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Cash invoice format for Technical Support

well good afternoon everybody and good morning to folks on the west coast uh just want to thank everyone for having me here today so today we're going to talk about best practices for automating and accelerating invoice to cash um so I'd like to start off by telling a story now I imagine that everyone is at least passingly familiar with the decline of Blockbuster and the rise of Netflix and how the two happen nearly in parallel you might not realize is that Blockbuster actually had the opportunity to purchase Netflix not once not twice but actually several times now this lack of action has been laid at the feet of Blockbuster CEO who by all accounts was an excellent manager but lacked in strategic Vision Netflix on other hand realized it that they needed to innovate because they too were having severe challenges now I've been a Netflix customer for the better part of a decade I remember when my wife and I were first debating about which level of membership we were going to get and we decided to go all the way in and get their best tier which allows to have a whole three DVDs at a time so you we're all excited we settle in on a Friday night you know getting ready for our weekend watching TV and by Saturday morning we realized we've already watched everything and exhausted our entire plans for the weekend now we had to package up our DVDs mail them out wait for them to return and we would have any new DVD until Tuesday at the earliest at the time you know we thought that maybe we shouldn't give up on blackbuster just yet because the Netflix product was pretty limited you know and we're like why would Netflix restrict even their best clients so much well it's because Netflix had limitations even with those types of restrictions in place Netflix was still processing 190,000 DVDs a day they expected their employees to process a thousand DVDs per hour it was so bad that Netflix man needed mandatory exercise breaks and an attempt to reduce carpal tunnel syndrome clearly this was neither a sustainable nor scalable solution so as you can imagine Netflix struggled with growth and a plateauing stock price so in much the same way we see the same thing in AR with invoice to cach it's a very manual encumbersome process the customer is not pleased with the service and it can't scale with organization desires so let's get back to Netflix for a few more minutes so what did they do to address those pain points well by innovating and leveraging new technology they launched their streaming programming this allowed them to transform and scale their business in a huge way but what I don't think Netflix really gets enough credit for is what was the impetus for the direction of their Innovation they expanded based on their customers desires which is an important key to their success you know for now my wife and I didn't have to hedge our Bets with other potential services and providers like Blockbuster now some people on the webinar might bulk at what I'm going to say but I think it's really important to consider the pulse of your business isn't about your products or service it's really about your client's reaction to those products and services that drives cash flow what you want is cash flow to invest and expand and innovate to meet your customer's need and predictability to grow the business manage your expenses and you know reduce DSO and your customers are at the same time are looking for a smooth user experience but one that's on their terms and these two highly dependent aspects of your business customers in cash are absolutely critical to your success and so when you think about that how you interact matters every time you interact with your customer it's an opportunity to show them that you value them and their business business and it drives the ability to seamlessly send cash back into your business conversely a bad interaction whether it's an incorrect invoice a late payment a misapplied payment impacts not just your customer and your arap teams but also your sales team customer support teams and sometimes even marketing it teams and we'll touch on that in a minute and and that ripple effect can be costly worldclass organizations understand this they really really do and what they do is they look for transparency and visibility into their operational processes especially their financial ones to ensure both customers and cash are in good health so how did we get to this incredibly complex place of invoice to cash well if we look back 30 to 40 years ago the invoice to cash process was really simple paper invoices went out paper checks came in simple but it was a very long and manual process you F forward 10 years to the 1980s EDI electronic data interchange came along so now Electronic media is in the mix invoices and other business information can be transferred pretty much instantly if we fast forward again and beginning with the 1990s internet and email invoices can now be delivered websites websites they allow access to account information and invoices on demand businesses are now taking payments online with credit cards and a so technology created a faster way for customers to manage their accounts and their money however on the other hand multi- Channel options are creating layers of real complexity and Chaos for the businesses that are trying to serve them and don't forget all this time we're still serving and supporting customers who prefer paper invoices and checks now good organizations know they have these challenges but understanding exactly where they are can be extremely difficult we had worked with one client uh who knew they had a problem but again they didn't know exactly where the their issues lay so to get to the bottom of the issue is necessary to pull apart all the layers and we saw just incredible complexity multiple vendors disperate systems they're trying to manage all these different channels and all the different parts of the process so this meant that their various Point Solutions were not integrated not easily sharing data and not providing visibility to themselves or their customers and it also meant that there were multiple points of potential failure to the system this placed multiple stressors on their entire team and this is what we really need to unravel so I mentioned earlier that it impacts the entire team and because many times the invoice to cash process is seen as an AR only issue but the challenges associated with the AR spread across the entire Enterprise let me start with customer service think about this how much time does that team take explaining invoices and the time and resources spent creating duplicates for missing invoices and then there's also the unhappy clients whose Services have been restricted due to non-payment on the invoices well that they claim they never received and if we look at sales if your organization