Accountant to Customer Service Representative: 5 Things You Are Doing Wrong

Speakers

Lawrence Carroll

A/R Shared Services Manager,
Martin Marietta

Transcript

[0:00] Lawrence Carroll:

So let’s get started. I’ve done order to cash now for the last 10 years for Martin Marietta. And we started our shared service center about three years ago. So what we found is, in this presentation, so one of the questions I have is, how often do you have a conflict with one of your customers? if you have a conflict for one of your customers, it 90% of the time, it’s going to be something that we’ve done. It’s not normally the customer, at least in our industry. So what we’ve tried to do is identify the packets where the conflicts are starting to avoid deductions, avoid the slowness and payments. And just to make the customer onboarding process easier, and we’ve had some really good success with that, so some of the consequences of conflicts with your customers, again, our deductions, slow payments, slow onboarding customer complaints. We were on average, it would take us two days to onboard a customer. Payment terms weren’t set up correctly, sales-people weren’t properly assigned to the accounts. Sales Tax wasn’t set up correctly. So we were getting a lot of deductions, a lot of complaints. And we were actually starting to lose some customers just because it was easier to go to our competitor for that. So what we’ve done in the order to cash for us is we actually got some, we got sales involved upfront. So what we do now, is the sales-people will give us all their prospects. And upfront, we partner with sales, we say, hey, yes, special terms, are they going to be tax-exempt? And if they don’t know that information, they go ahead and go back to the customer to get all that information for us so that the setup at the very beginning is correct. That is resulted in a lot fewer deductions a lot fewer phone calls back and forth between us and the customer and sales. It has also helped the collections and the credit because now what we do is, in the setup, we use HighRadius actually for the credit application process. And so what we do in that platform is there’s a special box that we have set up. And in that box, it asks the five important questions that we need to process the customer all the way through to our ERP system. And one of the questions, is your tax-exempt? their payment terms? and these items come from the sales rep or the onboarding credit manager. Without the credit, the app cannot even make it into our system unless those 5 important questions, again, it’s the sales tax, who the primary sales rep is going to be, who their credit manager is going to be, what area and their overall pricing structure.

[3:18] Lawrence Carroll:

And what we’ve also done is have one point of contact. So I don’t know how many of you are using the credit module for HighRadius. But in that module, what it does is as soon as you set up the customer, it allows you to customize emails back out to the team. So one of the emails that we do is send out an email to the sales manager, sales rep, the credit and then the customer and that customer has a listing of all the contact people for that particular area. And on there as well. It’ll tell you if you have disputed for A, B, and C give them their lockbox information. So it’s one point of contact, that customer has everything they need. At that point, we also have a homegrown system called Iraq’s and that allows them to pay ACH. So in that, we automatically set them up, an account. And they can opt-in or out at that point, but their account is already set up. All they have to do is click a box that says yes, and they’re on their way and then reset their password.

[4:36] Lawrence Carroll:

So again, I’m a little ahead with some of the conflicts, consequences of the conflicts that we were having were late customer payments, the number one thing that we found, we onboarded the customer. We have varying payment terms from net 30 to net 60 and everything in between. When we weren’t partnering with sales, they would have special terms. By default, we set up everybody on net 30. And what we were finding was, Hey, I pay it at net 60 and it is very hard and at least in our ERP system to go back and change terms, we have to get various levels of approval. So, again, what we did upfront was to eliminate all of those, eliminate at least the payment term, and then the payment terms and any conflicts the customer might have that result around that. And again, as I alluded to, before, we were starting to lose business to competitors because it was taking us generally two days to onboard a customer. Now we can onboard a customer in less than an hour. So HighRadius is really helped with that. It takes literally 20 minutes to go through the application and it flows directly into our ERP, we’re using JD Edwards. So we have a custom program that reads from the credit app and puts all the pertinent information, into our database.

[6:12] Lawrence Carroll:

And then a lot of employee dissatisfaction we had, we were starting to get a lot of turnovers because all these angry customers were calling us. And so now with the teams that we’ve got set up and the way they’re set up, it has greatly helped us. Any questions before I move on?

[6:43] Audience:

Just a quick question about your onboarding process for your customers. Are you also running you know, bank references and credit checks within that hour time frame?

[6:51] Lawrence Carroll:

Yeah, so we don’t do bank references. For us, we’ve not had very good luck. But with references what happens for us is the system automatically calls out your references. And what we do as a follow up to that is there’s an automatic email that goes out to the reference but we also contact the customer at that same time and let them know that if you need an immediate account, please contact your references and we’ve had very good luck with that piece.

