Simplifying Dispute Management for Your Collectors to Resolve Disputes Faster

Introduction

In several small or medium-sized businesses, collectors handle both past-due recoveries and dispute management in order to cash. The dispute management process generally involves the collections analysts recording customer-initiated disputes and validating them to accelerate resolution.

But in large enterprises, while collections and deductions teams function separately, they often collaborate to ensure faster dispute resolution and past-due recovery.

Now, here’s the predicament: whether it’s a large enterprise or a small business — collectors aren’t equipped with the right tools or visibility to look into the disputes raised by their customers. Ultimately, this slows down collections recovery and dispute resolution. 

We’ll discuss this concern in depth and how you can improve your dispute management process in collections as a business function.

Dispute management in collections: An overview

Dispute management in collections is a formalized approach to recovering collections and resolving customer invoice disputes. With proper dispute management, collectors can accelerate dispute resolution and collect receivables on time. Besides, businesses can significantly reduce bad debts with an effective dispute management process.

Importance of dispute management in collections

At the core of any successful business is its approach to handling its customers’ complaints and discrepancies in invoices and billing documents. With effective dispute management, you can view, manage, and strategize disputes related to missing or late payments, credits, or incorrect and disputed invoices. Not only does it help recover past-dues on time, but also makes the communication and collections processes more transparent, allowing you to better interpret your business’ finance data, thus improving your cash flow.

Major roadblocks for dispute management in collections

The lack of real-time visibility or proper access to disputes hinders the process of dispute resolution in collections. Let’s look at some common problems collectors may face during dispute resolutions.

• It becomes extremely difficult for collectors to keep track of every dispute without a proper strategy for dispute resolution. Erratic dispute resolution strategies end up impacting past due recoveries, thus increasing bad debt.
• In many cases, collectors have to filter and search disputes for each customer manually. After drawing deductions from those disputes, the collectors then inspect and validate those deductions and transfer them to a deductions analyst. As you can tell, this is an exhausting and time-consuming process, as collectors have to manually perform these tasks for hundreds or thousands of customers, which further delays past-due recovery.
• Inconsistencies and lack of transparency in audit trails form yet another roadblock for dispute management in collections.
• Several dispute resolutions need the sales or warehouse teams to get involved. In most cases, these teams get limited access to perform particular tasks to ensure dispute resolution. This access is mostly provided manually via email, and there is no organized way for the accounts receivables team to track or monitor the access provided to sales/warehouse teams. And in cases where businesses use paper documentation, the whole process can be taxing and become a considerable auditing concern at the end of the quarter.

In the following sections, we’ll explore how the collections team can get a convenient, central view across all the disputes with AI-based Collections Software.

AI-powered dispute management in collections 

With HighRadius’ AI-based Collections Software, collectors can quickly create invoice-level disputes and initiate automated workflows to resolve them faster. With Automated Dispute Management in Collections, the software validates disputes in collections, allowing simple disputes to be resolved without a lengthy resolution process.

Based on the nature of your business and its requirements, the Disputes Tab in the software can be customized, for which sales or warehouse teams can still gain selective access, and the collections team can monitor the permissions seamlessly. Besides, you can also allow other occasional users to access the disputes and take necessary actions for faster dispute resolution.

Moreover, AI-based customer segmentation helps collectors quickly identify high-risk customers and predict payment timelines with collection tracking. Receivables recovery can be further accelerated through customized dunning strategies with AI-recommended actions. The software enables collectors to create invoice-level disputes and initiate automated workflows for faster dispute resolution. The collections software lets collectors validate the dispute within collections so that simple disputes are closed without a long resolution process. Now, the remaining deductions can be assigned to deductions analysts for a faster and strategic deductions resolution.

How the Dispute Tab Works: A 3-Step Approach for Your Collections Analyst

AI-powered collections software offers a centralized view to manage disputes, which simplifies dispute management. Here’s how a collections analyst can use AI for dispute resolution in collections:

• View the updated list of open disputes: The collection analysts can begin their day by checking out the updated list of open disputes. Collectors can also view the aggregate of open dispute amounts.
• Easily filter and prioritize specific disputes to resolve: From the tab, collectors can seamlessly filter out the disputes based on customer name, invoice number, reason code, date of the dispute raised, the disputed amount, and a lot more.
• Manage and resolve disputes or perform bulk actions: Using the Disputes Tab, collectors can communicate, route disputes to relevant collectors or deductions teams, manage dispute status, or add notes and attachments. While collectors can optimize individual disputes, they can also perform actions in bulk, such as changing the dispute statuses or sending correspondences to various stakeholders.

Managing disputes with the power of autonomous receivables 

Faster and efficient dispute resolution is possible when collections and deductions teams collaborate and work in tandem, leading to quicker validation of certain disputes. HighRadius’ Autonomous Finance Platform empowers your collectors to route deductions to deductions analysts. With this, all the information you need seamlessly flows from AI-based Collections Software to AI-based Deductions Software.

While it’s evident that you can simplify dispute management in order to cash (O2C) with AI in collections, there’s always room for improvement. O2C teams have to upgrade and constantly improve their processes to ensure success. And you can achieve this only with a transparent and proactive approach.