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The E-shift in Deductions Management

Highradius

Speakers

Roger Anderson

Principal Optimize Consulting, LLC

Transcript

[0:11] Roger Anderson:

Alright so let’s start off. You know about me, I’ve spent 13 years in the deduction management space. I’ve actually been a HighRadius user, and a consultant now for the last eight years. So I actually was in your role before. We were actually using the system, day to day basis. So I’ve been through multiple iterations of this e-shift, with a couple of teams and there are three or four teams now. So it’s been a challenge. In addition to today’s kickoff speech was digital transformation, and that very bottom section that we talked about the A/R analyst, that’s going to be key and the seduction for this e-shift, because from my past experience, when people heard about the artificial intelligence, my team freaked out and said, “Okay, you’re replacing my job.” So that’s going to be a key in this whole e-shift. You’re going to get that question all the time, “Will my job be eliminated?” My kickback to them was, “No it’s not going to be eliminated but we can maybe shift your focus to different spots.” So hopefully at the end of this presentation, you have a better idea of what the e-shift will do for you and what it could be doing for you.

[1:09] Roger Anderson:

So right now, how many people actually use HighRadius deduction management? Anybody? How long have you been there? A couple of years?

[1:20] Roger Anderson:

Alright, so hopefully I can give you a little more insight into it. As she said I was kind of in the HighRadius industry, so I kind of delved deep into the system. Probably more than I should have – but I did it. So today’s agenda, we’re going to talk about the current trend, the shift, and then the automated deductions management. So, the current trend in deductions, as we can tell, I think everybody’s seen a big uptick in deductions. In the consumer products area, a lot of fees and fines have been kicked in, especially in post audits, and more post audits are coming in. So we got third parties coming into your companies or customers saying “Hey, I think we can find a couple of more pennies.” Then they dig in deep and they’ll find it and they’ll run with it.

[2:12] Roger Anderson:

Not SOX compliance and of course, multiple touch points that you have your sales team, you have your A/R team, you have your deductions team, you have your management, your executives. You have a lot of people that you have to answer to and maybe you want to know more answers. So we have the deduction process where you get your customer claim then your search for the backup and you have the invoice to support it. You identify what kind of deduction it is. Do your research. You may have to reach out to sales or some other people to get some more information on what the deduction is for. And you’re able to resolve it or you’re doing further research to resolve it. So three touchpoints are the data, people, and collaboration.

[3:01] Roger Anderson:

So in the data space, we have to receive that claim backup or get that customer claim. So I don’t know how many people use the claims and pod automation from HighRadius?
Has it been beneficial for you so far?

[3:10] Audience Speaker:

We haven’t had it that long.

[3:20] Roger Anderson:

Okay. So everybody does know that the claims and POD automation– what it does is for some of your bigger customers is that it actually sends you your backup ahead of time. They’ll take the information. Try to read some information off the backup. Put it into a format that can be in the UI, and actually download the document for you too so that deduction does post. You already have your claim back up to go with it so it saves some time on the analyst’s job. Your sales team will not have to collect all that back up for you. You turn on your access to certain customer portals and you can actually pull the deal sheets to go with it, or other supporting information. It all depends on what the customer has to offer. So the customer claims are pretty big if you’re able to use it. Bigger the customer, the easier it is. Smaller customers can still do it because they still do email options for you. Of course, a lot of it depends on how good a quality they send to you, but it’s a little bit of a challenge. How many people still do with paper?

[4:16] Roger Anderson:

So this would be a big change for people with paper, especially in the whole process. Paper is probably going to be the big key in this whole process. People in the process — they have to do all the research, the validation, do some more additional backup plans, find more information, talk to sales, reach out to management, do what they need to do to figure out what they’re going to do with that deduction, or figure out the type of deduction. And of course, collaboration with your sales and external users is one big challenge. Data in the process — how often does your analyst deal with missing backup?