[7:27] Audience:

Have you integrated with Salesforce or some other CRM the upfront?

[7:33] Lawrence Carroll:

We do have salesforce.com and it is integrated with HighRadius both ways. And like I said, it’s been very successful, especially for the sales team.

[7:48] Audience:

And how what’s your kind of general range in your credit limits to make a decision in an hour that seems; our minimum is $5,000 or Max’s?

[7:58] Lawrence Carroll:

Yeah. So what we’ve done in our industry anyway, is 5000 is automatically approved. And then our credit analyst has 100 K, and then it just flows up from there, but our average is about $100,000 credit approval. Those do take a little bit longer, but the smaller ones are.

[8:21] Audience:

Okay. All right. Thank you.

[8:28] Lawrence Carroll:

So, I alluded to this again before but the major reasons leading the customer conflicts are poor communication with the customer. Poor communications throughout the organization. And then there’s no; we call it all talk no action. So sales will promise them the world to get them as a customer. And then normally what happens is, the credit rep has to be the bad guy. So now we’ve partnered with them upfront. So we know the prospects, we already knew, will pull us off a report on them, we already know if they should pursue them any further than that. So it tapers the customer expectation, and the sales, sales, and credit now or more aligned than we’ve ever been in it. For us, we have about 800 sales rep. So it makes for a very unique onboarding experience for the customers.

[9:35] Lawrence Carroll:

And that’s just what I’ve alluded to, I’m a slide behind. When do customer conflicts arise in the order to cash process so that you all are? Yeah, in our order to cash its customer setup. And then after the customer setup, it’s after their first purchase. Hey, we didn’t get a tax form right? Or you promised us pricing of A, and we’ve got B. So what we did, what we’ve done there is on their credit apps, we immediately ask for the tax-exempt form. It’s attached to the customer. If that tax-exempt form does not come through the customer set up as tax-exempt, an email goes to the sales rep saying can you please check with your customer to make sure where they do not? They are tax-exempt or excuse me a taxable. If we do not get a response it is then the den falls on sales to handle all the tax consequences and they don’t like cleaning up so.

[10:52] Lawrence Carroll:

But before we were not customer-centric and with this new process and the new way that we’re doing it is very customer-centric, the customers, the feedback that we’ve received is very positive from them. They like that their account is set up correctly in the beginning that they have all their point of contact, they have where they’re going to send their payment, they have a clear path to any disputes that come on. And for us, we went from; we sell rock, basically. So we went from about $6 million a year in deductions down to this last year, right under a million dollars. And a lot of it is the onboarding. And then HighRadius has helped. Do we have again, their credit onboarding? Software is very unique and is very customizable to your organization. So we’ve also partnered again, we’ve partnered with Sales and ask them upfront not to set unrealistic expectations with the customer because it just sets up the backend for fail. So if you can get your sales team to buy into this.

[12:18] Lawrence Carroll:

It makes for better cohesion in the company and better cohesion between credit and sales. And I don’t know in your organization, but that’s when I first started here, the sales hated credit and credit hated sales just because of that. And then, again, the customer has full transparency to everything that we’re doing. We have, with the credit process, we have multiple emails that come out of the system, so to let them know if there’s going to be a delay in approving their credit for any reason. And we have canned responses. So it’ll say hey, we still having problems getting your references if it’s a bigger credit limit as needed or that we there’s also a canned response that comes out and says, we need you to contact us. And so for us, it has produced less touches and less phone calls on the back end as well.

[13:23] Lawrence Carroll:

Any questions before I go on? Yes.

[13:33] Lawrence Carroll:

Yeah, so what happens is, you can, HighRadius has got about four or five features in their system that says, hey, you’re approved or we’ve got your application. But we’ve created; you can create your own templates. And then it’s very easy to have them automated send when you need them. So what we’ve done is we’ve got a bunch that comes out middle getting their customer number automatically gives them their credit limit automatically. Gives them their point of contact based on our system data. So it looks into our database once that customer setup pulls out the sales rep, pulls out the credit person, the collection person. And it puts it all into an email with their phone number and email addresses.

[14:24] Lawrence Carroll:

And there are just a couple of conflicts that we’ve seen arise from this. The first major thing was sales by in. It took six months for sales to see the benefit of partnering with credit. And credit was; I am a longtime credit guy. We’d had no love for them either. But we sat down and we showed them what we could do for them. They showed us their pain points and we met in the middle, and that really again has strengthened the relationship between sales and the credit team.

