Get The Biggest Bang For Your Buck on your A/R Transformation Project

George Uko

George Uko

Manager, Credit and Collections
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George has 30 plus years of expeience in Accounts Receivable, Collection, Fraud, Underwriting, and Customer Service. He focuses on using automation to drive results and has implemented both fraud solutions along with credit solutions.

Session Summary:

Takeaway 1:
Big question for Staples.
Key Points
  • How would we know if our transformation project is successful?
  • What if our digital transformation project failed?
Takeaway 2:
Addressing the challenges in Digital transformation
Key Points
  • Giving people the right amount of training.
  • Helping people to adopt the procedure by showing the case studies which other companies have done already.
  • As far as automation, it’s not there to basically replace what they do, it’s there to help what they do.
  • Taking feedback and implementing it for long term successes.
Takeaway 3:
The impact automation brought in
Key Points
  • There was a 27% reduction in the past dues.
  • There was a total of 8% reduction in the 60+ days aging bucket.
  • There were 5-6 days of reduction in DSO
Heather King

All right, we are going to jump right into our next session, so we don’t miss a beat. Remember poll questions, which we’re going to have in just a minute, and all that good stuff that you’ve already heard from me three or four times. So we had a great keynote session. And we’re gonna jump right into it and it’s a case study, which is to get the biggest bang for your buck on your AR transformation projects. And our fabulous speaker who is making his way down the out at the moment is

George Uko

. He’s the credit and A/R manager for staples, promotional products, who takes care of credit collections, cash application, and fraud prevention at Staples, promotional products. He has over 30 plus years of industry experience and specializes in strategic planning, vendor relations and project management within the A/R department. So without any further ado, George.

George Uko

Thank you, I want to start off just so everybody understands, I’m not part of the staples stores. I’m part of staples, promotional products. So anyone that has a shirt with an inBloom, maybe pens, paper, you name it, that’s the staples, promotional products. So what I want to do is give you an overview. We have been on HighRadius for the last four years, I’ve been part of this process since the beginning. So I want to share some tidbits that will kind of help and definitely get you going if you’re new to HighRadius, just to know what it’s about. So, hold on a second here, I don’t think this is the right one. Here we go. Just to give you a little background about staples, promotional products, we are based in Overland Park, Kansas. So some of you know Kansas City, where one of the suburbs has been around since about 1946. We have as far as our city where we have as far as our warehouse and our manufacturing, we have a sales office in St. Louis, the main part is Overland Park. So a couple of things to think about. And this is really where we put some of our focus, we wanted to come in, we wanted to see what we can do to get the biggest bang for the buck. With as far as automation, especially with HighRadius, it helps as far as take us to that next level. So a couple of things to think about, we wanted to come up with an ROI. Part of our ROI was to reduce staff. So just like us, just like many of you that are out there, it does cost for the system, but what you’re gonna find is those savings will come through automation. One thing, one of our big goals was by our CFO, they were looking for us to reduce our bad debt by 20%. So if you think about that, that seems like a high number. But in the end, once we got our automation going, once we’ve fine-tuned as far as what we’re looking to do, it was very obtainable. But I think to take a step back, the big thing you have to understand is you want to understand your system fully in order to keep moving because there’s a lot that you can do, but you have to understand your existing system. So we do have a poll question. The poll question is, are you currently undergoing a digital transformation within as far as your A/R department? So go ahead, go as far as the session, take as far as that poll? And we could come back to that with as far as the answer.

Okay, so we had two big questions that we were focused on. The first one here is how would we know if the transformation was successful. So keep in mind with the transformation, it took literally about six to seven months to go through as far as the full process. One of these just depends on how many modules you implement. When we went about our process, we implemented three modules simultaneously. So we started with the collections module, got our collectors going, the data flowing into the collections. From there, we went into the EIPP for our customers. One of the big things we were looking for is for our customers to have the ability to go in and make payments. So EIPP was crucial for us to do. And then our last one was the cash application. So the cash application module, if you’re not aware of it, will actually post as far as the payments. So when the payments come in from your customer, they will go in and automatically post. One big thing I want to point out but The three modules, they all talk. So because they talk, it really helps as far as the whole process. So that is one big thing that we were looking for in one big thing that we’re trying to drive with this automation. Now, you could kind of turn the corner here and say, Well, what happens if the transformation fails? Well, a couple of things could happen if it failed, not all our systems would be talking, which caused us as far as more manual work, the whole part of the process was to get everything flowing together in some automation. So I’m going to go through the next couple of slides, we’ll take this step by step here.

