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CPG’s A/R Departments Must Step-Up with Digital Transformation Expert Opinion From HighRadius

CFOs expectation from the A/R department

This is what Hana Biskova, Solutions Principal at HighRadius and a former Order to Cash practitioner, had to say about the role of digital transformation in a CPG company. Hana is a digital transformation expert with over seven years of experience managing order to cash for an enterprise consumer goods company in Europe.

In this blog, Hana shares her proven strategies with A/R leaders from the CPG industry to help them successfully execute a digital transformation implementation and achieve a best-in-class O2C function.

What would you say are the top expectations of the CFO from the A/R function and how can CPG A/R leaders deliver on those expectations in 2022?

[Hana]: Today, the CFO expects their A/R departments to be [more] proactive, data-driven, and tech-savvy. Order-to-cash leaders need to [develop] their capability as digital workers and leverage technologies such as AI to react better in [challenging] situations. They should also shift their focus from cash preservation to cash excellence, a long-term culture shift that would enable proactive liquidity and cash management across the organization

Shift towards a long-term cash excellence culture

But, most important of all, A/R leaders must prioritize employees and customer experience. [Capturing] the customer’s views and listening to them is the only strategy to grow in a competitive market like CPG.

Based on your experience, how would you say order-to-cash management in a CPG company is different from that in a non-CPG company?

[Hana]: From [my] experience, It’s not easy to fill orders correctly, especially when there are many promotions, new products, and a high volume of orders.

To resolve deductions effectively, organizations must have an integrated platform that helps them collaborate internally and resolve deductions faster. An automated system will not only reduce the workload on the deductions analysts, but it would also improve your customer’s experience.

Faster deductions resolution with a centralized system

What are your views on AI & machine learning technology? How fast do you think the enterprise A/R departments will adopt them?

 Make A/R familiar with an AI-powered system

[Hana]: >Many of the large enterprises have a long history and have grown organically over [the] years. Because of this, they already have large, robust systems in place, potentially making it harder for them to accept new solutions powered with AI and machine learning technologies. Digital transformation leaders need to educate A/R leaders and make them feel safe about working with systems powered by these technologies. Once they are comfortable with AI, the pace of digital transformation in the market will increase quickly.

How important is the collaboration between credit and sales departments? What are some of the ways to promote this partnership, and how can automation help in the same?

[Hana]: This ties back to the concept of cash excellence that I spoke about before and how it cannot be preached until internal teams are all in sync with each other. I have personally seen conflicts in the past where the sales department wants to sell while the credit department just wants to protect the company from risk.

Sales need data and the correct information when meeting with their clients, and credit teams could help them with the same. Accumulating this data without technology would be a very labour-intensive process, quite prone to error. The right technology can also show sales [the high-risk customers], allowing them to use their relationship and get a payment commitment without the collector having to call them every five minutes.

The right technology to deal with high-risk customers

This, for me, is the future of credit and sales collaboration – one where they are not working with each other but together to boost the company’s revenue.

Should A/R teams worry about customer experience? If yes, what are a few ways in which automation helps A/R leaders deliver a good customer experience?

[Hana]: Customer satisfaction should be an objective for not just A/R but all departments within an organization. By focusing on customer experience, A/R can make a direct contribution to the organization’s revenue.

Transition A/R into a strategic business function

In addition, automation eliminates manual tasks, allowing the A/R analysts to invest time and effort into running customer interviews and getting feedback on what is working vs. what is not working for them. Therefore, automation is instrumental in transitioning A/R to a strategic business contributor instead of a typical back-office function.

On a concluding note, what is the one piece of advice that you would like to share with practitioners in the consumer goods industry today?

[Hana]: Try to learn about pain points within your team from a human resources standpoint, how satisfied people are with their work, and what they would like to improve.

 Improved customer experience can reduce DSO

Improvements will help you retain your staff, reducing the time taken up in training new people. It will also support your customer satisfaction objectives since you won’t have to build new relationships every time. Happy employees will also help [your team] to grow further and improve the customer experience [while reducing your DSO].

Conclusion

For A/R leaders across the Consumer Goods industry, digital transformation is the way forward to elevate their teams in the CFO’s office, where they can create a working capital impact. Be it good end-customer experience, or higher revenue generation through collaboration with sales, A/R departments can achieve it all with the right technology.

The next right technology in question is artificial intelligence and machine learning, and their critical use cases and applications that can elevate your A/R functions with automation.


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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.