[15:10] Lawrence Carroll:

And in our department, I also handled billing, so a lot of the disputes will arise comes from billing, again tax, we have pricing. And so one of the major points that we’re trying to do now, we’ve got the tax on the control, but it’s the pricing each of our locations and we have 521 locations in the United States sets their own pricing. So we can have the customer we can put them on to A, B, and C and we know what your A, B, and C are for each location. But if the sales rep has given them, there’s a lead way in that tears and if the sales rep gives them something special, it really puts a great crip in our process.

[16:09] Lawrence Carroll:

One of the other things that we found was the customer. We’d onboard them, we’d give them; the sales rep would say, hey, they need $50,000. An hour average invoices 25,000 to 75,000. So 50,000 basically is two loads. So what we’ve done there is we; as soon as the customer is onboarded, and we’ve set up the credit limit, we call the account, we call the customer and say hey, just want to introduce ourselves. And we just want to make sure that you understand that your credit limit is fluid and if you need, if you feel that your credit limit is too low, please just contact us back and we can look at increasing your credit limit. We normally do one and a half times what we think they’re sales are going to be for the quarter as a credit limit as a rule. And then if we can increase their credit limit, we try to explain exactly why, you know, hey, we didn’t get the best references back or at this time you’re paying us; agree to pay 30 you’re paying a 60. So once we see an improvement in your payment trends, we will be glad to re-evaluate your credit.

[17:33] Lawrence Carroll:

Any questions?

[17:37] Lawrence Carroll:

And any additional tips have incentivized the customers if you can with discounts for early payments, what we’ve done is, if you will pay through our Iraq system, which converts the check to ACH immediately will give you a 1% discount. What that’s done is two-fold. It is reduced our billing cost by almost a half a million dollars a year because we outsource our invoicing or printing and mailing of invoices and it also has allowed the customer to choose their invoices from the system and that system feeds directly back into our JD Edwards and closes the invoices immediately. So we’ve had pretty good success there as well and we’ve just implemented their cash application system at HighRadius and we went from 61% and we’re currently at 81% automatic application of cash and I’m not sure in here but we get a lot of wires and ACHs and the customer doesn’t send the wire remit detail in the correct format for remains. And so what we’ve seen there is, we’ve given them access to our email box and they are able to actually take the wire remittances that we get from our customers and match it up to our wire payments and our wire payments where we were at 40%. We’re currently at 83% through. So it’s been a huge time-saving. And again, I alluded to we set up welcoming calls. And it might seem like it’s redundant, you might not have enough time, but that one call, for us at least has saved a lot of time at the backend. So again, for the collections department in our, we don’t have a separate collections department. So the credit person is the collector as well. But we have clearly defined our payment terms.

[19:59] Lawrence Carroll:

We have clearly defined where our customer sits, we’ve where we would have one model for all customers, we now prioritize our customers based on volume based on payment habits. So we have seen great success there as well. And we’re here looking for their collections module to see if we can get a better pass through with that as well. Precautions? Again, I would just tell you basically to do the welcome call, you might have as much success, hopefully, you’d have as much success as we have. Do your customer profiling upfront with sales. It will be very beneficial to you guys, wouldn’t have any well, the conflicts for us has been greatly reduced. And then we do payment trend analysis. I’m not sure how many of you guys do payment trend analysis, but what we’ve started to do is use and currently, it’s excel But due payment trends on our customers and we’re able to spot if the customers are starting to lead us out. And what it has done for us is the multiple due to due from back and forth, lack of documentation for deductions, all of that is handled up front.

[21:50] Lawrence Carroll:

Verify documents, we once the account is fully set up, we send them their full credit app back or HighRadius does so the customer has a copy of their credit app again, they already know where the payments going and all their point of contacts We’ve realized we had a $10 write off through this process and onboarding with HighRadius and just going through the chain, we realized that was a little too low for us. So we’ve increased it to $100. And even increasing it to 100. We only had $100,000 worth of write-offs, auto write-offs. And then we do track. If a customer finds out that we had that kind of $100 limit, and he keeps doing it. And then we have a phone call with the customer as well.

[22:53] Lawrence Carroll:

One of the other things that we found is we weren’t really doing address verification upfront we were basically relying on the customers credit app and in some cases, customer before where they would have in the hand right we get the wrong address or six looks like an aid to us or three looks like a five with HighRadius, they’ve eliminated a lot of that and there’s address verification built-in. So, it’s pretty good. The Dunning calls have dropped dramatically. And then if we spot through payment trend analysis that the customer is behind, we get sales involved immediately because they have the upfront relationship with the buyer or, you know, whoever is needing our product more so than the credit person.