So one of the first things that we focused on and this was a big one for us is we looked at our real-time to see what is going on. Prior to HighRadius, we had to manually track. And I hate to say this, we are on an AS 400 system. So some of you may be on an AS 400 system also. So it made it hard to track all that information. Once we came into HighRadius, all of a sudden, we could track as far as the information, that reporting was great, we’re able to give as far as the feedback, we’re able to see it in real-time. So that alone was a huge win for our organization. Another thing we looked at is looking for an ROI compared to other companies. Our company is a little different based on the way our customer base is. But what we were looking for, for example, like our cash application, we were looking for 80% automation, our EIPP we were looking for probably about 40 to 50% of our users to use it. And then for our collections, we set our standard, anything 60 Plus, we want it less than 10%. Anything overall past do we want at less than 30%, this is something you’re going to have to figure out for yourself as far as business. So what may work for us or are different standards may be different for you. But once again, think of what’s the best way to measure this. And it’s hard because going through the change, it takes a while to bring everything up.

Now, one of the things to focus on, and this is the big thing you want to focus on, is that it’s hard, sometimes it changes. So I know some of the previous presentations, you know, one of the big things is change, you have to get everybody involved, you need to get all different levels involved. So for example, in our group, I actually present it to all our sales groups. So it was about three or 400 of our sales group. Now the hard part with that is getting them to understand how this is going to help. At first, they thought we’re just going to shut everybody down, and they’re not going to make their cells. So we had to get them involved, we had to keep everybody up to date with what was happening. And we really need to take input away as far as the different fears, that were some fears because it’s changed. And we had to deal with that change.

So here’s a couple of things, to think about four different things to think about for as far as poor end-user adoption. So one of the first things to think about, can all your user’s use as far as the system. So with HighRadius, as we were adopting it, as we were setting it up, we started with a test number of analysts, they would test it, we made sure we checked it over and over and over again before we rolled it out to the whole team. One thing that we will do point number two, you will have people that are going to be resistant to the change. So what we did is we got them involved with as far as the change. So it was a huge win because they had a chance to put in their two cents and we in turn were able to modify some of the things we were doing, and then get their buy-in. So it was a big thing to do. But if you could get them involved that will help with the transformation. Number three, we all know automation. And automation could be good. Automation could be bad. But the big thing we have to think of with automation. Yes, it’s to make us better at what we do. We’re looking to go in, we’re looking to make everything better. But number three really is something where people have a hard time leaving because at first, they’re all afraid that they are going to lose their jobs. And we had to break that fear and just let them know this is to help them. So as we got them involved Once again, they understood, and once they saw some of the features that it had, it really made their job easier. Number four, Solution is not doing what your team wants to do. Okay, this gets back to change management, we have to let them know what the purpose of the software is. So we had to go in, we had to modify, we had to change some of our procedures, some of our processes, as we adapted High Radius into as far as our system, we updated our processes. So number four, we had to go back in and retrain, and come back and say, This is what we did before. This is what we’re going to do now. So it was interesting, and that itself was a hard one to get people to understand. Once again, we’re making this easier, don’t resist the change. So that was a big one.

