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Experiences in Implementing a Global Cash Application Solution

Introduction

Implementing any solution on a global basis can be a challenge, and cash application is no exception.  Addressing such complex issues as multiple currencies, language barriers, a variety of government regulations, and customers with a large number of diverse locations can extremely difficult.  However, the benefits and synergies achieved if this model is properly implemented can be significant, making it worth taking on the many implementation challenges, including a number customer facing issues.

Company Experience

Recently, the Senior Finance Manager over Order-to-Cash at major consumer products company was featured as the presenter on a Peeriosity PeercastTM.  With cash application locations spread across 18 countries across the globe, the company was facing a number of challenges, including the following:

  • More than 12 different banks for receiving funds across 18 countries
  • Multiple methods of receipt based on country specifics, EFT was close to 45%
  • Other than EFT, modes of remittance were primarily performed using e-mails and downloads from websites
  • Thought EFT was a major contributor, all countries did not have Lockbox functionality to integrate remittances and use emails and portals for remittance copies and information

The project team that was formed completed a global scoping effort in which they analyzed country-specific remittances and data secured from banks.  They found that the United States had a very standard method of capturing remittance information and references, with a 70% straight-through conversion rate.  Canada had dependencies on banks for specific format requirements which needed support from these institutions, and Europe had 25% of remittances capturing reference information, but it was incomplete or in the wrong field in SAP, which required efforts working with banks and customers.  The country-specific exceptions were listed and resolved also with the banks and customers.

Some of the results from this standardization effort included the following:

  • Having a single standard solution across geographies
  • Leveraging best practices in manual areas as the base process is standard
  • Improved cash application quality application and turnaround
  • Customers delighted with accurate application and more time spent on research for deduction management from team
  • Faster and more accurate payment application enabling collection teams to focus less time on researching unapplied cash

Additional details regarding this initiative can be found on the Peeriosity member website.

iPollingTM Results Review

The results from a recent Peeriosity poll developed using the iPollingTM technology provide some interesting detail surrounding company practices related to the application of customer payments.  The first question looked at the geographic scope of the cash application solution, with the global design being the most popular with 46% of the responses.  This was followed by the multi-regional design (13%), single region with 7%, multi-country with 21%, and single country with 13%.

The second question then addressed the status of implementing a global cash application solution.  Looking at the results, 29% have implemented and another 9% have approved doing so.  An additional 29% are currently evaluating this approach, while 25% have not yet evaluated this design.

The following are some of the poll comments made by Peeriosity members:

Healthcare, Pharmaceuticals, Biotech Member: We have standardized global cash application logic in SAP covering all the regions.

Manufacturing Member: We have implemented for the entities on our ERP (SAP) system only.

Healthcare, Pharmaceuticals, Biotech Member: We are in the early stages of evaluating this opportunity.

Closing Summary

There are significant benefits to be realized when a company is able to implement a global cash application solution.  While the path to implementation may be filled with a variety of challenges, the ultimate realization of the benefits from this type of design easily out-weigh the difficult situations that may be faced in this type of transition.

What is the status at your company in utilizing a global cash application solution?  Is your current solution meeting your needs or is it time to take another look at this important aspect of your Order-to-Cash operation?

Who are your peers and how are you collaborating with them?

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“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPollingTM.

Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers.   Membership is for practitioners only, with no consultants or vendors permitted.  To learn more about Peeriosity, click here.



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