“We strongly believe that the future of finance will be extensively influenced by an ideal combination of digital and domain. So the coming together of leaders in AR software as a service in the AR domain space is inevitable and destined.” Sajeesh Kumar, Invoice to Cash Global Enterprise Head – Genpact.”
Finance leaders and GPOs are now looking for ways to convert their AR function into a strategic and customer-oriented one. More than cost savings and efficiency, they are trying to focus on outcomes through data-driven actions and value-based offerings. Cash and customers have emerged to be the two critical areas in recent times. GPOs can improve on these areas and build a successful invoice to cash process through,
“The biggest challenge that most enterprises have had is to spend millions of dollars on tech interventions with no assurance of whether the tech would work at all. And there’s zero business context associated with that purchasing decision.” – Sajeesh Kumar, Invoice to Cash Global Enterprise Head – Genpact.”
The opportunities for invoice to cash are immense, but many organizations are still struggling to capitalize on these. They are spending their efforts and money on transformation projects but not getting the desired impact on their overall business goals. 80% of the invoice to cash team’s time is spent gathering data and reducing the transactional backlog, leaving just 20% to drive insights, value, and decision-making to accelerate cash flow.
While finance leaders and GPOs are investing in the right technology and talent, it is also important not to lose sight of the end business goal in the maze of transformation. Organizations need to remain agile and think beyond the existing mandates of the AR portfolio or AR-specific metrics alone. And this is where having a balanced approach for measuring efficiency and effectiveness is crucial.
“Order-to-cash leaders should look at the invoice-to-cash process with two different dimensions when it comes to measurement. One is efficiency, and the other is effectiveness. Most of the time, operation leaders focus more either on efficiency and cost optimization or on effectiveness, but not necessarily both. But, these two metrics taken together is key for measuring the success of future invoice-to-Cash projects.”- Sonali Nanda, Vice President, Product – HighRadius.”
Keeping this in mind, the experts at Genpact and HighRadius partnered to form the STAR (Straight Through Accounts Receivables) framework.
The STAR framework was developed with the intent to build an ideal AR function for the clients. The framework balances efficiency and effectiveness in equal measure. It embeds automation, AI & analytics across process, policy, and digitization while keeping business insights and values outcomes as primary objectives.
The STAR framework allows organizations to:
Assessment of AR function needs a plethora of metrics, which is challenging during benchmarking. The PIE2 (Perfect Invoice Efficiency and Effectiveness) index aims to simplify this process by being a single metric to measure all. It allows for target setting and benchmarking to reduce the cost of operation and enhance business value.
Here’s how the PIE2 indexing works,
Adoption of the STAR framework with PIE2 indexing can bring tangible benefits to your organization in terms of boosting cash flow, delivering value-based outcomes, and improving customer experience.
Genpact and HighRadius bring together domain expertise and digital sophistication to enable the STAR framework for the invoice to cash processes.
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.