Reduce Dispute Resolution Cycle Time with Intelligent OCR
All corporations are faced with some level of receivable dispute management. For many companies, managing and quantifying deductions, disputes, chargebacks and claims is difficult. The associated data is often poorly organized and may reference distributed documents, spreadsheets and contracts. Often, there is no system in place to automatically identify and route disputed invoices for timely review and processing. Disputed invoices are a major cause of increased DSO and cash flow uncertainty, which leads to significant additional costs and can have a negative impact on customer relationships.
Given that after 90 days, most disputes often remain uncollectable, beginning the dispute workflow process as fast as possible is extremely important. The majority of disputes are identified during the cash application process. Generally, a customer will short pay an invoice or indicate that they are disputing a particular invoice on their remittance advice. A best practice is for companies to encourage the customer to pay the non-disputed portion, which aids in reducing DSO. In a manual environment, resources are assigned to reduce the backlog of cash application in an attempt to get ahead of the curve. This is a short-term and costly solution that is predisposed to errors.
With an automated Cash Application solution featuring intelligent Optical Character Recognition (OCR), you significantly improve the dispute resolution cycle time by speeding up the cash application process. The OCR tool automatically identifies, reads and digitizes the remittance information, removing keying errors and eliminating the time-consuming, manual application process. Disputes are identified quickly and when combined with an integrated dispute resolution workflow in a specialized credit and collections automation solution, are automatically created and routed via configurable business rules. Having a Cash Application process that applies the non-disputed amount and then automatically engages the appropriate dispute owner, cuts down on the manual effort involved in dealing with disputed invoices. Automated follow-up emails are established at predefined thresholds to serve as a reminder to the dispute owner of their assigned action items and escalate as necessary.
By simply integrating an automated Cash Application process featuring intelligent OCR, companies can leverage faster identification of disputes to improve overall efficiency and effectiveness across the order-to-cash cycle. A major benefit is the reduction of dispute resolution cycle time. Resources previously focused on cash application can be reassigned to value-added functions, such as root-cause analysis and dispute prevention measures.