“We had a very lengthy cash application process. There was a large backlog of cash application that would date back a week or a month. It never really seemed to happen real time.”
The accounts receivables process at LifeStraw was primarily controlled by a small in-house AR team of 4 members. In the absence of an automation solution, the AR team had to manually apply the cash which was time-consuming and inefficient.
The team at LifeStraw realized that they need a holistic approach to enable digital transformation and address the issues of inconsistency and labor-intensive manual work in their cash operations.
Amazon and Walmart make up about 50% of LifeStraw’s business, and the biggest challenge was keeping track of the large volume of invoices and short payments. With just 4 FTEs trying to manage the peaks—the manual, disconnected, and reactive process of handling invoices, short payments, and the resulting collections resulted in overall inefficiencies in the Order-to-Cash process.
Lifestraw’s cash application process was tedious, lengthy, and not same-day. Remittances were aggregated across different sources such as emails and linked with the payments manually. Invoice lookup and matching were time-consuming, followed by manual posting into the ledger. Analysts spent most of their time going through individual accounts and handling cash manually.
While the AR teams recorded the receipt of the payment, the actual application process to clear these specific customer invoices didn’t happen in due time—resulting in a backlog. This delay in cash application led to a pile-up of disputes since the invoices and short payments were not triaged in time.
These challenges resulted in higher DSO and, therefore, bad debt. The inefficiencies in Cash Application cascaded downstream to Deductions and Collections necessitating a large amount of manual work to keep with the company’s growth. Reducing these inefficiencies would help them target bigger goals for the company.
LifeStraw was looking for a strategic solution to help them boost process efficiency while ensuring scalability. The team wanted a cloud-based solution that could seamlessly integrate into a plug-and-play model, with minimal business involvement and zero dependencies on their internal IT teams. RadiusOne Cash Application App was a perfect match for their requirements.
LifeStraw is a clean water solutions company dedicated to redefining the safe drinking water space through technological advancements, innovative product design, and impactful programs. From communities in need to global travelers and wilderness expeditions, LifeStraw provides various safe drinking water options worldwide.
Consumer Packaged Goods
Baltimore, MD, United States
“The way the HighRadius team detailed the overall integration between Netsuite and RadiusOne was a huge selling point for our organization. The overall implementation process was very simple for me.”
LifeStraw achieved operational efficiencies by improving staff utilization and enhancing productivity by automating their processes with RadiusOne AR Suite.
The solution ensures that invoices are automatically linked to payments. The solution helps deal with even unusual situations where identifying the exact account to apply payment is difficult. For instance, LifeStraw has customers with complex parent-child relationships. The solution helps identify the right account and invoices to apply cash and saves numerous person-hours.
The team at LifeStraw was able to minimize time and resources lost in manual remittance aggregation by automating remittance data aggregation without having to download it from web portals or emails. Further, the Multi-OCR Engine auto-captures accurate remittance data from checks.
The solution helps extract information and invoices from correspondences directly and provides real-time tracking insights into payments.
The solution offered an easy and seamless implementation with LifeStraw’s NetSuite ERP, allowing the solution to be implemented in just four weeks without any IT dependency. The solution was also budget-friendly and suited to LifeStraw’s needs.
“Currently, cash application is managed by our accounting department, which is where it should be from an organizational perspective. However the ability that HighRadius enables for us is to properly plan our organizational resources properly and save on future FTE investments within that department.”