[24:05] Lawrence Carroll:

And I don’t know how many of you guys deal with the government but the government for us as a pain they tend to take their normal tax deduction and then a separate tax deduction from us. So we’re trying to figure out ways to deal with that, but that we have noticed that tax and the government and then just as thought customer conflicts are an inevitable part of the business and will exist always. But what we found through this is you can turn some of those negatives into a positive and give the customer good onboarding experience. And then, basically, let’s address it. Let’s get the customer model, let’s say listen to them identify what it is, investigate and then follow through, that was where we lacked a lot was the follow-through we would get the customer complaint, credit rep get busy and the follow-through lack so then the internal and external communications we tend to over-communicate now so we know if the customer says they don’t have something we sort of know they’re lying to us and then create a win-win, give the customer an out if he can’t pay for some reason, or they’re deducting for some reason. Give them some solutions. Don’t just say hey, we’re cutting it off. Give them a couple of options. Depending on your organization. We can stretch out the payment terms a little bit for short term cash, you know if it’s just a short term Cash Flow. And then conflict versus feedback, just get their customer feedback. Take it seriously. And I think you would see is what we’ve seen is more satisfied customers.

[26:18] Lawrence Carroll:

And then just monitor your process and keep up with process improvement. And with that, oops. Are there any questions?

[26:31] Audience:

So on your payment data do you get? Do you get bank data directly fed into HighRadius? I guess you’re not using their collections module?

[26:42] Lawrence Carroll:

We are using their cash. So what they do is, we have to fold we have bank scanners at corporate.

[26:52] Audience:

What do you mean by a bank scanner?

[26:55] Lawrence Carroll:

It’s just basically a check scanner. Remote deposit? Yeah, yeah. RDC But we also have, we have a division. And each division has its own RDC. Okay, plus all our core have RDC. And then we have three banks. And all of that data is fed directly into one of our three lockboxes. And all that is then the image only is fed into HighRadius and through their scanning.

[27:27] Audience:

Okay, HighRadius can handle the check images? because we have lockbox one lockbox. And we have multiple remote deposit scanners in each of our branches. But the ACH and wire the success you’ve had is what I’m really interested in. That’s what I want to get all of our customers too. So the banks, your three banks send the data to HighRadius with the ACH data that they have, as well as the wire data.

[27:57] Lawrence Carroll:

So we have one consolidated bank for ACH and wire, we have three banks basically and each bank handles. We have one bank for all our credit card transactions, okay, and then two basic lockboxes and we just feed all our wires and ACH through one of the lockboxes. But if your customer we have a dedicated; it says accounts receivable at Martin Marietta and all our events go in there and then we forward that remit to HighRadius and they read the data line. And when that ACH comes in, they apply, I don’t know behind the scenes but they apply their logic. And we’ve got like I said, where we hated wires and ACH, we love them.

[28:47] Audience:

Wow.

[28:54] Audience:

Okay, I think we’re short on time. We’re good and we do have demos on the field so to answer all of those questions that you had, we do have technical experts and account executives down there that can actually walk you through a demo, and anything that you may need and want to look at and all five of our solutions, and they’re down there all day today.

[29:18] Audience:

Thank you very much, guys.

[0:00] Lawrence Carroll: So let’s get started. I’ve done order to cash now for the last 10 years for Martin Marietta. And we started our shared service center about three years ago. So what we found is, in this presentation, so one of the questions I have is, how often do you have a conflict with one of your customers? if you have a conflict for one of your customers, it 90% of the time, it’s going to be something that we’ve done. It’s not normally the customer, at least in our industry. So what we’ve tried to do is identify the packets where the conflicts are starting to avoid deductions, avoid the slowness and payments. And just to make the customer onboarding process easier, and we’ve had some really good success with that, so some of the consequences of conflicts with your customers, again, our deductions, slow payments, slow onboarding customer complaints. We were on average, it would take us two days to onboard a customer. Payment terms weren’t set up correctly, sales-people weren’t properly assigned to the accounts. Sales Tax wasn’t set up correctly. So we were getting a lot of deductions, a lot of complaints. And we…

What you'll learn

  • Establish proper workflows between credit and collections to improve customer service
  • Implement a customer-first training plan to offer standardized customer experience and reduce churn

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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.