Most humans crave the zeroes when it comes to figures and calories. Wouldn’t it be amazing if somehow you could achieve zero bad debts as easily as doing something with your eyes shut? In the B2B world, zero bad debts are surely a head-turner.
The cash flow in a company’s A/R directly depends on collection management. The faster the collections, the more positive impact on the bottom line. Optimizing deductions could further help in plugging leaks from the company’s working capital. Yaskawa, a manufacturing giant with sales of $510 Million and 1000 associates achieved a 4 day DSO reduction and hit a count of zero bad debts using O2C Automation.
Before automation stepped in to save the day, the O2C processes at Yaskawa faced the following difficulties that increased manual workload and negatively affected the bottom line:
1. Disconnected tools: Using decentralized systems for collections and deductions added to the hassles of uploading data multiple times using excel and spreadsheets. This led to redundancy and the absence of a single source of truth. Result? The team focused squarely on large accounts while a multitude of smaller accounts fell through the cracks.
2. Lower visibility: The diagnosis of a problem is the first step to its solution. Due to inefficient reporting, root cause analysis of disputes was a difficult task.
3. Difficulties in credit card payment: Highly manual and insecure credit card payment processing made the influx of cash slower as it was not integrated with the ERP system.
4. Insecure data: The storage of credit card information while collecting payments required expensive PCI-DSS compliance. The costs incurred made it difficult to adhere to the PCI-DSS requirements, as a result, it made data insecure.
Just like road rollers are used to level roads, Yaskawa said ‘yes’ to automation to smoothen all their challenges. By the onset of automation for collections and deductions, they achieved:
Nine times out of ten, the available-for-everyone-free-size clothes don’t fit anyone. So why would a single type of correspondence suit all customers? Automation enabled Yaskawa to have customizable correspondence templates & packages according to customer requirements and provided out of the box collections and dispute modules.
“ One of the best things was that you don’t need IT to create customizable packages, you can do it yourself.”
-Liz Chamorro | Senior Manager, Yaskawa
Automated correspondence that can be created at the click of a button, made it easier to execute proactive collections strategies, and reduce bad debt.
1. Reduction in manual workload: Automation brought about the transformation of Yaskawa’s collections as well as the deductions landscape. Some of the results obtained included:
2. Time and cost optimization: The use of cloud solutions for collections and deductions management not only helped in minimizing errors but also strategizing collections according to the risk category of customers. It resulted in:
“The game isn’t over till the clock says zero.”
A swift transformation from zero automation to zero bad debt was a key milestone for Yaskawa. Leveraging automation for the O2C cycle helped Yaskawa pedal faster to the ultimate goal of business growth.
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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.