Achieving 95% Straight-Through Processing for 1 Million Payments with Integrated Receivables



Julie Weaver

Vice President, Treasury Services,
Caliber Collision


[0:00] Julie Weaver:

Welcome to the session 95% straight-through processing, we will detail today, Caliber’s journey through implementation of the HighRadius cash app module. I guess first of all, how many of you are currently using the cash app module? So how many are just prospects? Looking at the tool just learning? So probably the majority of you are in the latter group. And how many are implementing? We’ve got a lot, actually several, well good. And also another question, How many of you are cowboys tonight? And how many are aliens? Well, I’m going to be a cowboy. I’m from Texas. So Western wear was just sitting in my closet already, so pulled it out, and I’m good to go. So today for this session, we’re going to talk a little bit about Caliber collision and our cash app process before implementation. We’re going to then talk about key considerations, when we decided we needed some automation, the solution, the results, what Caliber looks like in 2020, and how the solution is there in place and the importance of human and machine collaboration. So first of all about Caliber Collision, we are America’s largest Collision Repair Company. Our purpose is restoring the rhythm of our customers’ lives and just to get a feel for the culture, we bring that to our teammates as well.

So every day we’re looking to restore lives, not just fix cars. We are in 32 states currently, and we have over 1100 shops, state of the art shops. So these are, we’ve invested in people and equipment, so we’ve got highly trained technicians. I’ll have ICAR training somewhere specialty training such as Mercedes, BMW, we have scanners in all of our shops. So we always scan, pre-scan and post-scan all of the cars that come in and really that is because of the technology that’s in cars these days. So the backup cams, the side view mirrors. We want to make sure that the cars when they’re repaired, are going to be safe and are repaired correctly. So I think the point of this slide is that Caliber is a big company. A lot of times, in fact, recently we had a contractor that we were interviewing on a phone, and they were really interested in what the environment was going to be like Caliber, because they had this envision in their mind that they were going to be in a body shop, sitting in the back office with some technicians, which is entirely not the case.

We’re a big company. We have a corporate headquarters of about 400 people, very talented and professional people. So what do our receivables look like before implementing HighRadius? We were processing a million payments annually and most of these payments were, we have two types of payments really their customer deductible payments. When you have an accident, you’re paying your deductible, or you’ve got insurance payments. So we were working with a lot of insurance companies, we had a lot of electronic payments coming in from those insurance companies. And that’s what we decided to automate where those ACH payments but with those ACH payments, there were different processes for each carrier. So one would require, would send the remittance in this format one would be a portal one would be an email remit, they were just all different, every single one different. We did not have an integration with our in-house accounting system, the ERP that we use for AR is automotive proprietary, it’s called CCC1, and that’s where the repair is planned and it’s also houses are AR we use for our financials, we use workday.

[4:15] Julie Weaver:

Our team, we had a relatively small team, we had five coordinators who basically were the processors of the payments. So they would be the ones that would go in, retrieve the remittance information, put it on a spreadsheet, was a very manual process. And then we would perform the Vlookups to our open AR, to pull back the information, then we would copy all of that on another spreadsheet and upload that into our ERP, and then we have three analysts, the analysts’ primary duty was to work those exceptions. So those items that there wasn’t a match, the coordinators couldn’t find a match for it, and in the automotive industry, it’s not unusual to have a lot of that, because some of the insurance companies pay based on the estimates, which means you get payment in advance, and the car may never come in or they may decide to go to a different shop. So we have a process for tracking those exceptions and refunding them back to the customer.

The analysts also work closely with accounting to reconcile the payments. And it’s not up here but one of their key duties is really customer service to the field. We use a ticketing system and the collections are done decentralized out in the field. So they always have receipt posting questions, as we call it, they pay this it’s not posted, can you research it for me those kinds of questions. So they do spend a lot of time doing that. So this was our cash application looked like before automation, so the insurance company would submit their payments by EFT, and of course, it would go to the bank and the bank would generate a BII2 file. Simultaneously a remittance would be sent either by email or through a portal. And then this is where the Caliber AR team would see all these manually doing this and that. They would manually pull the bank statements from the bank portal. We would manually download all of those remittances from all the different sources, we would manually aggregate all of that information on a spreadsheet, balance it to the bank, and then we would do our V lookup process to our open AR to pull back the claim number which is necessary to upload into our ERP. If there was a match, it would go to the ERP. If there wasn’t a match, we would manually put that on an exception spreadsheet. The major challenge with our process is that there was a manual reconciliation with our bank every day. So there was that balancing aspect.