[5:00] Roger Anderson:

May I ask what drives that? So, that’s what I’m here for : It is still a struggle with people to get that information to support what that customer is doing. So data in the process is – starting with customer claim data, any kind of data you can get any information, any backup, any challenges against that backup, proof of deliveries, bill of ladings, tracking information. Pretty much anything you can think of that has to be related to what created that deduction and to what the customer did with that deduction. Probably if it is still paper-intensive, it’s high printing cost. For one of the companies I worked for previously, we did the implementation of deductions management and kinds of POD automation. Like we calculated and I think we were printing about seven hundred thousand pieces of paper a year, we went to 50,000 pieces of paper per year, just by doing that kind of POD automation and the deductions management tool. I think we calculated that 60 or 70 trees were saved for that just one shift. So that alone will help justify what we did, this and that. Of course, we had a high probability of errors and inaccuracies. That’s a big challenge.

[6:37] Roger Anderson:

It is still difficult to get 1000 pieces of information and still have to deal with all the resources. You have to keep the information for up to five years or longer, depending on what your industry is. It’s a matter of retaining that information, all that data in a spot that you can get to it easily and manage it. Be able for yourselves and everybody else that has touched the deduction to be able to get to it themselves instead of having to copy printed email and send it out, which needs them to actually validate themselves. It’s another whole process to get it from one-year resources now and hand it out to these people. And of course with anything when they’re internal you have IT costs because with more backup you get electronic, the more server space you’re going to have to use or more memory space and get more capacity in your own internal servers. That’s where HighRadius can step in because they’re paying for that server space. It’s called the site on the cloud. So you already don’t have to cover that in your IT budget.

[7:43] Roger Anderson:

So the role of this technology is being able to go out and pull the back up, get it for you to store it and keep it. Saving the processing costs, easy access to the data. As long as you’re with HighRadius whoever has access to your HighRadius modules. Research ready they’re all ready to go, so for example, when you get that claim as a pre-deduction, you could have it up to 60 days to three days in advance of the deduction. Second is your team time to actually look at it and say if it is valid or invalid. They’re ready to be resolved so if you already know what’s going to be trading later, you can have your resolution apply against it as soon as that deduction hits that day. You can have a clear-off that day. So your DDO can go swiftly down if you take advantage of all your customer’s portals and all their information.

[8:34] Roger Anderson:

So the big driver in all those e-shifts is people, of course. They’re the ones going to bridge that gap between the data and the resolution. And of course, they’re probably gonna be the ones most concerned with the e-shift. So how many people are in most of your teams? What’s the average?

[8:40] Audience Speaker:

Four.

[8:44] Audience Speaker:

Fifteen plus.

[8:50] Audience Speaker:

Eight.

[9:09] Roger Anderson:

My team was 14. That was all the deductions for the whole company. Plus we didn’t do any of the cash app, any of the collections. It was all just deductions focused. So of course, people in the process. You have to have a handful of full-time employees who may have a few part-time to kind of bridge that gap. We have to multipurpose and I’m sure some groups or some people might do the collections, the cash app, the deductions management, the resolution. Some might touch the whole process, potentially. And the limited deduction types– primarily the big one in deductions is trade. That’s probably one of your biggest budgets. It’s all manual and time-consuming. So the goal should be just to try to get that manual time-consuming piece, eliminated or reduced. And if you’re one of those companies that are trying to bring in other companies into your corporate umbrella, you get a higher count deduction so you have to hire more people. So as you get larger, more the workload. More burden on your people to get the work done. More deadlines to keep up to date with. Try to keep everybody happy, try to keep yourselves happy and get your inquiries from your brokers, your sales and “Hey, was this deduction?” “Yes.” And they don’t know. So basically it’s trying to keep everybody on task and at the end of the day, you don’t have a high DDO. And you’re resolving your deductions to the wrong GL — not trade or trade. You don’t get it applied correctly.

