Cortney Herington, former Controller at an enterprise consumer goods company and current digital transformation enthusiast, shared her experiences of managing A/R in a complex environment in a detailed interview with HighRadius. In conversation with her, we deep-dived into essential focus areas for CPG companies, such as customer experience, deductions management, and the action plan to drive digital transformation for continued success in 2021.
Read the detailed interview for more information and best practices that she shared.
Cortney: If I had to give my former self one piece of advice about automating our A/R, I would say: Do it NOW! Every day that goes by with manual processes accounts for lost opportunity and money. The A/R department is not a back-office function anymore. Today, we are in a unique position, being the ones bringing in cash and holding customers to the agreed-upon contract and payment terms. We must do the best job that we can, and automation is key to that.
I knew just one thing would be really hard. So the other thing I will say is I wish I had considered external vendors when planning my A/R automation project. In large organizations, we had lots of brilliant IT resources that were more than willing to build a solution internally. My team and I spent 100s of hours working with them to develop a stop-gap to the problems we had and to put in automation for the order to cash processes. Only to discover, companies like HighRadius have perfected this problem — and the solution was so far beyond anything that we were trying to do. HighRadius has completed 1000+ successful A/R digital transformation projects. As a finance person, you need to identify such leading solution providers and allow them to take care of these processes so that you can focus on things that are proprietary to your business. You must know that the world of finance technology can get overwhelming at times, but you don’t have to decide everything on your own. Resources such as the Gartner Cost Optimization Framework help make the right decisions that enable your organization to thrive, despite economic turbulence.
Cortney: Yes. Everybody deserves a fantastic customer experience. A business is not just a business. It involves people, and that makes it personal. Especially in the current remote world, where many of us struggle with isolation, the last thing someone wants is to get on a phone conversation with someone who is not warm and compassionate. In A/R, the time to build trusting relationships is now. A/R leaders need to understand that we can’t continue to do things the same way and hope for a different outcome. Focusing on customer expectations and satisfaction drive the ability to develop lasting relationships, which allows for insight when the customers’ needs are changing.
In my last role, we identified that the collections team was having trouble due to cash not being applied in time. The reason for that was because no one considered cash application challenges as the company expanded. With simple cash application automation, we solved both these departments’ problems and the deductions team, which was now resolving actual disputes and not misapplications. Our data was in a better place, and our collectors felt more confident on customer calls. Customers, too, started reacting positively to our outreach. The A/R executives enabled their teams to take pride in their job and be happy with their work. The moral of the story is that the first step in the right direction had positive downstream benefits.
Cortney: When working in my previous organization, which was also in the consumer goods space, I felt that our most significant challenge was not applying cash correctly. But after researching further, I realized we also had problems with deductions and collections.
We had a lot of customers taking unauthorized deductions. As a typical CPG company operating with low margins and in a highly complex business environment, we had thousands of customers, large and small. The broad scope of our A/R process put a lot of pressure on our collectors. In addition to this, they had to work with multiple partners in multiple systems and hold customers to their agreed-upon terms.
To solve such challenges, the first line of defense for the A/R executive is awareness. We can’t solve a problem we can’t define. Next is ensuring that the team has access to the correct data to make critical decisions. Another crucial factor is having a single system that can collect and organize all related information for the A/R department. I can’t stress enough how much time goes to waste every day for A/R teams to sift thru emails, log into portals – where no two are alike, document repositories, ERP systems, etc. So I again reiterate, executives need to start (today!) by identifying gaps in their current processes and then devising a plan of action for continuous improvement and automation to fill those gaps.
Cortney: Well, putting everything in one single reason is a little tricky, so there are a few that I would like to highlight. The first is access to decision-ready data. A/R functional leaders are often quite intuitive when it comes to identifying future challenges. And they’re great at highlighting their concerns to executive leadership. However, most of the time, they do not have the required data to back their intuition. Automation, machine learning, and AI provide the data behind the decisions, and if you do it right, it’s all available to you in a single platform. It’s also readily available for the team, allowing them to make more accurate predictions.
Automation is beneficial in an environment where market conditions are changing by the minute. For example, in some organizations, COVID required them to pivot and sell to a new customer and even into new markets. Using automation, the credit department can gain real-time access to this new potential customer’s data, assess it in real-time, and not lose the opportunity to enter a new market. It also allows us to keep tabs on any customers who may have changed risk profiles. An end-to-end integrated system provides visibility into cash flow, allowing the finance department to forecast the long-term impact of the crisis on the organization, and communicate the same to other business functions. These tools, automation, machine learning, and AI, will better enable leaders to build an agile A/R function that is prepared to handle sudden changes like the ones we experienced at the onset of the pandemic in 2020.
Cortney: While some of us might have been lucky the first time and were able to survive with the pandemic, despite existing process gaps, I don’t think we will be lucky next time. We need to future-proof our business, and digital transformation is a necessity to drive that initiative. Today, you either accelerate digitally, or you risk the survival of your organization.
But please remember, when it comes to digital transformation, make sure that you have realistic expectations from technology. Work with the right partners to achieve desired results. Most importantly, remember that you are critical to your business. No area of the business can operate with cash. Your customers, too, are of utmost importance. Keep them at the center of your plan in the transformation journey. Lastly, in the words of Winston Churchill, “Never let a good crisis go to waste.”
Cortney Herington is a finance and accounting veteran with 20+ years of experience, and a former HighRadius customer, who recently made a career jump and became a digital transformation leader at HighRadius. In her own words, she joined HighRadius to leverage her experience and finance background in helping others gain total value of their investment in A/R technology. You can connect with her here.
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.