The analysts were a log, this is probably the biggest one for us is that our analysts were logging into those insurance portals as many as 500 times a day. And that was when we had 500 shops now can you imagine with 1100 shops, so and this really speaks to the different ways the insurance companies are structured for some have where you would log in by state, you could log in by state, still 32 times a day to pull down your remittance information on the worst one, which we are alluding to here is the Geico process where you log in by shop. And we had three individuals, three coordinators that they spent the first one to two hours a day. Pulling, copy, paste, copy, paste back and forth with their user ID and password to pull all of that remittance information. Of course, then there was the manual aggregation of those remittances. So, for instance, those three people put them all together, make sure it balanced. If it doesn’t balance them, that’s another project. So a lot of time and productivity was lost with all of this manual processing, manually uploading and consolidating data into Excel spreadsheets. And additionally, there were significantly more posting errors. Some of the remittances on to the aggregated spreadsheet had to be keyed in with Key-in, there’s always the possibility for errors. And also with the V lookup formula to as you know, it will pull back the first one that it sees with that combination of numbers, and there may be more than one climb out there with the same set of numbers.

[9:04] Julie Weaver:

And then there was the error about adding to the exception report. So since that was a manual process, it was not uncommon for an applied climb to not be added to the exception report so we wouldn’t even look for it until and then accounting would find it the next month, and so when we decided, I actually learned about HighRadius at a conference, a treasury conference, and when I saw the demo of all of that logging in a bot could do that for you, I thought that would just be great for our situation. So we decided we would explore automation and our key considerations were, we wanted to automate our ACH payment processing. So we still have our checks and our credit cards outside of HighRadius with a different process and we wanted to automate our claims and remittance aggregation. We wanted to achieve a good hit-rate of at least 90% and thought that was possible. And we wanted the system to be able to integrate with our accounting system. We wanted to eliminate the manual rework for handling exceptions. So we implemented the HighRadius tool in late 2016-2017. We actually did it in two phases. We did a proof of concept phase, which we just implemented two of our insurance partners, which were the most painful, so we did Geico and Allstate in late 2016. And then we did the rest of our insurance companies in 2017. But now you can see the front end obviously is the same, the insurance company is sending the EFT payment, there’s a BII file, that BII file is going to HighRadius.

There’s a remittance, it’s either an email or a portal remittance, the same, but the email remittance is going to the HighRadius portal. It’s forwarded to the HighRadius portal. And then also there’s a bot that goes in and locks into all those portals and aggregates the information. So the HighRadius tool is aggregating all that information. It’s Math, we’re sending an open AR file. So there’s basically a three-way match going on, it’s matching the payment to the remittance, and then to the open AR. And so when our coordinators come in and pull up the HighRadius screen 90%, 90+% of the claims are already matched and ready to go. So what they’re doing now is working those that the machine couldn’t match, which in our case are usually there wasn’t a remittance, so then they have to go manually track down that remittance or call their contact or whatever way to get the information, or they didn’t find an AR match. And in that case, it’s like I said, it could very well be there isn’t one. Then the next thing that the tool does for us is, it formats our output into the output that’s needed for our ERP system upload. So we don’t currently have it integrated that something we do still want to look at but we download it and upload it and it’s already formatted, already done.

[12:47] Julie Weaver:

So the next slide is the email remittance and how it’s captured. So you can see that it’s the email is sent to our EFT receipts inbox and we have put a forwarding notification in our email so that it’s forwarded into HighRadius. And that is not a difficult thing. It’s something that you don’t even need to support to do that. It’s basically saying if an email comes from this person with this subject forward it to this other email address. And this is an example of one of our remittance looked like. This is a triple-like-climb. And it’s picking up the claim number of the claim name, the amount, the check number of the important information of the remittance. And this is what the HighRadius tool looks like. And all of that information is going into this received data tab, which is really great, especially for an audit because it’s the truth, it’s what we received. And as you’ll notice, this is our reference number, it ends inside 57564. Then we’ll go to the next slide, which will show this transformed data tab. So you put the rules around how your AR is, and in this example, the transformed data, it’s transformed that claim number to cut off the last digit because that’s how it’s showing in our AR so that it will find a match. And let’s see, what else can I talk about here, up there, you can view your original email by pushing the email attachment the download, so you can actually look at what it looks like it’s a repository for all of your information all in one place. This is an example of the remit information captured from a customer portal. So it’s coming in in a text file, but it’s capturing the relevant information, the check amount, the check number, the claim number.

[15:04] Julie Weaver:

And here again, we’ll look at the rules. So on this claim number, the last four digits are 1119, and when it was captured and transformed into the HighRadius tool, it’s 1119-01. So because in our AR, there can be an 0 one and 0 two and 0 three, depending on you might have the person that caused the accident and the other party in different shops. So you might have one or two. And so it’s captured all of that here in the transform data and this is what will end up being on your output for ERP upload. So where are we now? So we deployed full automation for ACH payments in 2017. In 2018 we opened our 600th location. And in 2019, we had a large merger with the Abra auto body. So we with that merger and just the growth, inherent growth that is the Caliber is doing, we more than doubled our size in that one year. And then our future vision for 2020, we’re private equity owned. So we’re still continuing to grow, we plan to add another 150 shots in 2020. So when we implemented HighRadius in 2017, we achieved a 95% hit rate. We were able to reduce our team by 25%. We actually didn’t reduce them we didn’t.