is seen as difficult to do business with your clients are going to look to your competitors for better options really this is not so different than when my wife and I were hedging our bets against Netflix negative customer experiences in turn impacts the marketing team right because they're working hard to build brand and expand market position and that's not often considered but what you do have to consider is that invoicing is one of the most frequent and impactful channels of communication with customers if this isn't a positive and easy experience now marketing has to work that much harder just to build up the Brand's reputation and the team that I think is really silent and invisible but suffers a great burden is the IT team they have to support the entire invoice to cash process because they drive the ability to automate the process reduce the manual tasks and offer touchless processes to the customer so the entire business is affected by the efficiency and convenience of the invoice to cash process so you know often when we talk to it they speak of the challenges of being forced to build ad hoc queries dashboarding reporting SQL scripts and this doesn't even take into account the maintenance of the internal infrastructure to support the disperate systems this can take up so much time that the IT team can't focus on their core competencies and thus as a result the rest of the organization suffers because it has a greatly reduced bandwidth so what are we seeing in the whole world as it relates to this well looking strategically 79% of organ organizations see their current invoice to cash process as a real Challenge and they're moving away from paper and trying to move to automation an effort to reduce DSO and does in turn increase cash flow tactically well we're seeing that one of the biggest drivers is actually IP automation funny enough many organizations move to a more automated AP process but what this has done is it shifted the burden to the AR team who are being asked to do more so what are some of the more specific challenges that we're seeing well we had mentioned the dis the disparate systems what are we specifically seeing with that well no visibility no tracking there's a huge lack of data integration um there's multiple invoice preferences from the buyers um the manual labor and high cost of print for invoicing and just trying to manage short pays and Reconciliation for that and then that's not even to mention the growing security risks and Regulatory Compliance mandates that can complicate the process and then again going back to the dis systems if they're not all equally up to date well your headache to manage it all becomes that much more painful so that's why what we're seeing is that worldclass organizations they invest in processes and automation that help their people run the connection between their business the customer and their cash flow most effectively in fact the hacket group reports that organizations that are leveraging Tech and automation for Process Management they spend 40% less on operations and what if you zeroed in on your AP processes or customer invoicing process for example well research shows that organizations who focus on optimizing their invoice to cash process for example spent 85% less we had we spoke with one particular organization HD Supply they're actually one of the largest maintenance suppliers in the country um they had implemented rules based matching and electronic adoption for example and they also had um done some work with self-service portals and just by doing those three things they saw a 70% reduction now these organizations that drive to the higher standards they see not only those savings benefits but they also see an increase of 26% in their cash flow over their peers now keep in mind that 26% over their peers that those aren't figures against laggards these are against peers who are utilizing what is considered standard methodology so that is a very significant increase now when we look at the key to accelerating cash flow the real key to driving that cash flow is quicker payments to be more specific quicker electronic payment if we had a utopian you know invoice to cash process you would have something that was completely automated accurate and touchless and while electronic invoicing is easy and it is on the rise delivering an invoice quickly does not mean that it's getting paid right away what happens is the customer gets bogged down in the process when they have to print an invoice and then mail a check and then walk it down the hall and then key in the payments when they have to do this all the time it just slows everything way down but you know with electronic payments that are streamlined and can be integrated with a cash app solution then you're actually taking significant time and you know many times this is literally weeks sometimes even months out of waiting for payment however it's not just that simple this can prove challenging for organizations especially ones that run on San margins credit card fees can be high and credit card transactions also POS a security risk so and you know there have been numerous examples in the past and but I'm sure that everyone is aware of the relatively recent issues that even big Brands like Target and Sony have had so without an integration and automated cash apps soltion they're still very manual timec consuming and risky Behavior compounding this when the electronic payment come in they're usually decoupled from am mittance and this adds time cost and manual labor and that isn't even considering the additional cost of maintaining PCI compliance which can be incredibly daunting so let's talk a little bit about the best practices since we kind of now have a good idea of the challenges in the land landscape the first area is payment SE management is the invoice delivery there are ways to examine best practice for both print and mail delivery and electronic delivery even with the shift towards electronic invoicing traditional print mail services can't be entirely cast aside the truth is not all businesses are comfortable with adopting an electronic solution and they still rely on paper invoicing to conduct their business so although print is very manual there are ways to digitize your process through a variety of best practices and Technologies so both print and electronic and voice delivery it can be seamless efficient flexible and transparent and most importantly it can be uh you can leverage the data that you already have in your Erp system and you know really this is where the largest impact can be made if you have a seamless transition between your infosystem and your invoice to cash solution where you're able to integrate invoice delivery and payments directly to in this leads to a more efficient automated and accelerated invoice to cach process because by having your electronic invoice delivery solution pulled from your Erp it's then