How to Achieve Digital World Class Performance with AR Automation https://www.emagia.com/resources/ebooks/how-to-achieve-digital-world-class-performance-with-ar-automation/

1. How to Achieve Digital
World Class Performance
with AR Automation

2. • Introduction
• World Class Performance in AR
• Foundational Capabilities Required
• Automation Capability Required
• Case Study
• Benefits
• Conclusion
• Questions
Agenda

3. 3
Introduction
• The Hackett Group released a study in Q4 2021 stating
that Digital World Class companies:
• Are 34% more efficient
• Commit 40% fewer errors
• Allot 75% of staff time to analytics vs processing
• Can achieve an incremental 17% cost reduction over
current upper quartile performers
• While an optimal mix of Process, People, and Metrics is
also required, Digital Technology is the primary attribute
associated with World Class Performance

4. 4
Hackett Benchmarks for AR:
• Credit Vetting Decision (elapsed time): 2 days
• Average Days Delinquent (collections): 4 days beyond
payment terms due date. Not affected by granting extended
terms
• Cash Application Auto-Cash Hit Rate: 75%
We have clients with hit rates > 90%
• Deduction Resolution Cycle Time: 7 days
• Credit-to-Cash Process Cost as % of Revenue: 0.04%
World Class AR Performance Benchmarks

5. Foundational Capabilities Required
Policy
• Documented policies with clear exception protocols
• Work reduction policies (e.g.: contractual allowance for
shortages & damages, automatic small balance write-off)
• Process: Best Practice process adapted to businesses served
• Metrics: the “right” ones; fewer vs more
• Analytics: insight
• Governance
These elements provide the foundation for success

6. 6
Hyper-Automation is the confluence of Intelligent Document Processing (IDP),
Robotic Process Automation (RPA), and AI (Artificial Intelligence) Powered Digital
Assistants working with the ERP. It can deliver automated processing of 70-90%
of transactions in an operation
If an Operation:
• has a high volume of transactions, and
• is performed manually
• labor savings of 70 – 90% is feasible vs 10-25% of other productivity
enhancing methods
Accuracy and Speed is improved:
• Rework reduced
Automation Capabilities Required

7. • Vendor Portals
• EIPP Portals
• Excel files
• PDF/tiff/gif files
• E-mail
• Fax
• Paper/hard copy
• Lockbox data & files
• MT940, EDI 820, BAI2
Trans.
• Bank Statements
• Credit Applications
• Orders, Remits, Deductions
CUSTOMERS, BANKS,
CREDIT BUREAUS, ETC.
Extracts & Converts
unstructured data into
structured data in a
CSV File
IDP
• Accepts data.
• Basic processing with ERP
• Emulates human interaction with ERP.
• Best with simple, repetitive, high
volume operations
RPA
• Retrieve Credit info
• Compute credit score and limit
• Collections emails with dialogue
• Auto-cash & small balance W/O
• Routes deductions, etc., etc.
AI DIGITAL ASSISTANTS
(As needed)
FURTHER
PROCESSING
As needed)
FURTHER
PROCESSING
90 + % Automation
90 + % Automation
70 - 90 % Automation
Hyperautomation: IDP Feeds RPA & AI & ERP
Unstructured Data Storm

8. • Customizable, online credit application with digital signature
• Automated customizable credit scoring – with real time import
of credit bureau data, verification of legal and tax status, etc.
• Automated AI-powered credit decisions based on pre-defined
rules to assign credit limits
• Full featured Approval Workflow guided by Delegation of
Authority policy
Automation in Credit Risk Management
Gathering the information for a Credit investigation and setting a credit
limit can be almost completely automated, leaving only the quantification
of the credit limit or the review/approval of a machine-recommended one
for human judgement.

9. • Configurable Collections Strategy – multiple parameters
• Prioritized Task List
• Collector Workbench with all required information
• Automated Interactive Dunning - 100% customer touch
performed by AI Digital Assistant
AI Digital “Low Touch” Collections
AI Dunning communication enables 100% portfolio
coverage with a persistent request for payment
and logging of Promise to Pay when successful

10. • IDP extracts remittance data from multiple customer
sources/documents in multiple formats (read & keypunch)
• Remittance data automatically applied to open invoices by
Auto-Cash engine at 85% - 90% hit rate
• Automatic creation of deductions to be routed for resolution
• Automatic execution of small balance write-offs and matching
debits to corresponding credits
AI Digital Cash Application
Reading data and inputting it into a file consumes
the most time in manual Cash Application. It can
be 95% automated.

11. • AI-assisted dispute reason code assignment (reason code read from
remit advice and translated)
• Full featured Workflow to route deductions to assigned Resolver, with
audit trail, internal dunning, & robust reporting of status & results
• Automatic credit to debit matching & clearing
• Root cause Analytics to fuel process improvement efforts
AI Digitally Assisted Deduction Resolution
Deductions are routed thru resolution process and cleared
from AR Ledger automatically

12. 12
Problem Overview
AHA launched eCommerce site ShopCPR to sell CPR equipment and classes
online. Credit Processing cycle time was over 2 weeks. They needed B2B
digital credit solution to accept more customers and do more business.
Customer Value
• Deployed Emagia Digital Credit Solution - Mobile and ADA compliant
• Digital signatures, digital trade and business reference checks
• Integrated with Experian, AHA custom score-card, automatic credit limit
decisions enabled.
• AHA reduced B2B credit approval process from 2 weeks to 1 to 2 days
• Now processing over 200 -300 credit applications per month
• Scalable foundation for digital ecommerce growth
Case Study

13. 13
Challenge:
AR management needed overall improvement.
SAP deployed in 30 countries, multiple languages
Solution:
Emagia AI-powered Hyper-Automation Digital Assistants for Deductions,
Cash Application, Collections and Analytics modules
Customer Value Achieved:
• Deduction resolution cycle time reduced to 5 days
• Auto-cash hit rate increased from 50 to 80%
• DSO reduced 7% in 6 months
Customer Success Story –
Global Medical Products Supplier

14. Enhanced Effectiveness: World Class AR Performance
Cost Savings: staff cost, bad debt expense, funding of AR
Improved Customer Experience
Increased Cash Flow from AR
Higher Cash Flow & Lower Cost
over the Long Term
Improved Customer
Experience/Satisfaction
Low Cost
Operations
Greater
Cash Flow
Increased Cash &
Profit
Benefits of AI Digital Automation in AR

15. Conclusion
• World Class Performance in AR Management is an
important competitive advantage
• Policy, Process, Governance, etc., are foundational
capabilities that enable World Class Performance
• However, it is AI Driven Hyper-Automation that
enables World Class performance

16. If you have any questions or comments
about this session, please let us know
in the chat box or write to us at
info@emagia.com
Orders
Credit
Cash
Application
Collections
Deductions
Payments
Invoicing