Lhoist Unlocks $5 Million of Unapplied Cash with In-House Cash Application Software

  • 100% elimination in the lockbox fee
  • 90% of short payments identified automatically
  • 86% hit-rate for check payments
  • 67% increase in employee productivity
Cash Application
Business Transformation Stories

We saw a 100% elimination of keying fees and 86% hit rate for check payments. So that’s something that I think is higher than the average and we’re really pleased with that

Alicia Geades
Sr Credit Manager
Lhoist North America Inc.
Challenges
How did HighRadius help
Impact

Difficulty in Handling Monthly Payment Peaks Spanning to $5 Million Value of Unapplied Cash and Lockbox Expenses

Lhoist was receiving 22000 payments from 2000 active customers, often at the same time each month, making it difficult for their limited team of 3 FTEs to manage these peaks efficiently. The entirely manual cash application process involving massive paperwork led to further delay leading to cash being unapplied even post 30 days of the due date.

In addition to being paper-intensive and complex, the process was also non-standardized and decentralized, leading to inefficiencies such as inaccurate invoices, payment delays, negatively impacted cash flow, and high dispute rates. The teams were thus working overtime, leading to burnout and higher costs and still having about $5 Million of cash waiting to be applied.

High Check Volume and Expensive Bank Fees

There was more to the cash application complexity at Lhoist than just millions of unapplied cash. Lhoist was leveraging banks to process their checks for them, and with 70% of the payments being checks, it ended in costly key-in services for 7 business units, forcing Lhoist to pay a high price to banks.

Non-Standardized E-Payments

Over 30% of all payments received by Lhoist were in the form of e-payments. This significantly impacted processing as the remittances were non-standardized – the team downloaded them from customer portals. In contrast, others were received in the form of emails. In many cases, remittances were missing, and analysts had to work on them manually to find and match them with the invoice. The emergence of new payment methods and changing payment behavior of customers further added to the complexity of Lhoist’s cash application.

High Deductions Volume

With all the added workload, Lhoist was viewing deductions as a burden on their business operations rather than as an opportunity to identify areas of improvement. Sometimes, the cost of analyzing deductions was exceeding the potentially recoverable amount, and the deductions were being written-off, leading to significant losses.

ABOUT LHOIST

Lhoist Inc. has a global presence in more than 25 countries with 100 facilities and 6,400 employees. With a turnover of $2.2 billion, The Lhoist Group is dedicated to serving customers in key market segments such as Iron and Steel, Chemicals, Pulp and Paper, Flue gas treatment, Oil additives, etc.

INDUSTRY

Metals and mining

REGION

North America

REVENUE

$2.2 Billion

PRODUCTS

Cash Application

Plugging the Gaps in Accounts Receivable with Automated Cash Application Software

Lhoist was looking for automation software to help them increase the efficiency of their cash application process while bringing down the expenses involved. They decided to leverage the cash application solution by HighRadius due to the below functionalities that it brought to the table.

Real-time Cash Posting with Automated Invoice Matching:

The solution ensures auto-linking of invoices with the payment, even in exceptional scenarios when identifying the exact account to apply payment isn’t straightforward like in the case of associated parent account with the payment making it difficult to find the exact account to apply the payment against.

Auto-capture of remittance data from check stubs with OCR Feature:

The multi OCR functionality enables capturing accurate remittance information from check stubs closing any need to be dependent on the bank for keying in data.

Auto-Aggregation of Remittance Data:

The solution enables remittance extraction from email body, attachments, password-protected files, EDIs, and A/P portals, saving the time gone into going to the portals and downloading the remittance files manually.

Auto Coding of Deductions and Discounts:

The solution ensures automatic coding of Deductions while automatically assigning customer-related reason codes into the ERP, saving time on manual reason code conversion and reducing dispute resolution time.

Increasing Operational Efficiency and Cost Savings with Cash Application Software

elimination in lockbox fees
of short payments identified automatically
hit-rate for check payments
hit-rate for ACH payments
increase in employee productivity

Autopilot for Order to Cash

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