Delivering Exceptional Customer Experience in Order-to-Cash Insights from Global A/R Practitioners

Customer experience is a rather underinvested area in the finance function. Though executives have steadily started realizing its significance and are emphasizing the teams to leverage it to improve the cash flow to tackle the turbulent economy’s impacts.

Demerits of not having a good CX

Customer experience (CX) has a ripple effect on a company’s financial health. If leveraged effectively, it holds the potential to contribute to remarkable revenue growth. But where does the accounts receivable (A/R) function come into this picture?

The A/R function, essentially a people-centric team, has to be one of the more significant teams that interact with the customers daily. In a survey conducted across 200+ A/R practitioners in Q4 2020, HighRadius found that credit teams spent 4x more time completing credit reviews of new customers, and collections teams followed up 35% more with customers than they did earlier, to curb the impact of the changing business dynamics.

This blog highlights the insights collected from the HighRadius 2020 survey and shares a few best practices for A/R leaders to drive good CX by optimizing their processes and leveraging technology. Let’s look at some areas which A/R teams can leverage to deliver a good customer experience (CX) –

Scope for improving customer experience in Order-to-Cash(O2C)

A/R Director at Adidas on CX

  • Delivering seamless invoicing and payment experience to customers globally: Building payment portals that support multiple payment formats and language requirements for a globally diverse customer base.
  • Eliminating silos by maintaining a single source of truth for the customers across all the internal teams: Having a transparent, 360-degree view of the customers will reduce the friction between the A/R teams and allow faster access to all the data about a particular account.
  • Creating targeted strategies based on the customer buckets: Prioritizing based on the defined customer segments will enable collections teams to create specific dunning strategies that help them provide a personalized service to the customers.
  • Resolving disputes and releasing blocked orders: Researching and performing the root cause analysis to reach the depth of the concerns of the customers and helping them resolve the matters sooner than later.

It’s only fair to state that A/R leaders need to maintain the balance of mitigating credit risk and lowering DSO on the one hand, and providing a great experience to the customers on the other. But it’s easier said than done.

Common hurdles A/R leaders need to tackle to achieve good CX

It goes without saying that A/R leaders face multiple obstacles, and they are tasked with finding ways to overcome each of the following mentioned challenges to safeguard the cash flow:

  • Inability to maintain the relationships with the customers due to O2C operational inefficiencies: With the pressure from the executive’s office to mitigate the evolving economic climate’s impact, some A/R leaders started stressing on the collection team’s potential to get paid and improve cash flow.

As a result, collections teams resorted to aggressive dunning practices. This led to customers being followed up multiple times for the same payments until their experience was affected.

  • Lack of access to the latest data to make informed credit and collections decisions: The need for the latest credit data by the credit teams almost quadrupled in 2020 compared to 2019. A/R teams working in silos with disintegrated systems, often across geographies, are unable to interact and share information in real-time. Credit-based decisions can become stale if the credit teams don’t have access to the latest data. 

So, if an existing customer requested a credit limit upgrade and the team doesn’t have the latest credit data related to that customer, and denies the request following the outdated data, the customer experience will be impacted.

89% increase in the need for the latest credit data

  • Inability to get all the stakeholders onboarded with the digital initiatives for the A/R: The new economy has exposed gaps across O2C operations, like the ones mentioned above. And this has made A/R leaders realize the need for implementing digital innovations.

Today, they are tasked with being the driver of change in their function to optimize their processes and eventually improve CX. But to get all the stakeholders aligned with the idea, A/R leaders need to work with the technology vendors to build a strong business case for such projects.

Former A/R VP at Employbridge on improving CX

Best practices to consider when implementing change management and transformational technology

Based on the insights collected from global A/R leaders, we have created a simplified CHANGE framework that will help practitioners effectively plan and drive a change management program, keeping the customer experience in mind.

Change Management framework for A/R leaders

  1. Checking for operational gaps across A/R function: Looking into the gaps exposed due to the changing economic climate and identifying the technology solution that helps fill those gaps and provides customer delight.
  2. Having a foolproof plan-of-action: Proactively working with the technology vendor to build a solid plan and building a business case that properly highlights the ROI of such an initiative.
  3. Aligning all the stakeholders with the plan: Understanding how the transformation would impact all the stakeholders including the customers and plan for the level of commitment and the level of alignment needed from the top-level executives to the analysts.
  4. Navigating the entire A/R transformation end-to-end: Becoming the driver of transformation and working with the vendors to ensure successful project execution.
  5. Getting the entire team upskilled: Ensuring that the A/R team that is supposed to benefit from the project actually adopts the tools provided to create informed decisions that lead to a good CX.
  6. Engaging in the post-implementation process: Continuing to assess the project’s performance long after the implementation has occurred to course-correct immediately and ensure that the initiative keeps on delivering value.

IDC on change management

Conclusion

The A/R function plays a critical role in delivering a good experience to the customers. A/R leaders have realized the potential of customer experience in improving cash flow and serving the CFO’s expectations from the team.

It’s high time that A/R teams develop a customer-centric mindset to provide exceptional customer delight and enable sales teams to continue doing profitable business with them. Visit the link below to learn how A/R leaders can imbibe this culture across their teams.

Developing a customer-centric mindset

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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.