Now, a couple of things that we can do to help get through this change. The first one here, give training. And like I said, before, we kept everybody involved, we had several of the reps like our seniors involved from start to finish. They knew the process, they knew the day to day. So we kept them involved to kind of help sell the solution to the rest of the team. So as we kept them involved, they were kind of the voice to help the voice across the team. Number two, as far as navigating as far as to change, once again, Show – Tell what we’re going to do, let them know why we’re making the change. One thing that we tried to do was show case-studies what other companies have done. We have so many companies here today that are in different fields. But in a sense, we’re all doing the same thing we’re out there to collect. So what we tried to do with number two is navigate through the change, but share the best practices. And that really helped with as far as this. Number three, as far as the automation, it’s not there to basically replace what they do, it’s there to help what they do. So a perfect example of this, we send out letters before we used to do all our letters manually, I’m sure some of you are still out there that do letters manually. Well, all of a sudden, we took that put it through HighRadius, and now everything is scheduled through the system, we don’t have to send out the letters manually. So that was a big win. And that was something, once again, we tried to tell them, this will take one piece of your job away. But this will enable you to do something else. So that in itself was a big one. And number four, feedback, that is a big one, as we were going through our transformation, we would have weekly meetings, we kept asking for feedback over and over and over again, kind of got to a point where they didn’t want to give feedback. But ask for as far as the feedback, your transformation is ongoing, it doesn’t just stop once you have it implemented. So continually ask for as far as that feedback.

As far as training, training is the sale for this we want as far as the best training. So think of what we could do. As far as the different training, we reached out to HighRadius, and we had as far as on-site, they came in and we had our training, we worked directly with them, we had our own trainer, work with them with IT, we kept everybody involved. So that kind of helped as far as everybody took on as far as the new processes. So once again, get that understanding that really helps. If you’re going in setting everything up, you’re going with HighRadius point number two, have somebody to go in and lead as far as that project, or project manager should be someone that’s neutral. Some of that could balance as far as the It, not only with HighRadius but internally with your A/R team. So you need someone to drive as far as that project while you’re managing the day to day operations. And number three, we want as far as the different queries, the different questions, we want them resolved, we want them addressed. That is a big thing. If you want the buy-in from your group, you have to respond and do that in a quick manner.

Now something else here, think about as far as the change, just like it states right there. 62% of the respondents are uncomfortable leaving as far as their comfort zone. This has changed. So we need to work with them to go through as far as this change, to make it easier for them. So I think number one is the big one here, have them understand, what is the automation going to do? How is that going to help solve some of the challenges? You know, one of the big things with my particular group, they didn’t like the fact that the system was going to send the letters, so I had to change the mindset. The mindset should be this, let the system send the letters, you answer the phone, you respond to the emails, we want the customer interaction, and that’s a big one right there. Number two, explain the difference. What is the difference between the old system and our old processes compared to our new system? So we want to share what was the process before what is our new process. So that was a big one, once again, because we went in and we could show, hey, you now have another three or four hours free, that you could devote to doing something else. So you could go in, excuse me and take your time, you know, digging into something else, that is a big one. And then number three, the change, it’s still evolving, we need to keep focused on as far as the change. So that is, once again, even today, we’ve been in the system for four years now. We’re continually making changes, we’re continually keeping the team up to date. And one of the big things with as far as the team, we want to take as far as the request and keep making this system better. So that’s a big one.

Next one here, automation. We’ve heard about it over and over today in different presentations. It’s an enabler, it’s going to make things better, not a replacement for their particular jobs. So once again, what can they do with that extra time by putting the automation into place? What are some of the different success metrics? And then the other thing, what can we do with some of our different resources, what we are able to do is take some of our resources and re-sign them. So that in itself was a huge win to our department because we’re able to dig into different things where in the past, we weren’t able to do that.

So here are some different things to think about from a long term perspective. So one of the first ones once again, just like we’ve said, over and over good, take the feedback over and over again, that’s a big thing, that should always be an ongoing thing. Keep as far as the team involved in some of the different conversations. So with the different changes, if it’s the idea, give them credit for the idea. And once again, keep moving on. And then the other thing on some of the different requests, take it to HighRadius, we would like this, we would like this, tell him what you want. And I could tell you a big story with this based on some of our requests, it’s made the team extremely happy. The reason it’s made him happy is that it makes their job easier. So once again, Number three’s the big one.