[11:04] Roger Anderson:

On the day there is a lot of valid invalid process. But the goal here is to help your analysts decide to take the time to work on it or kind of quickly get rid of it. That’s ultimately the goal. If you have one of those people that have to cover multiple departments and it can be shifted to another group, or if you have a high count of invalid and shifting resources to work on your invalid recovery can help bring some cash back to your bottom line. Or do we do this or not, right off your trade spend.

[11:46] Roger Anderson:

The big thing with the key shift is collaboration. Probably right now, a lot of it’s either pick up the phone, call, email and not only do you smell a bell but it still happens. Communication gaps where the phone call doesn’t work, email gets lost. You lose track. Okay, tonight you’ve sent an email like three months ago. I thought I had information already, where to go, what can I do with it. Had to contact your people again, your sales team or your broker and say hey, can you send it to me again and they get frustrated. You, people, get upset with each other because they observe the charges three months ago. A lot of touchpoints, and depending on what some of your roles are. One of the companies I work for, we did the whole process from start to finish, since the deduction hit we did the resolution. Our sales were only involved when we needed more information. So we didn’t push out the trade to a different group and non-trade to a different group. We handled the whole process, no matter what type it was. Of course, you got more eyes on the deduction because of the high count. So you have more stakeholders in the process. You’d have more focus on your customer experience. You start losing track of those records, or where they go.

[13:05] Roger Anderson:

Less visibility to the whole process. Like for example, their day deduction works on it. What it does is to put it onto a pile of paper, or put into a spreadsheet or manage them on a spreadsheet. They send out to sell sick Academy for more information. They forget to write it down in a spreadsheet or wherever they manage it. They don’t know what day they sent it out so they have to go through their email to find it. They have to think back, ok did I send it this day where do I send it, their management comes to say hey what do you do today or what you do this month, really no good way to track or see what’s going on for that person.

[13:42] Roger Anderson:

You don’t know how many times you’re contacting your sales team, maybe you have a customer that has a lot of deductions but you always have to involve your salesperson because there’s always challenges either pricing or they’re all the information ready for the trade piece of it, missing information like deal sheets or how they communicate to the customer their pricing. So it helps with that external collaboration too.

[14:07] Roger Anderson:

So the big advantage of the E-shift is able to resolve deduction more quickly if everything falls into place. Not seeing issues can solve your world’s problems here but at least reduce a lot of your problems, a lot of challenges and open up more of those bottlenecks. Push up your internal collaboration with your management, your internal sales team. How many people deal with broker networks, the broker teams out there. Have you seen a bigger challenge? Your brokers or with your internal sales or both, both kind of challenging.

[14:46] Roger Anderson:

Lisa, you’re telling us a little more control which can or can’t do them with your brokers you’re kind of under what’s the contract say what can we do, what can we do against the broker for something Bella can be deducted from their commissions, so you know our challenge when you’re dealing with external versus your internal course, anytime you deal with sales or brokers deduction. Their primary focus is to go out there and sell your product, they don’t want to deal with this deduction they don’t want to deal with your team. But he called me. Can you figure it out?

[15:15] Roger Anderson:

You’re bugging me too much and all that fun stuff. I’m trying to sell bigamy, you come back here, you’re gonna say no I can’t resolve this deduction is going to give me information help solve it or what you tell customer Hey, why don’t know, here’s an email you figure it out. So, this will help can help with management and also for the answer. I didn’t do my job at myself personally my brother keeps giving me. He’s giving me flak for kids coming back and we say that’s, that’s not their issue.

[15:47] Roger Anderson:

So I hope by it with the E-shift that you any more efficient the whole process for everybody and a little bit more confident with everybody’s doing. One thing from my past experience when I heard HighRadius, when I was end-user always told people in there to not put anything into you don’t want people to remember, or don’t swear to say bail don’t call anybody out.

[16:08] Roger Anderson:

Don’t make any comments and because that record that information is stored permanently in HighRadius. You don’t want to come back and haunt you. So we always tell people do not to get upset with a person do not display that in that note in HighRadius, because that could be used by management, or just comes off to the person to that.

