Cash (Application) is King

600px-shutterstock_158110817Cash application is a deceptively simple process: apply customer payments to open receivables. Many companies admit they are not handling it well. Yet, the trickle down effect is quite significant, resulting in better visibility for A/R managers and lower cycle times.

Unfortunately, the cash application process is often neglected, and in many companies, highly manual and time-consuming. It’s not uncommon to find personnel scanning (and re-scanning) remittances, searching for POs and keying in payment details manually. Combine this inefficient environment with a fast-changing world where remittance is now sent in a variety of formats from paper checks to credit card to e-transfers, and the ultimate result is a bottleneck between customer payment and working capital. Continue reading

Stop Collections Roulette

accounts receivableEvery year, companies around the world write off millions of dollars in bad debt caused by both B2B and B2C clients who cannot or will not pay their invoice.

Yet in these times of uncertainty, the collections function is under increasing pressure to up their game, moving away from best-guess and “my experience tells me” approaches.

As the volume of information that businesses amass rises exponentially, more and more organizations are moving away from a traditional reactive approach and instead leveraging predictive analytics technologies.

Predictive analytics can not only help companies understand which customers will pay, which ones will delay or who is more likely to default, it can also transform an Accounts Receivable department, vastly improving cash flow. At Sutherland, we have seen up to 15-20% improvement in accounts receivables management (credit period, delinquencies, etc.) simply by analyzing current and historical payment data. Continue reading

Speeding up the Slow Flow of Corporate Receivables

hospitalityHow many conferences or events did you attend last year? One, two, five or more? If so, you’re not alone. The conference industry is booming, and with it, corporate event room rentals and accommodations play a significant role on the hospitality industry’s balance sheet.

All hotels recognize that prompt payment of all corporate billing is key to ensuring cash flow and profit margins. Yet, it is not unusual to see corporate accounts receivables with an average collection period of 60 days or more. This can have a downstream effect on financial statements, budgeting and collections – as well as a hotel’s ability to pay its short-term liabilities.

There are some key challenges facing hospitality organizations: Continue reading

Healthcare: Revenue Management’s Impact on the Patient Experience

healthcareIn the healthcare industry, organizations are dedicated to delivering high quality, effective and compassionate care, which is equally balanced with the key imperative of cost management. It’s a tightrope of patients’ experience balanced with profitability.

With this ongoing pressure to improve financial performance and patient experience, healthcare organizations are closely eyeing the revenue cycle for both cash flow performance improvement, as well as assuring patient-friendly practices.

Patient experience can be described as the sum of all interactions with a healthcare organization throughout the continuum of care – from initial diagnosis to final payment. How any organization helps guide the patient’s journey through the maze of healthcare payment and reimbursement is mission critical to customer experience.

Setting Expectations

Too often, patients are left in the dark concerning the revenue aspect of care, which can lead to unpleasant surprises. And, a revenue cycle management employee may be the last point of contact for the patient, at a time when they are vulnerable and healing. Continue reading

The Top 5 Advantages of Outsourcing Collections

accounts receivableIt seems you can’t open any business magazine or newspaper without seeing some article about cash flow pressures. In these tough economic times, cash flow is the lifeline of any business. Getting paid on time is key, and when you don’t, then getting collections right is more important than ever.

Businesses must make the most of their limited capital in order to stand up to – and surpass – the fierce competition. Effective management of credit and collections in-house can be a tedious and complex task that consumes huge amounts of resources and employee time. During these leaner times, it simply isn’t an option to have bad credits or failed collections.

A growing number of companies are beginning to leverage outsourcing to be able to focus on their core business and remove the administrative and transactional processing burden. Here are the top five advantages to outsourcing collections. Continue reading

Delivering Value Beyond Cost: F&A’s Role in Customer Experience

Companies have long emphasized the high value of customer care touchpoints—those critical moments when customers interact with the business throughout the buying cycle. When organizations are able to adroitly manage the end-to-end customer experience, the benefits are numerous – from improved revenue to greater customer satisfaction and loyalty.

Yet, usually the customer journey is viewed through the lens of the front office –customer service and support. The reality is that many other departments within any organization contribute to the over-arching customer experience. This includes the Finance and Accounting department.

For example, we worked closely with a global Fortune 500 technology manufacturer and distributor client to consolidate, standardize and apply best practices to their Accounts Receivable processes. During this engagement we learned how a customer order—processed either accurately or inaccurately—impacts both the customer experience and the correlating back-end costs. Continue reading

Are You in Denial?

Healthcare organizations understand that they need effective revenue cycle management to successfully transition to a value-based reimbursement model.