We basically saved two people with the process and that we reallocate them. As a growing company, we knew that we were going to need those resources and it just positioned us for that growth. So at the time, we saved 12 hours a day in our payment processing, and now that our sizes doubled, and we’re probably doing more like 3 million payments annually, I would venture to say that 12 hours is easily 24 hours that we’re saving with the tool. So what do you think the major contributor is for our successful AR metrics is 95% hit rate, which we established in 2017. And we continue to maintain in 2020. This is where the concept of machine plus human comes in because a lot of people implement an automation solution, and they think we’re automated, we’re done. We were out of it you know, we have a system that’s doing our work for us, but that’s definitely not true. And as we’ve talked about before, we talked about the coordinators having to go in and work those exceptions, so people are definitely needed to do that piece. What the machines have done is it improved our workflow for the coordinators, so they aren’t worrying about those that do have to manual that is already done. They’re just worried about the ones that actually do require research and human intervention. There is better management of the work when the coordinators are out so obviously people will be sick people will go on vacation and instead of now having 10 separate different processes that may not be cross-trained. You’ve got one hot one process now in the HighRadius tool.

[18:50] Audience:

Do you know how much is done by machine versus how much now because we haven’t had a human going to work the assumptions our own SAP system? So I’m just wondering how much of yours is actually done by the human race? And how much is done by you?

[19:15] Julie Weaver:

Well, ours? we are achieving about 90 something percent and then an extra 5% comes in with the human. So we end up working I mean, how many delete my team is here today, so I may refer to them on some of the details. So what are our exceptions kind of look like? And it really depends on what carrier you’re talking about. Some of them, I think we login then they’re all matched. Then others may have 10 or so that we may have to manually lookup.

[20:09] Julie Weaver:

But per exception how long I mean and it depends like in Archer mainly we don’t have remittance. So we’ve got to go track that down, we’ve got to pull that go to the portal, see if we can log in, pull it down, go to the email, see if we got the email just to cut miss somehow. So there’s research either no matter what system it’s in, and then the actual piece about transforming it into HighRadius. You go in, you find a match in your AR, you go in and you change that transformed claim number and then it’s matched. So the actual work in HighRadius is very small.

[21:01] Audience:


[21:06] Julie Weaver:

So and just finishing this slide a little bit, we also have better interdepartmental collaboration, for example, with accounting, because our exceptions are kept in the system, they’re much more accurate, we’ve got a tool where we can now have those housed-in systems. So we’re much more accurate with our exceptions and our reconciliation. And of course, it frees up the analyst time to focus on other value-added tasks instead of the copy, paste, manual, not fun work. So basically, the automation has made it easier for us at Caliber to support the growth and initiative of the company. So here’s the human part. So that was kind of how the machine makes it easier. Here’s the human part were to maintain the high hit rates that you experience when you implement, there is ongoing maintenance, so to say. And we basically recommend that you have a superuser, so someone in your company with you, who understands how HighRadius works and can help the coordinators if they run into any issues, they understand why something may have gotten posted where it got posted. They put in all the tickets, so they understand all of the ongoing issues that are going on. And they also are part of this CVM team, the HighRadius CVM team, which we have monthly meetings with them. And that’s where you’re just focusing on the tool and how’s it working for you and are your tickets all resolved? And what else can we recommend that the tool does for you, so a recommendation for enhancements? It just one other thing I do want to mention is that HighRadius is constantly enhancing its system. And they are putting out quarterly notes on what the changes are, and they also have webinars on what those changes are. And it’s really important to read those and watch those because we did learn from experience is not read those and not know what enhancements were out there. And there were several out there that really helped us after we found out about them. But you had to opt-in. It wasn’t just an automatic enhancement. Right.

[23:31] Julie Weaver:

That’s it, questions?

[23:33] Julie Weaver:


[23:46] Audience:

And I just have a question around customization because you talked about onboarding your customers and logging into all these various portals. So we were told we get by standard three portal logins, you must have had to set up dozens of Portal logins. Hmm. And how did that affect your ultimate costs associated with implementing? I don’t need specifics but like, double?