very very easy to reconcile payment information later when your customers pay electronically basically you essentially create your own closed loop environment now the invoice delivery process with no surprise to anybody starts with the invoice itself so no matter your delivery method whether it's print or electronic you can still include sophisticated formatting and tracking you know in the past invoices were relatively standard they afforded minimal customization and tracking capabilities but fortunately invoices have evolved they can now be fully customized and dynamic and easy to track a lot of companies today actually have multiple branches or subsidiaries each with their own logo and branding and you should have the ability to create different invoices formats and such for each of those logos in your invoice liy solution it really should be intelligent enough to automatically send that correct information to the right customer and in speaking with some info folks this can be a real challenge when trying to work through the Erp system more to that um when you rely on the traditional tracking with the US PS or UPS or FedEx it's really just not enough best practices includes adding dual Park barcoding technology to each and every invoice you send out because that will virtually eliminate the risk of invoicing errors or missing pages thus you know with that invoices can be read through a scanning system that ensures the right customers is receiving the right invoices and more to this often neglected is a smaller of the invoice that should be dedicated to messaging now it can be used to ruin a new product or let customers know that they receive this invoice electronically through your online portal most importantly the messages should be easy to swap out and change as often as needed now if you require customer signatures as part of the invoicing process it's also really smart to always include a copy of their signature on the final invoice because this reminds the customer that they've already signed off on the goods and services that you're invoicing them for when you rely on traditional tracking to track invoices one of the challenges you'll see is that you're only able to track the invoice using a really long complex number string right the tracking number you won't be able to track that invoice by searching for your customer by name or by account number so you should use and add a separate barcode that identifies the invoice based on key identifiers like account number and customer name there are some other strategies that you can incorporate to make your print and mail delivery process even more efficient so let's uh let's imagine a scenario where a frequent customer rers places consecutive orders within a given week the first order only amounts to $15 if you know they're going to be placing more orders it really doesn't make much sense to occur a $150 charge uh on every single mailing when you can wait to combine the invoices into a single envelope and then send them all at once this is something that we call Bull petting Now when using this strategy it's important that you have the ability to completely control the process you know at a certain point a higher invoice dollar amount will ser outweigh the nominal postet Tre just so it's smarter to send that invoice immediately so you get paid faster using smart bull penting standards and Technology well all you to set you know parameters for dollar threshold a maximum number of whole days so you're not waiting too long for the customer reorder to hit that threshold and even specific accounts to exclude from the bullpenning process uh you know maybe entirely in case they need their invoices sent immediately so you know this point nearly everyone recognizes the advantage of taking the inefficiencies of paper out of the process which include DSO reduction accelerated cash collection in additional lower cost and higher efficiency so what is standing in the way well technology certainly isn't an issue you know for years software Solutions have enabled uh companies to send 100% of their AR invoices in Billing documents electronically more recently the same capabilities are available through software as a service and infrastructure as a service model you know what it is is more than anything the barrier to automated AR invoicing is a contact management issue companies need a practical way to resolve varying customer supplier uh preferences for receiving these documents so AR invoice automation can enable companies to easily satisfy changing preferences and tailor invoice delivery to the circumstances of each of your customers it can also Empower your customers to control their own methods and frequency of communication so as they become ready to adopt e invoices customers can log on a secure site to choose paperless electronic delivery and designate the appropriate recipients for documents and filling in the preference delivery preferences now invoice delivery should focus on Multi Channel approach that's flexible it's transparent and seamless for when your paper customers are then ready to jump and make that transition you know to the 1990s from print to electronic delivery now when we factor in all that goes into the B2B payment reports are showing that 80% of businesses still have a manual process tucked away with their payment management methods so if you're thinking oh man I I do some of this don't worry you're not alone probably most of the people on this webinar have some form of manual process in their system today now more businesses are fortunately over coming concerns of transferring over to the a network um they're also beginning to realize that digital payments provides the same level and quality of data as they would have with papercheck sitting right in front of them with a remittance detail will also be transmitted which it was a historical barrier to adopting a and it no longer obviously is so the added benefits of security lower fees on payments and a reduction in the number of outstanding payments or checks are three more reasons why a seems to finally be catching up after several decades so um a little bit earlier uh we had discussed the challenges that were placed on different areas of the organization and and I mentioned that PCI can hit particularly hard PCI compliance is is a really cumbersome internal process for most organizations and there's an increasing Trend to outsources and that's actually a really smart move for a lot of organizations because by Outsourcing it gives organizations the ability to reduce your PS I'm sorry your PCI compliance scope because there's a bot an average annual cost of a quarter of a million dollars for large Merchants um for a PCI audit and it's really resource intensive process and it it really doesn't have that many rewards um the scope of the audit is it's intrusive and requires an external order if you're a level one Merchant and even if you're