As of October 1st, the move to ICD-10 – the 10th revision of the medical classification list by the World Health Organization (WHO) – came into effect. This revised classification system has much more complexity, as there are north of 68,000 existing codes, as opposed to approximately 13,000 in ICD-9. The long-term resulting benefit of ICD-10 for providers, coders and patients will be its greater specificity; the ultimate goal is more accurate billing and better descriptions of procedures, conditions, illnesses and medical needs. (Struck by a duck? Sucked into a jet engine? There’s a code for that. )

Although the Centers for Medicare & Medicaid Services (CMS) has provided a General Equivalent Mapping (GEM) tools to convert ICD-9 to ICD-10 (or the other way around,) this translation system is burdensome, with many missing relationships, resulting in convoluted and inconsistent mappings. Continue reading

Technology Spotlight: SmartLeap Global Accounts Receivable Management

Technology.pngCompanies wanting to remain competitive must prioritize strategy, growth and innovation. They can’t afford to waste time fixing inefficient systems and processes – and they certainly shouldn’t waste valuable resources on them.

Unfortunately, too many businesses (and their F&A or Collections departments) grapple with ERP systems that fail to deliver what they need, and at a cost they can manage. Companies today are contending with systems that:

  • Deliver data, not information they can quickly work from
  • Face high license fees for additional modules / functionality for Collections management
  • Can only be implemented if they have higher place ranking than all other enterprise-wide IT projects
  • Might require day-to-day performance management via Excel (resulting in time-consuming “swivel chair” processing)

The business impact of these inefficient systems is tremendous.  Accounts Receivable personnel focused on improving working capital and reducing the cost to collect are often ” in the dark”; frequently working with out of date or incorrect data and without relevant, insightful decision making information. As a result, companies suffer from high days sales outstanding (DSO), missed cash collection targets, lack of cash-flow predictability and higher than target write-offs. Continue reading

Three Ways to Improve Collections

In these turbulent times, where cash flow is critical, getting collections right is more important than ever. Yet surprisingly, too few businesses capitalize on the opportunity to transform their Accounts Receivable department through automation, analytics and people to help reduce DSO. Here are three effective ways to immediately lift your Collections department’s performance.

  1. Use Collection Analytics

Collections analytics offer a way to create an efficient, cost-effective strategy that will maximize Accounts Receivable recoveries without disrupting customer relations. In our experience, we have seen up to 15-20% improvement in accounts receivables management (credit period, delinquencies, etc.) by analyzing the historical data.

The use of analytics in the collections process yields several significant benefits:

  • Improved Collection Efficiencies
  • Reduced Collection Costs
  • Increased Recovered Amount
  • Enhanced Customer Service

Continue reading

Financial Services Case Study: Innovating F&A Processes for Improved Customer Service

case studyIn 2014, one of North America’s most established banks engaged Sutherland to help them achieve world-class customer service.

The publicly traded institution generates $80 billion in annual revenue. With close to 1 million customers, they had a clear understanding of the need for customer satisfaction. But they were up against a few hurdles, and wanted to do something about it.

Our client had a disappointing experience with their previous F&A provider; the firm showed a lack of focus on customer service, and overlooked the importance of quality deliverables, process improvement and accurate reporting. So when the prestigious bank approached Sutherland for support, we knew exactly what to do to get them back on track.

The Sutherland Solution
We began by assessing our client’s existing practices and technologies, always with a integrated view of the front and back office to helping them deliver the best customer service possible.

The Sutherland team determined that the bank needed to streamline and update its overall approach. Their corporate finance strategy required more innovative, transformational leadership in Accounts Payable, Expense Reimbursement, Fixed Assets and General Accounting.

We implemented our SmartLeap™ F&A AP Platform into the client’s instance of SAP to drive 50-100% efficiency in systems usage.

Next, we created a Service Portal designed to provide a simple, accessible Governance and Delivery structure, which would improve knowledge sharing, quality reporting and internal communication. The portal included:

  • Real-time dashboards
  • Document repository
  • Metric reports
  • Collaboration Center

In addition, we developed a variety of cost-saving solutions that enabled the bank to reduce FTEs for AP, T&E, Vendor Management, Fixed Assets and General Accounting. Sutherland also consolidated their F&A functions to a low-cost offshore location, and implemented onshore oversight and account management from our Tulsa, Oklahoma Center of Excellence.

The Benefits
Sutherland’s innovative, comprehensive financial services enabled our client to streamline and modernize their processes, significantly reducing the cost of operations. Specifically, we helped them to:

  • Deliver initial and steady process improvement using Sutherland’s Governance & Performance Management model
  • Reduce FTEs by approximately 30%
  • Achieve additional 20% savings by replacing third-party tools with Sutherland’s SmartLeap™ GL reconciliation and procurement platforms

As a result of Sutherland’s partnership, our client was able to consistently deliver improved performance and services. With more timely and higher quality reporting combined with better internal communication, our client has greatly increased customer satisfaction and has solidified their reputation as one of North America’s top banks.

Take a look as our Beth Merle explains how banks and financial institutions can get started on their journey to outsourcing.

If you’re looking for a provider that understands the unique challenges of the financial services industry, and the importance of exceptional customer service, we’re here to help. Just give us a call. Questions about this case study? We’d be happy to answer.