Accounting
Resolving Order-to-Cash & Accounts Receivable Challenges in the Food Sector
Effective Order-to-Cash management is essential for CPG companies operating in complex retail environments. Weak invoicing, deductions, and cash application processes can quickly strain liquidity and margins. This case study shows how a growing food sector company restored AR control through structured process discipline, improving cash flow visibility and retailer relationships without new system investment.
The Challenge: Order-to-Cash Breakdown and Accounts Receivable Inefficiencies
A growing food sector company supplying major retailers was experiencing revenue growth but weak Order-to-Cash discipline. Sales orders were inconsistently entered, shipment confirmations from 3PLs were delayed, invoicing errors were common, and cash applications lagged.
Deduction balances were stranded in aging reports, chargebacks were not systematically investigated, and reporting lacked forward visibility. Liquidity was impacted, and retailer relationships were strained.
Key challenges included:
- Delayed and inaccurate sales order entry
- Late or unvalidated invoicing
- Duplicate invoices and incomplete ERP vs EDI reconciliation
- Deductions buried in AR aging
- Delayed cash application
- Weak AR visibility and reporting
- Inadequate follow-up on short pays and chargebacks
- Limited access to retailer portals
With an ERP transition planned the following year, the company needed process control without major automation investment.
Industry
CPG
Company Size
$80 million
Location
New York & Connecticut, U.S.
Date
May 2021- Ongoing
Sign Up To Cut Accounting Costs by 60%
The Goal: Restore Control and Improve Cash Flow
The client required a disciplined, CPG-focused AR framework to:
- Improve invoice accuracy and speed
- Accelerate cash application
- Increase deduction recoveries
- Strengthen liquidity visibility
- Prepare for ERP implementation
The Solution: Structured AR Discipline Without System Replacement
Expertise Accelerated implemented best practices across the Order-to-Cash cycle while respecting the client’s decision to defer automation.
Sales Orders
- Processed within 24 hours
- SKU and discount validation checks introduced
Invoicing
- 3PL shipment validation prior to billing
- Invoices issued within 24 hours of shipment
- ERP vs EDI reconciliation initiated
- Weekly duplicate invoice review implemented
Cash Application
- Cash applied within 24 hours
- Discounts verified
- Chargebacks booked separately for investigation
Chargeback & AR Management
- Systematic investigation using contracts, promotion calendars, and documentation
- Claims filed for unauthorized deductions
- Deductions separated from trade AR balances
- Weekly backward- and forward-looking AR reports introduced
- Customer statements reconciled
- Retailer portal access secured
- Dedicated invoice and follow-up trackers implemented
Performance Snapshot
Inventory Accuracy Rate
12x
Annual Cost Savings
$900,000
Payroll Savings
60%
Inventory Accuracy Rate
>98%
Month-End Close
~50%
faster close
Lot Traceability
100% by item, location, lot code
Results: Stronger Liquidity and Recoveries
Within the first reporting cycles:
- Invoice delays and duplication declined significantly
- Cash application accelerated
- Chargeback recoveries improved
- Aging reports became more accurate and actionable
- Management gained clear forward visibility into AR liquidation
AR shifted from reactive cleanup to structured financial control, positioning the company for a smoother ERP transition and scalable growth.
Partner With Expertise Accelerated
We deliver specialized outsourcing and staff augmentation solutions in accounting, finance, and supply chain for CPG companies, helping brands stabilize cash flow, recover margin loss, and build scalable processes while reducing payroll costs.
Book a Free Consultation todayIn-house Payroll Cost Avoided
| Description | Amount |
|---|---|
| Accounts Receivable Senior Accountant | $120,000 |
| AR Specialists (3 FTE Order, Invoicing and Cash Application) | $255,000 |
| Chargeback Analyst (2 FTE) | $170,000 |
| Total | $545,000 |
Deduction & Chargeback Recovery Improvement
| Description | Amount |
|---|---|
| Unauthorized Chargeback Recoveries | $600,000 |
| Logistics Short Pay Recoveries | $120,000 |
| Total | $720,000 |
Working Capital & Process Efficiency Impact
| Description | Amount |
|---|---|
| Accelerated Cash Application (DSO Reduction) | Not Quantified |
| Invoice Accuracy / Dispute Reduction | $100,000 |
| Administrative Efficiency Gains | Not Quantified |
| Total | $100,000 |
| Ongoing Annual Savings | $1,365,000 |
Summary Financial Impact
| Description | Amount |
|---|---|
| Total Measurable Annual Benefit | $1,365,000 |
| Less: EA Annual Cost – 7 team members | $224,000 |
| Net Annual Savings | $1,141,000 |
| Return on Investment | 5.1 X |
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