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Accounts Receivable: Managing Invoice Collection and Customer Outreach
Background
A major, North American value-add reseller of barcoding and data collection solutions have enjoyed a great deal of success and seen their customer list grow to over 800 companies. The majority of their clientele being major global corporations and well-known household names. The company recently saw a change in senior management and an increased initiative to digitally transform and optimize their current operations.
Challenge
Despite the company’s impressive growth rate, the new management was concerned about an increasing balance of unpaid invoices and rising days sales outstanding (DSO). They did not have a formal collections process but, saw the need for one, and turned to OpenBots Process Automation to help execute the job.
Business Process In-Focus
Our client’s collections process was completely ad-hoc and manual. The procedure was demonstrated as-follows:
Periodically review the Accounts Receivable Aging Report
Identify customers with invoices over 30 days past due
Email customers with a request for payment and attach copies of their open invoices
The manual procedure was extremely time-consuming and repetitive. Each invoice had to be located in the accounting application, downloaded, renamed, and then attached to the appropriate email. This became very tedious and prone to error as some customers had as many as 150 open invoices. The client was also running into operational issues as not all of their customers had valid email addresses saved accurately to their database, requiring employees to hunt down the email’s individually as each issue arose.
This process was daunting as there were more than 800 customers to address and only one employee assigned to the task. This process was taking the employee more than their full time hours to get through the process just once a month and was also not that employee’s sole responsibility. Conclusively, it was not realistic to reach out to every delinquent account on a regular basis manually, so corners were cut and many customers were not receiving reminders about their unpaid invoices.
Why They Chose OpenBots?
Our primary contact in the client’s senior management was extremely tech-savvy and already knew a lot about RPA; She was confident that automation would be an important part of the solution to the collections problem. Unfortunately, the cost quotes she received for automated solutions using RPA software from the “Big 3” commercial RPA software vendors were too expensive and a non-starter for her main stake-holders. The proposals indicated that it would cost them over $80,000 in development and software licensing costs, just to create their first, pilot automation. That cost also did not include platform support which was a big issue at the time as they had no developers on-staff, so they needed support.
All-in, the first-year cost, with support, would have been around $95,000. And more alarming, the cost projections going forward with an automation program and scaling over the next few years was not something their organization was ready to tackle. The client intended on scaling RPA across their enterprise in order to unlock the intrinsic value and potential savings from efficiency, throughput, and productivity gains that come with by automation. They were disappointed as they feared they would not get approval for a large enough budget to meet their goals, and if they did, the benefits and savings would be significantly reduced by the high licensing costs and other fees associated with using one of the major commercial RPA platforms. (See direct comparison in Figure 1)
Fortunately, the client found OpenBots. After conducting a detailed, technical due-diligence and demo of the platform they were pleased with the feature-set, security, capabilities, and found that everything they wanted in the “Big 3” commercial platforms were a part of the OpenBots tools. The client ultimately chose OpenBots as their RPA platform due to excellent references, functionality, and the total cost of ownership as OpenBots is a completely no cost zero bot license platform. OpenBots also was able to offer, the level of development assistance and enterprise platform support they needed to launch, maintain, and scale their program.
Solution
We fully automated the monthly process of sending collection emails to every customer with invoices over 30 days past due. The automation kicks off on the same day each month and takes between 15 and 20 hours for the bot to complete the full task. Not only is the automated process significantly faster than a human in this case, but it can also run during non-working night hours to complete the process in 1 day. With the automated solution the client is also able to notify each and every customer with invoices overdue, not just the ones with the most invoices past due as there is no time constraint or need to cut corners.
- The bot identifies which clients need to receive an email, downloads all of their open invoices, generates a summary statement, and attaches the invoices and statement to the email.
- The bot formats the email and adds a pre-written message to the email body, gently requesting the customer for payment on the open invoices and instructions on how to pay
- The bot checks three separate places in the client’s accounting application for the customer’s email address and sends an alert email to the A/R team if none are found .
- The OpenBots team also added an “Elevated Review” feature so the client could maintain a list of important or special case customers to whom they do not want automated collection emails sent to until after a human employee reviewed the account or added a personalized note to the email. For these customers, the bot still completes all the same steps, it just sends the email to the A/R team first for review, instead of directly to the customer