So I want to share the screen here real quick. This one is with third-party integration. So I don’t know if everybody is aware of this, but you can actually have accounts go directly to the collection agency. So today, I know Altus are on site. They’re one of the collection agencies. So you could go in here, and you can literally click on one of these accounts. And let me hit my next screen here. If you can notice up here, see where it says transfer to TPA. That’s the collection agency. So the plus with this is you don’t have to manually go in and fill out the forms, do the manual paperwork, the collection agency will get all the information, all the different notes on the account. So this is a huge feature, I would strongly recommend it if you could get this set up. We’ve been using this feature for the last three years. It’s helped with our collections. The reason it’s helped is once we transfer it, they actually start calling that same day. So there are certain accounts where we hit a roadblock, and we’re looking to get those over sooner than later.

Here’s a couple of other things here. We knew what we wanted to make our collections successful. We did. And today we are so once again this is an ongoing journey. We had dinner last night with one of the HighRadius VP then one of the things we stated is we’ve been under your system now for four years. Let’s fine-tune it. Things have changed and always changes So we’re going to go in and make some changes, and all in the good, and it’ll help drive down our ROI.

So a couple of results, I’m just kind of rushing here because of time, but a couple of results here that we achieved, we reduced as far as our past due by 27%. Once again, this didn’t happen overnight. This is overtime, we’ve reduced our 60 Plus buckets. That’s one of the measures we used internally by 8%. And then, as far as our DSO, we’re all measured on DSL. So by using HighRadius, it’s all going to tie in here, not only you’re going to reduce some of your numbers, you’re going to reduce the DSO and that is one of the main things you’re focused on.

Any questions? Sorry, if I rushed here. But I will just share, it’s been a great program, we’ve had a lot of success with it. And once again, our employees love it. And our customers, we now have links on our letters where customers could go in and just click on a link, make a payment, they don’t have to sign up for EIPP, they could do a one-time payment that goes out on the statement on the invoices. So it’s been a huge success in that we’ve got a lot of our vendors to go in, and not only vendors but customers to go and make payments on EIPP. So it’s been a huge saving, both on time and money for us.

Heather King

Does anyone have any questions? For the fabulous, George.

George Uko

Thank you.

Heather King

I’m going to start Jeopardy. Oh, okay.

Audience-1

You mentioned that when you were doing the auto application, your goal was to reach 80%

George Uko

Correct

Audience-1

What would you say were some of the factors that you had to kind of overcome or change to the kind of get the percentage higher? Was it more on streamlining the remittances or working with your clients or a combination of both?

George Uko

Mainly working with the clients. What we’re finding is with some of the clients, they know the process we’re using, but their system, they don’t want to change 100% to meet what we’re looking for. But what we’ve done is put different rules in for some of those clients. So what we’ve done is we could also focus on the payments that we have to manually apply. So to answer your questions on some of our bigger customers, the system will actually tell you for this one particular customer, let’s just pick on IBM. So for IBM, we had, let’s say 40 payments that we had to manually apply, then we go after that particular customer and see if there’s something we could do to help change that. But the hard part to answer your question is that it’s kind of a one-off with a particular customer. So that’s another thing that we’ve run into some of the AP departments have their process in, it’s trying to work through that change.

Heather King

Any other questions for George?

George Uko

What deductions? Yes.

We reduced our headcount by about three people. And one of the things my group doesn’t realize is as the business was growing, we didn’t add people.
The other story if I gotta say one other thing to kind of add to your question here, my analyst at one time had about 700 accounts, each with active balances, we’re down to 250 apiece. So because of that, they have more time to dig in. And in the past, we didn’t have time to go back to our sales and say, Hey, you did this wrong, this and that. So I have kind of a famous thing with my team. We’re going from defence to offence. So now we have more time to dig in. And as we have more time to dig in, we’re preventing stuff on the front end.

Heather King

Hi, we still have time for two more questions. Or people are desperate to eat.
doo doo doo doo Jeopardy, two, two points. $200, whatever, whatever it is. I haven’t seen Jeopardy in a while. All right, well, I’m not gonna force anyone to ask a question. Let’s give George a big round of applause, everybody. Thank you.

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