6 Steps—Including Automation—to Rein In Unauthorized Deductions
Imagine being told your AR department could achieve savings in deduction processing costs like the following:
- 50 percent reduction in overall cash application costs with an increase in auto-match hit rates;
- 40 percent increase in speed of deduction processing; and
- 50 percent to 75 percent reduction in time required to manually retrieve documents and attach them to specific deduction records.
Sound like a fantasy? However, those are exactly the opportunities presented as entirely realizable at a recent AR&O2C Network webinar, “Improve Profitability By Reducing and Controlling Deductions.”
“Since deductions can account for up to 10 percent of sales and processing costs can run between $200 and $300 per deduction,” asked webinar presenter Jessica Butler Butler, Principal at Attain Consulting (http://attainconsultinggroup.com), “why don’t more companies focus on reducing unauthorized deduction and processing costs?”
Because, she answered, of common obstacles like the following:
- Management lack of awareness of “total cost” of deductions;
- Challenge of cross-functional coordination between departments “touched” by the issue (AR, sales, customer service, IT, compliance, warehouse, production).
- ERP systems that lack deductions functionality, and ...