Solution Overview

Bringing agility to accounts receivable: Integrated dispute management for order to cash

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Limited visibility, siloed operations, and unstructured communications and document management make dispute and deductions management a manual, resource-intensive, and costly function.

Automating the dispute and deductions management process with digital and analytics solutions enables finance teams to track and resolve deductions and disputes faster. Such solutions plug receivables gaps, free-up cash, and deliver agility and financial leadership.

Challenges

Within many finance functions, accounts receivables (AR) teams often manage large volumes of payment deductions and discrepancies, which arise when customers dispute invoices, take advantage of discounts, or levy penalties because of fulfillment-related gaps. As AR teams are dependent on unstructured communication channels and have limited information, they must dedicate a disproportionate amount of time and energy to managing these deductions and disputes. Research shows that on average, 14–16% of deductions and disputes are not valid, and consume 25–35% of the total order to cash effort. Each year, up to 5% of deductions and disputes are unresolved and written off*.

Most AR teams use basic workflow and ERP processes, which can lead to exceptions requiring manual intervention by teams ranging from marketing and sales to credit and collections. This process landscape, characterized by complicated and fragmented operations, significantly inhibits visibility between stakeholders, resulting in long resolution cycles that tie-up cash flow. In addition, write-offs of delayed or unresolved disputes and exceptions cause revenue leakage, which hurts the organization’s profits. And as customer credit is locked up in delayed orders and billing inaccuracies, the customer experience also suffers.

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As CFO organizations work to achieve transparent, streamlined, and automated processes, they are constrained by the limited functionality of legacy ERPs and workflows, as well as the slow adoption of standardization efforts. They cannot rely on costly ERP customizations to solve these challenges in accounts receivables.

Embedding digital technologies and analytics in dispute and deductions management can accelerate process automation, unlock working capital, and prevent revenue loss.

Automating end-to-end processes

Genpact’s Integrated Dispute Management (IDM) solution automates the dispute resolution workflow. This includes the aggregation of dispute and deductions data, and the deployment of a dynamic workflow to provide real-time, end-to-end visibility of all activities (figure1).

Figure1: Integrated Dispute management process flow

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The solution leverages advanced digital technologies, such as natural language processing, dynamic workflow, and robotic process automation, to introduce agile automation with low integration effort and deployment costs.

Key IDM features include:

Dispute workflow: The solution, enabled by dynamic workflow algorithms, routes deductions and disputes to and from stakeholders based on automated scenarios, while maintaining document and data integrity, and leveraging built-in validation controls.

Automated dispute research and analysis: Enabled by natural language processing and robotic-process automation, the solution assesses and codes the dispute and deduction type and cause based on incoming emails and documents. It can also trigger scenario-based routing.

End-to-end transaction visibility: The unified presentation layer provides an end-to-end email, document, and transaction audit trail at a stakeholder level.

Improved cash flow and customer experience

Genpact’s IDM solution, powered by our Lean DigitalSM approach that harnesses design-thinking methods, Lean practices, and advanced digital technologies, enables organizations to improve topline growth and reduce costs.

Net income: The solution can help reduce deduction days outstanding—and consequently, reduce days sales outstanding by up to 15%—while also plugging revenue leakage by up to 5%, which improves cash flow and revenue.

Customer experience: The ease and timeliness of dispute/deductions resolution enhances the customer experience through streamlined, exception-free order fulfilment and billing.

Speed: With close to 95% straight-through processing of disputes/deductions, automated data and document management validation, scenario-based transaction routing and enhanced reporting, the solution accelerates resolution cycle times.

Reduced cost of operations: Genpact’s solution can reduce manual effort by up to 90% in dispute and deductions management, which significantly cuts the cost of operations. Genpact’s Lean DigitalSM approach reinforces the solution. In addition, our order to cash domain experts, who help CFOs across industries realize their finance-transformation goals, accelerate ROI by reducing operating costs, and improving resolution rates and cash flow.

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