[16:25] Roger Anderson:

I don’t want to deal with this person or even through HighRadius or to any email they kind of just want to blow it off course here’s where the big thing comes in the technology that HighRadius, whatever else you’re using. How many people are using a kind of electronic Deduction Management right now? Besides, outside of HighRadius is everybody in some kind of formal training process.I’m assuming a lot of SAP users here. Its common theme I hear here is SAP is the big dog. So also what technology is.

[17:11] Roger Anderson:

It helps with that collaboration like I said, so at HighRadius, these with their, you get the deduction, you have your pre-deductions you have your claim, and then match it up with the deduction polls, your answers are key still can’t figure it all just don’t have enough information. What you can do then is they can send it, send it by email, they can send us, they can change the process or net record. Send to wherever they need to that’s a HighRadius user within your system, put a note, the user can see that come up on their worklist. See that note. They can respond back to HighRadius and various other nodes or add more additional information to add additional backup. So as you’re working on it, you can see okay. I sent this on this day, they reply back in this day they sent the attachment to the information that they could use for this. They were able to give me more information or you can go back and forth on it.

[18:01] Roger Anderson:

Also with the technology. You can see how long it’s been sitting with somebody. If you’re not just having your deduction day outstanding, you actually have a couple of market conditions that HighRadius offers that day since words, which are giving me an idea. Okay, the last touch of the day. But the day, since the work spent, is 25 days. So why haven’t we touched it for 25 days sets the Toyota process rotated in touch it with the pre-deduction process the client’s piece you get advanced with the chemo two days I’ll stand seen so okay got this pre deduction 60 days ago that deduction today is calculated six days into that calculation so you see I actually had this first six months versus four months.

[18:43] Roger Anderson:

with the victim, their pre deduction house was your post audits. He gives you an advantage with most with I believe is 30 or 60 days depending on the auditor, but you can start working it can make an invalid start going back and forth as your post-audit, contact either pierogi extra one of the other Post audits companies say this is invalid support it, tell them why you think it’s invalid. In Canada, you can keep track of what you’re doing with that company, and how you’re trying to make it invalid or all your follow-ups can keep adding notes. Then when you can see it when you do prevent it from hitting your pre-deduction. Actually, labeled as a prevented post on it. You can start tracking those to say okay, all these invalid pre-deductions are we actually saving money for the county because we’re actually able to stop before it ever hits sir deduction balances.

[19:40] Roger Anderson:

Any questions. Did I go too quickly?

[19:48] Speaker:

Does anyone have any experience working with vendor management and stuff and having to go out to those different portals to extract information to try to figure out where there would be a deduction or a difference.

[19:59] Roger Anderson:

So, at exact portal vendor management.

[20:04] Speaker:

Yeah. So with our company, we have 50 plus, different contracts. So each of the contract relationships we have, there are different terms. So there could be a variety of reasons as to why the client ends up deducting for short pain, etc. So I just didn’t know if it was intelligent enough to be able to go out and identify all those differences and factors in the contract terms.

[20:35] Roger Anderson:

I don’t think in fact in the contract terms that I can get the information. okay, that’s good information.

[20:42] Speaker:

Not payment terms service discounts tax issues, volume discounts. So we’re staffing agency. Okay, it’s a little bit different. So I just wasn’t sure if it could be that specific, because that’s one of our biggest hobbies.

[21:11] Roger Anderson:

I already think HighRadius has worked with the staff and service before. I don’t have hope for the government to like that piece but I know if I can extrapolate that deep into the data needs poll leads to basic formation but when it gets off to a level that I do not know. So at least could identify a known deduction but it might not be able to identify the why, right, but it would sound like that has the potential of making it more streamlined. That depends where that identifies areas of what’s actually on the, on the portal or on the backup information so it’s like a service level email you made 1234 and it’s identified that kind of backup. They could have it. Okay, that can be pulled up.

