What does a good collections automation system need in order to achieve optimal revenue collection and empower AR to generate revenue opportunities?
A “gold-standard” system for collections automation relies on three principles to perform its function:
1. Central Data Storage
A working option must store and access all data within your ERP environment’s own file structure. This is the only way to ensure all financial data remains coherent and centralized within a single source of truth that requires no external reference points for any part of your O2C workflow.
This allows users to have access to all agreements, documents and files related to individual customer cases, and empowers them manage and upload all related documents into the system.
It’s important as you search for the right solution for your organization to pay close attention to integration capabilities. The best solutions on the market generally come with pre-built integrations for major ERP providers like Oracle (the makers of NetSuite), Microsoft (Dynamics 365), and SAP (ECC and S/4HANA). Vendors will also be able to advise you on the implementation prep-work you’ll need to do in order to make the most of their solution from issues like data cleaning and preparation to training and ongoing support for your teams across both AR and collections and your internal IT resource.
2. Intelligent and flexible automation
Automation creates the most value when your collections operators no longer have to spend time finding dates, checking if payments have been received before taking real action, researching individual case information, or setting up reminders to send reminders.
Instead, the system does it all for them. With this level of automation, teams merely need to adjust due dates if needed, and possibly add fees. It is also possible to automatically escalate cases to different account managers depending on the severity of the debt and set thresholds.
You’ve probably noticed that we haven’t mentioned “AI” yet. That’s because there’s multiple types of AI, and those different types have very different roles and capabilities when applied to collections.
Keeping it simple, there’s two basic types of AI: predictive and prescriptive AI, which makes assessments based on large numbers of previous occurrences in large datasets and generates recommendations for your next steps on that basis, and generative AI, which transforms data into other forms based on your instruction (usually a natural language prompt).
State of the art collections automation uses both of these.
Predictive and prescriptive AI is very good at spotting patterns in customer behaviour, and can both flag likely defaults before they happen and suggest remediation based on what’s worked previously in similar cases. It can also provide collections operators with policy-compliant payment plan terms based on relative risk profiles tailored to individual customer track records and local market laws, cultural preferences, and realities.
Generative AI can help with the drafting of communications, and with matching unstructured data from emails, different invoice formats, and phone records to structured database entries. This allows specifically tasked agents to do things like alert your teams to incoming payments that match outstanding invoices (so cases can be closed faster), scan accounts against AR records for “missing” payments to make meeting reminder schedules simpler, and to ensure visibility stays up to date across the whole O2C team for every open case.
3. Global standards and governance frameworks
Collection managers cannot start from square one each time they encounter an overdue account. Mature automation solutions let your AR teams build a set of global standards that derived from collection best practices. With these standards in place, a given collections specialists can choose from and apply the method that’s most likely to be effective in any particular case. They then execute them within your organization’s regular operating environment – ensuring policies and processes are followed, data remains centralized, and every action is tracked and recorded for compliance and internal review.
What’s more, a practical set of different collection strategies within a centralized system makes it possible for debt collection in local markets to operate with a remarkable degree of freedom and flexibility based on local payment cultures and communications expectations. Local collections can even be executed from global shared services centers – provided there’s an understanding of what methods will be most effective in what markets.
Starting with compliance and governance in mind also provides a robust structure within which to trial and deploy agentic AI workflows. AI agents work best when they’re assigned to specific tasks with legible outputs and their chain of reasoning can be easily audited to verify the accuracy of decisions and actions. Any automation solution that incorporates them needs this degree of transparency and governance, in exactly the same way that your human employees can work at their best within an easily understood and simply enforced policy framework.
Who are we to be promising you all this?
Serrala’s AI-powered automation solutions are trusted by over 2,000 world-leading brands to achieve automation rates of up to 99% in their AR processes. Eliminating as much as 85% of manual effort from many of their most important accounting functions, and saving weeks’ worth of time across not just their AR teams, but their wider order-to-cash process. Giving them access to improved working capital accelerates key strategic investments and decisions.
Our solutions are fully integrated with your current SAP environment (S/4HANA or previous systems like ECC) and embedded in SAP as an augmentation of SAP order management solutions, which means you can post and update data in SAP in real-time. Providing a single, unified O2C system that leverages your SAP investment and maximizes your working capital to power your organizational success.
Sound too good to be true? Serrala offers solutions that make it possible in any deployment
We’re committed to creating solutions that meet financial operations needs at every level of your business and help you optimize your overall working capital position.
Serrala’s collections solutions are deployable as standalone on-prem, hybrid, and cloud-native solutions with pre-built integrations for all major ERP platforms, and as fully embedded extensions of SAP ECC and S/4HANA. Making use of your organization’s existing finance, customer, and AR master data to provide smart automation for every part of the collections process.
You can get in touch with us at any time to demo our solutions for yourself and ask us any questions you might have about your organization’s specific challenges and needs in credit management and any part of the AR and O2C workflow. Drop us a note at [an email address can go here], visit [a link to book a demo], or call us on [an appropriate phone number] to get started.
