Accounting
Resolving Accounts Receivable Challenges in the Food Sector
Our client in the food sector had several concerns such as:
– lack of timeliness and completeness in entering customer invoices,
-deduction balances stranded in AR aging reports,
-delayed follow-ups leading to recoveries, and
-inadequate visibility into expected AR liquidation.
Challenges
This is how our EA team solved their accounts payables challenges:
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Invoice Entry Issues: Lack of timeliness and completeness in entering customer invoices into the system.
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Deduction Balances Stranded in AR Aging Report: Deduction balances stranded in AR aging reports, making it difficult to identify and address deductions.
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Delayed Follow-ups and Recoveries: Inadequate or delayed follow-ups resulting in delayed recoveries.
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Delayed Cash Application: Delayed cash application adversely affecting liquidity.
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Weak Reporting Mechanism: Weak reporting mechanism providing inadequate visibility into expected AR liquidation.
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Inaccurate or Unreconciled Customer Statements: Inaccurate or unreconciled customer statements/balances.
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Limited Access to Customer Portals: Restricted or limited access to customer portal(s).
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Outstanding Issues Tracking: Outstanding issues not being duly and adequately tracked.
- Duplication of Invoices
Solutions
- Ensured prompt entry of invoices and conducted periodic reconciliations of company AR ledgers with customer statements to identify missing invoices and initiate necessary follow-ups.
- Identified deductions by separating them from AR balances within individual customer accounts.
- Established a rigorous follow-up schedule, closely monitoring effectiveness to ensure timely recoveries
- Recommended and assisted in the implementation of cash application within 24 hours of recovery, ensuring swift processing of funds.
- Created and implemented backward- and forward-looking visibility reports showing balances due within a time window of 2 weeks and beyond, issued weekly.
- Reconciled customer statements with company AR ledgers for customer subaccounts, ensuring accuracy and clarity.
- Obtained client approval and credentials for accessing customer portals, facilitating investigation of customer balances and setting up remote access where needed.
- Maintained an invoice tracker to follow up on pending invoices in the system, addressing issues like lack of approval or disputed balances.
- Created a mechanism for identifying duplicate invoices by running weekly invoice reports.
Results
Our client experienced a transformation in their AR processes, with improved timeliness, accuracy, and visibility.
The implementation of robust follow-up schedules, cash application procedures, and reporting mechanisms resulted in enhanced liquidity and minimized outstanding issues.
The client now enjoys streamlined AR operations, increased recoveries, and improved customer satisfaction.
Through analysis and strategic implementation, our team at Expertise Accelerated successfully addressed and resolved a multitude of Accounts Receivable challenges for our client.
The tailored solutions not only rectified existing issues but also established sustainable practices for efficient AR management. Our client now operates with confidence in their financial processes, focusing on business growth and customer relations.
We are your partners in growth through high-quality outsourcing and staff augmentation solutions in accounting and finance and supply chain roles in the CPG industry that saves payroll costs and delivers efficiencies.
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