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A leading cloud-based software company struggled to achieve the desired efficiencies and scale needed to support consistent growth in terms of accounts payable (AP) and accounts receivable (AR) functions from its facilities in South America and Central Europe. The prior IT service providers’ collections data was consistently in the low range of 60% based on its historical records. As a result, the company was forced to pursue other options to improve cash flow and reduce the aging of outstanding receivables in conjunction with standardization across geographies.
The company reached out to Cognizant—their tried-and-tested strategic partner of seven years—to help them achieve the 70% collections goal.
As a first step, we conducted an audit of the aging receivables report and performed a detailed analysis of the baseline. We redesigned the end-to-end AR process by establishing standard operating procedures (SOPs) for collections and billing agents. This helped agents identify their goals and achieve measurable targets, consequently improving efficiency and outcomes. Simultaneously, our data scientists analyzed customer payment patterns, which drove our collections approach, touchpoints and timeline. They identified that 30% of customers pay after a reminder call, so our agents called immediately after the due date and achieved quicker payments. Our experienced Cognizant team worked closely with agents to understand and address their challenges. We leveraged the company’s own global CRM platform to mirror the processes between the company and its customers. Cognizant also streamlined the company’s operations and call center to reduce language barriers and service disruptions as well as acquire highly skilled resources.
Cognizant not only accepted the challenge but also achieved the 70% target collections goal in a record time span of six months. Our efforts, in collaboration with the support of our client's leaders and agents helped the global software leader achieve more than $200 million in additional cash flow as well as save costs of approximately $2 million in the first 18 months. The company's aging invoices were reduced to less than 1% with a 10% improvement in productivity within the first year itself. We have also bagged the client's approval for a future project that will be handled by our robotics process automation team.
collections goal target achieved in just 6 months
improvement in productivity in the first year
additional cash flow
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