[24:13] Julie Weaver:

Well, I mean, as far as our HighRadius contract, it’s basically on the number of payments that it’s processed. So the login piece was not a factor for our contracts. And I may connect to the after that, I was told differently, but they couldn’t change from when he went live to now. Yes, I’m LA and also I just want to say something else about the logins. So as we said, each shop gets a login. So as we’re adding new logins for new shops that we’re opening, we actually do most of the work on our side. So we’re able to go in, our superuser goes in and adds the user ID and the password. And then we put a ticket into HighRadius and say it’s in there, please activate just log in. So maybe that also helps with that. So it takes a look. Now we share in some of the work some of the efforts.

[25:07] Audience:

And the second question I had was why did you choose to only do ACH payments? Is there a future vision for doing check payments? Are they not received in the same, in an applicable manner?

[25:17] Julie Weaver:

No, well, so our check payments, we don’t have a lockbox yet. We don’t have a lockbox, we receive two, two or three ways we receive checks. One is we received them at our locations at our shops, and then they’re scanning them in and entering the invoice number as they scan them. The other ways we get them at our corporate office, and it is currently a manual process, we are creating the spreadsheet, the dreaded spreadsheet and we are taking the information off of the check and putting it on spreadsheet for those processes. So we’re looking at if there is something that we could use for HighRadius that would help with the check process.

[26:07] Julie Weaver:

Okay, somebody has a microphone.

[26:18] Audience:

Do you have a way of looking at or do you maintain your rules for HighRadius?

[26:25] Julie Weaver:

We don’t maintain them. When we implemented the rules, we worked with the HighRadius consultants and set the rules up and they haven’t changed. Now I think we have had a change when to help us enhance our matching and we’ve worked with the HighRadius team to put those in place.

[26:46] Audience:

So HighRadius holds the rules, you don’t have your rules where you keep them on on your own, you maintain them so that you know they’re maintaining it correctly.

[26:59] Julie Weaver:

HighRadius went through a full understanding of our process and what kind of rules were needed to get the correct match. But we didn’t do any kind of maintenance for those rules. Now, if they change, you’re going to need to change the rules. But yeah, initially we didn’t.

[27:21] Audience:

So I have another question. Do you have like, deductions that your customers take away or just straight invoice payment?

[27:28] Julie Weaver:

Yeah, it’s pretty simple in that regard. We don’t have deductions.

[27:30] Audience:

Last few questions, please.

[ 27:36] Audience:

I think you mentioned that you saved about two people through this effort. I was curious without, you know, showing specific numbers. But what was the approximate ROI when you look at the cost for your management team and your systems team to invest in the implementation?

[27:54] Julie Weaver:

Well, it was more than breakeven, slightly more than breakeven. I would say when we looked at it, we felt like I said, now that we’ve grown, it positioned us for growth. So now that we’ve grown our ROI is more when we looked at it saved two people, the cost was, you know, a monthly fee for the system. It was a little more than breakeven, we felt.

[28:21] Audience:

Last question, please.

[28:27] Audience:

Okay, I just wanted to ask, so when you implement the product that your auto-match success was pretty high. What do you think to attribute it to that high success was a format of remittances or just very consistent formatting of what your customers send to your AR?

[28:44] Julie Weaver:

I well, and I do think it is because it’s the ACH payments and how ACH payments come in. And they do have a consistent format. It’s from the same limited group of customers. So we were able to put really specific rules around those remits, what they came in as and how they matched. So you may have a different experience with checks. Because you may, like in our case, we will have definitely more customers paying by check. So we implemented 10 insurance companies initially. Over the years, we’ve added a couple more. So I think we may have 12 now, but yeah, the information is just coming in consistently for those customers in the same way. So our rules are strong.

[29:39] Audience:

Thanks very much, really. Thanks for the session.

[0:00] Julie Weaver: Welcome to the session 95% straight-through processing, we will detail today, Caliber’s journey through implementation of the HighRadius cash app module. I guess first of all, how many of you are currently using the cash app module? So how many are just prospects? Looking at the tool just learning? So probably the majority of you are in the latter group. And how many are implementing? We’ve got a lot, actually several, well good. And also another question, How many of you are cowboys tonight? And how many are aliens? Well, I’m going to be a cowboy. I’m from Texas. So Western wear was just sitting in my closet already, so pulled it out, and I’m good to go. So today for this session, we’re going to talk a little bit about Caliber collision and our cash app process before implementation. We’re going to then talk about key considerations, when we decided we needed some automation, the solution, the results, what Caliber looks like in 2020, and how the solution is there in place and the importance of human and machine collaboration. So first of all about Caliber Collision, we are America’s largest Collision Repair Company. Our purpose…

What you'll learn

  • Learn how Caliber Collision saved 12 hrs per day in processing payments using IR
  • Learn how the elimination of transactional tasks, shifted A/R team’s focus on strategic goals
  • Learn about some of the cross-department benefits of cash application at Calliber Collision

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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.