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Dealing with Increasing DSO and Dispute Volumes with Artificial Intelligence

  • 87% Increase in Analyst’s Productivity
  • Improved Visibility for A/R Reporting
  • Record Time Processing of Claim Disputes
Cash Application
Deductions
Business Transformation Stories

HighRadius simply offered the best solution to Komar’s need for automation.

Rebecca Cassel
Director Operational Compliance-AR/ Collection
Komar
Challenges
How did HighRadius help
Impact

Challenges

Being involved in distribution on such a global scale comes with some challenges of its own. In the case of Komar, the most significant difficulties revolved around the application of cash and managing deductions or discounts on such a massive scale.

Blocked Orders due to Lack of Inter team Collaboration

A/R teams were separated because they worked in silos, making it difficult to coordinate. They couldn’t release a customer’s credit limit as long as their payments were not applied, or they couldn’t apply cash until deductions were resolved. This created a negative customer experience and they also ended up having many orders blocked until they received an erudition or update on cash applied from the other teams.

Bottom Line Erosion due to Inefficient Deductions

The only ‘pre-notification’ claims Komar received were from customer emails or from manually logging into each customer’s website to obtain them. There was no prior visibility to most claims and further manual disputes were very time-consuming. Komar discerned that they could not dispute some claims in time and, thus, were not reversed. This led to bottom-line erosion and reduced employee productivity.

Delayed Cash Processing and Increasing DSO

The cash application process was entirely manual. Each transaction was obtained from the bank and
printed for reference. The claims department manually coded deductions and made copies of the
check in case of disputes. They performed manual entry for posting, grouping allowances, and filing
each document for future reference/audit. The manual nature of the work raised the cost and caused a
delay in processing cash. It also resulted in increased DSO and harmed downstream processes such as collections and deductions.

ABOUT KOMAR

Established in 1908, Komar manages a diverse portfolio consisting of owned, licensed, and private label brands. Their apparel distribution is spread across the globe and operated by Komar Distribution Services.

INDUSTRY

Wholesale Distribution

HEADQUARTERS

Eastvale, CA, United States

REVENUE

$250 Million

PRODUCTS

Cash Application, Deductions

How did HighRadius Help

Seamless Integration with other A/R Processes and Teams

The cloud solutions provided by HighRadius and leveraged by Komar allowed them to automatically apply cash against an invoice. It also allowed seamless integration with other A/R processes for capturing remittances and retrieving data for deduction coding. Komar’s A/R teams no longer had to wait for information on cash applied and could resolve orders in real-time with the cash application.

Deductions Cloud

HighRadius transformed the deductions landscape at Komar Distribution using Deductions Cloud by focusing on the criteria below.

Auto Aggregation of Backup Documents

Deductions Cloud brought in automated deduction coding and dispute management. It reduced the overall deduction research time due to the auto-aggregation of backup documents from customer A/P portals, carrier portals, and emails, with its inbuilt technology.

Easing Dispute Flow with Deduction Grouping

Deductions Cloud enabled category grouping, making it easy to build reports/notifications and notify the specialist. Grouping many deductions helped by reducing valid claims and allowed more time to

Smarter Resolution and Predicting Deduction Validity

Deductions Cloud introduced recommended next steps for each deduction and the tracking of deduction status, leading to faster and smarter dispute resolutions. This meant fewer write-offs and reduced the bottom-line impact that came with it.
The solution also predicted the validity of deductions based on customer history and dispute characteristics, and automatically sent correspondences.

Collaborative Workflows for Tracking and Approval

With smart workflows enabled, the solution seamlessly initiated approval workflow across hierarchies to fast-track resolution. The Deductions Cloud also supports note-taking and task-assignment internally for the convenience of analysts.
The HighRadius solution saved all new claims as “Pre-notification” and merged any notes or modifications into actual deductions.

Cash Application Cloud

HighRadius transformed Komar’s cash application process by leveraging AI to apply cash, making the process swifter and increasing analysts’ productivity along the way.

Auto Aggregation of Data

The solution brought in multi-OCR Engine auto-captures, accurate remittance data from check stubs, and ensured noise reduction. It auto-aggregated remittance data that ensured remittance extraction from email bodies, attachments, password-protected files, EDIs, and A/P portals. It also automatically posted cash concerning invoices.

Automated Cash Posting and Deduction Coding

Cash Application Cloud made straight-through cash posting possible using an intelligent A/R matching engine. This enabled each transaction and check to be coded and grouped according to set rules; they are then checked for accuracy and auto-posted. With automatic and accurate cash posting, days sales outstanding was considerably regulated.
The solution also allowed automatic matching of all remittances against open invoices and automatic deduction coding.

Missing Remittance Prediction

The cloud solution also opened doors to automatically self-learning and identifying previously unidentified remittances. The AI-based remittance prediction also suggested missing remittances, allowed the analyst to choose from multiple suggestions provided by the solution, and gave real-time information to reduce exceptions.

Impact

Increase in Productivity
Cost Savings due to Headcount Reallocation
Record Time Processing of Cash and Resolving Disputes
Enhanced Visibility into A/R Reporting
Rebecca Cassel

We were able to combine a number of departments where it takes an entire department to apply cash. We now have one person applying cash, and it doesn’t even take a full day.

Rebecca Cassel
Director Operational Compliance-AR/ Collection
Komar

Autopilot for Order to Cash

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