not your level two three or four you still need dedicated internal resources to spend months analyzing and evaluating you know an environment and internal processes to determine compliance and that's without the guarantee of ongoing security Now PCI standards present Technical and operational requirements uh for protecting card holder data as well these standards apply to any organization that stores process or transmits card holder data so by Outsourcing to a PCI level one compliant organization it gives you the ability to reduce your PCI comp compliance scope that includes the reduction in the forementioned quarter of a million dollars and when directing customers to you know a hosted payment Channel and removing stored credit card data from your own payment environment you now effectively render four of the 12 PCI compliance um Obsolete and that's a huge Boon to most organizations now something that's often ignored is giving the customers the ability to manage and control how where and when they pay again going back to the Netflix example innovating to meet the needs of the client and cloud-based payment portals they give your customers the ability to manage and streamline the invoice approval process which in turn helps get your business paid faster you know functionality such as autopay can help reduce delinquent payments and payment portals can give you insight into short pay discrepancies so if your customer is short or overpaying you for any reason they should be prompted to explain the discrepancy so you're always in the no with 100% visibility into all payment activity now as much as most organizations will strive for it unfortunately we will not achieve 100% electronic adoption in the foreseeable future um so what are some of the challenges in breast practice to deal with decoupled remittance stat pays that still come in the mail well when we talk specific to the cash application process there are many many challenges that a business faces you know you've got processing multiple forms of payment and that's complex and expensive it requires manual labor paying for keystrokes from a lock box managing exceptions and dealing with workflow issues you know customers are paying via more methods um you know and like I said despite the CL that paper is dead it's not the case we're still straddled with paper checks electronic payments are growing where remittance data is coming separate from payment as we mentioned um this is a major pain point to manage Now While most of us here are completely invested with in for some companies are growing through acquisition and mergers and ending up with multiple Erp and divisions and this creates challenges for post- and cach again we were talking about those disperate systems so in today's world of automation technology the world is seemingly taken over by robots you know from IBM's Watson to self-driving cars to artificial intelligence and now robotics now before we welcome our new robotic overlords we need to ask what strikes the right balance between just enough Automation and what's too much so often you'll hear people refer to Ai and robotic process automation what's not talked about is the fact that it's unsupervised custom rules are often needed to actually teach the AI suffer how to think and make decisions for you although they continue to evolve AR and RPA still lack the critical ability to recognize data with guaranteed 100% activity the process only works well with repeatable decisions that have clear definitions but as you know even in today's world of autom your customers don't always pay the exact same way each time and that involves still a lot of guess work so you need a way to blend the automation but but also with the ability to give users transparency and control to make the decision that they need to so a best practice is to use a hybrid model that utilizes a combination of Automation and guided meling to give you close to 100% magic supervised machine learning is sort of like a self-driving car you'll always need guidance from the person in the driver's seat even though I might say it's fully automated the hybrid solution removes any guest work and errors from your cash app process and in addition to helping you reduce the amount of manual work and disper processes that are historically associated with cash app so a hybrid model and that accuracy the guided modeling with the automation giving you more configur durable secure approach to applying payments cash application should also be a smart solution so it learns how to int excuse me how to intelligently read each customer's remittance statements and then applies payments automatically another best practice is that anyone on your team should be able to log in 247 365 from anywhere on the globe and teach the system how to handle exceptions a cash app process should also always be configurable and never Outsource to third parties finally ensure your data is secure organized and searchable so that you remain in control every single step of the way finally I want to touch on the the environment customer service for example is paranome to success in the B2B space uh in a study done by zenes they found that 62% of B2B customers purchased more at after a good customer service experience so these kind of great customer experiences rely on a 360 degree view of your customer relationships again going back to that theme and what this speaks to is the need for a full culture buyin to ensure success now I had mentioned a few conversations that we had spoken with and that saw success and who implemented some of these best practices with with great success and they're far from alone so I just wanted to show a handful of in organizations um that have taken the time to implement best practices and processes and have seen success with it and finally I just wanted to leave here with one last example in a quote um on the benefits of implementing you know best of breed invoice to cash best practices and with that if uh Gary if we have any questions I'm happy to speak uh to them okay hang tight um first of all if anybody uh wants to participate you now I'll I'll be looking for that I don't see any questions right now Tom I just give it a minute here and see if anybody uh weighs in with anything okay great Tom how many do you have any idea of how many um customer in for customers Bill trust has right now I don't know the number off the top of my head but it is a significant portion of the uh customer base that we do have uh yeah and I would agree I you know in my last conversation with Tom Scott he he indicated that um you know it's easily over a hundred so oh it it is well over a 100 um for sure okay Tom I'm not seeing any questions coming in so I guess we can wrap it up all right well I thank everybody for joining us today uh Gary thanks for having us and hopefully we'll uh we'll see you soon okay absolutely everybody have a great day thank you thank you