse work cultures while expanding as it helped them see what system worked best where.
Bayer also put in place a Project Team Composition including the Bayer GPO, the Bayer COE(Centre of Expertise), the Bayer Project Lead, and the HighRadius Project Team and Success Manager, all of whom worked in tandem with each other to make the expansion of the company smoother.
“If it’s like Tinder, then you have your perfect match which was HighRadius.” – Martin Doran, Process Manager for A/R
With the solution provided by HighRadius and along with their partnership, Bayer was able to successfully achieve its target of implementation in 12 countries!
Automate invoicing, collections, deduction, and credit risk management with our AI-powered AR suite and experience enhanced cash flow and lower DSO & bad debtTalk to our experts
HighRadius Cash Application Software enables the end-to-end automation of the cash application process that covers major benefits such as AI-enabled data capture for remittances, auto-linking of payments with open invoices, cost-cutting on lockbox fees and easy compatibility with any system due to its ERP-agnostic Saas infrastructure. Apart from the major benefits that it has, there are some key features which can not be missed out, some of them are Email Remittance capture, Discounts and Deductions Handling, Check Remittance Capture, Web Remittance Capture, Invoice Matching, and RDC & Mobile Payments.