[21:49] Roger Anderson:

Any other questions for Roger. I believe the next slide is food for thought just to get the crowd thinking and kind of spark some discussion. So protei offer such a speech to. where do you kind of see this automated process in the next five years?

[22:12] Roger Anderson:

Anybody?

[22:20] Roger Anderson:

One thing I learned from being with HighRadius for these many years to is from both sides, working in from the daily aspect and now implementing with other clients are yeah there’s a lot of potential happening, there’s a lot of stuff in the pipeline. I’ll still pray more to come.

[22:37] Roger Anderson:

One thing if you do get with HighRadius, we do have ideas or solutions for them and you’re working and go, Hey, could I do this, make sure you contact your customer success person or your account executives they offer this idea to them. That was a dumb thing to say, Okay, if you’re asking for it. Maybe the other 20 other people are asking for somebody so maybe we can start working on this process or maybe think of new enhancements or new changes to the product.

[23:01] Roger Anderson:

That’s what they don’t like about make models work ideal models with customer success and sound a lot of work tickets to think about. But this gave me an idea to start working on my future ideas are aware of one of the end-users doing on a daily basis that could impact other people that you may not know could be impacted by the same thing you’re thinking about to be big changes. The company I worked for Hormel we had product since 2000 10s we had it for years and still haven’t expanded it or they have expanded on it.

[23:32] Roger Anderson:

So it’s nice little learning tool kept expanding us to new products and all from higher radius, especially to deductions we’d always, always come up say hey, I want to see that. I want it I want to play with it. So take advantage of to if you have somebody that’s in your company that’s kind of likes to get deep into it or start playing around with it, that’s an opportunity to do like one of them can think of the term, one of them, one of you I helped develop the product as they do now they have certain clients that they help, they’ll say, yeah, bring me out and try it out. I’m willing to take a chance you’re one of those people that help build the product for everybody else. So yeah.

[24:11] Roger Anderson:

Any other questions, comments, post audits I’m doing on Wednesday, so I’ll go deeper into post audits, that’s probably where I like the lot of it, besides HighRadius is fighting Post audits, that was probably the funniest part of my job and my team’s job. So that’s coming up Wednesday.

[24:30] Roger Anderson:

All right, well thank you.

[0:11] Roger Anderson: Alright so let's start off. You know about me, I’ve spent 13 years in the deduction management space. I've actually been a HighRadius user, and a consultant now for the last eight years. So I actually was in your role before. We were actually using the system, day to day basis. So I've been through multiple iterations of this e-shift, with a couple of teams and there are three or four teams now. So it's been a challenge. In addition to today's kickoff speech was digital transformation, and that very bottom section that we talked about the A/R analyst, that's going to be key and the seduction for this e-shift, because from my past experience, when people heard about the artificial intelligence, my team freaked out and said, “Okay, you’re replacing my job.” So that's going to be a key in this whole e-shift. You're going to get that question all the time, “Will my job be eliminated?” My kickback to them was, “No it's not going to be eliminated but we can maybe shift your focus to different spots.” So hopefully at the end of this presentation, you have a better idea of what the e-shift…

What you'll learn

From being a paper-based process with heavy dependence on labor to one which is managed completely through web and emails while hardly requiring human interference, Deductions has indeed come a long way. Join Roger where he discusses the evolution of deductions process and debates the impact of these changes on the final outcomes of deductions.

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HighRadius Deductions Software acts as a powerhouse for proactive deduction management to prevent bottom-line erosion. It provides automation, process standardization, and a platform for cross-departmental and customer collaboration. It supports deduction management by providing some key features like back-up document capture which captures deduction data from customers and supplies the information required for resolution; auto-capture proofs of delivery (PODs), bills of lading (BOLs) from carrier portals & emails; structured deduction resolution, collaboration & approval workflows to streamline the communication and approval process; along with automatic deduction correspondence, and automatic data push to customer portals. The result is a proactive deduction management operation that recovers revenue normally lost to invalid deductions.