Business Process Reengineering

We enhanced productivities for a shipping and Logistic company by streamlining their AR collection process.

This case study outlines how we helped a global client who is world’s leading suppliers of forwarding and logistics services, specializing in end-to-end supply chain management solutions and intercontinental air freight and ocean freight shipments, headquartered in US. Their team in the Andean region had a challenge managing their accounts receivables. Although they had dedicated team for AR collections, they did not have proper process to effectively utilize their resources and realize payments. They had increasing aging of invoices, number of disputes unresolved, etc.

A BPR activity was initiated onsite with CFO, credit collectors and their managers, IT team and SAP system owners for couple of weeks to understand their current process.

Client had SAP as their ERP through which the invoices and payments were managed but it was not integrated with their collection process. Due to this collectors had difficulty in identifying unpaid invoices or invoices that are due for follow up. Following up on pending invoices and sending reminders was done manually by the Collectors. Credit collection managers had no real time visibility on the status of the collection process as the collection process was arbitrary and not based on aging, multiple invoices pending for client.

As mentioned above the other challenge they had was managing the disputed Invoices. Disputes were recorded in emails and exchanged internally. It was very difficult to know the current status of the disputed invoices and once the dispute is resolved it was difficult to find out how it got resolved.

  • Based on the above challenges we set the objectives of the BPR initiative to be
  • Optimal usage of collectors and improving their productivity
  • Improved planning and follow up
  • Visibility on aging invoices and prioritizing activity accordingly
  • Inform customers periodically based on aging of invoices
  • Improve Dispute recording and resolution
  • Performance metrics to assess collectors

Subsequent to the completion of as-is analysis following areas were identified which required new processes to be defined

  • Processing invoices from SAP, identifying aging invoices and reconciliation
  • Process for Prioritizing invoices/customers to be followed
  • Task assignment, Collectors activities, follow up and recording outcomes
  • Dispute management and resolution process
  • Sending automatic reminder emails to customers based on the aging of invoices.
  • Credit management process
  • Check pickup process

Each of the above process areas were discussed in detail with the BPR team members and new processes were defined for each specific area. For example to process and reconcile invoices from SAP we understood the data formats, integrated with SAP to receive data every day and setup a daily processing schedule.

After the new processes were defined the required software components required were and developed. A comprehensive credit collection system was developed with following salient features

  • Provide managers and collectors the ability to monitor and track invoices. Managers were able to assign specific invoices that collectors would follow up in a day.
  • Perform follow up activities with customers when invoices are pending beyond due date or if there are any disputes related to invoices
  • Integration with SAP to pull all the invoice information into the software.
  • Provide collectors ability to attach call notes, purpose, follow up date, time for activities.
  • Monitor ageing invoices.
  • Automatically send email reminders to customers regarding overdue invoices based on age of the invoice.
  • Automatically track the email interaction with the customer and relate it to the case by Integrating with Microsoft Exchange Web services.
  • Provide robust filter for ad-hoc queries.
  • Manage and present the history of all activities related to invoices. Dispute management to track all the disputes to closure.
  • Manage check pickups.
  • Manage hierarchical organizations, roles.
  • Develop pre-defined reports / layouts.

Once the new process and the related software was in place

  • Managers were able to measure the productivity and know exactly who is doing what.
  • Managers had more time so they were also able to do collection activity.
  • Team was no longer centralized. They were able to utilize collection resources in different countries.
  • Management was able to track the aging invoice counts by various duration.
  • Improvement in A/R aging was seen.
  • All the conversation with the customer was recorded at once place. Email communication by collector to customer was from the system.
  • Dispute management became efficient and management knew exactly with which customers the disputes were there.


Number of customers followed up in a day increased by more than


Invoice collections increased

A/R aging >90 days – decreased

A/R aging >Time spent on dispute resolution – decreased

A/R aging >Time spent on identifying invoices for follow-up and reconciliation – decreased