The Client:
A non-profit organization that works in the arena of peaceful resolution of conflicts.
Scope of Work
Complete support with:
- Accounts receivable
- Maintenance of general ledger and subsidiary ledgers
- Books closure
- Bank and credit card reconciliations
- Payroll journal maintenance
Process Bottlenecks
The client’s operations ailed from ineffective processes of assigning lost or ignored claims, absence of process documentation for handling denials, payment applications inefficiency leading to the following:
- $ 0.50 Mn in ignored claims
- Denials pegged at 9% as against the industry rate of 2%
- Underpayment or partially paid claims to the tune of $ 2 Mn outstanding from last 2 years impacting cash inflow
- Significant unapplied cash leading to collection issues
Cogneesol’s Optimization Solution
Our team of accounting experts undertook thorough due diligence to identify process inefficiencies, reduce denials, and catch potential denials before filing. Their in-depth study led to the following:
- Restructuring and redesigning of underpayments process, and the assigning of a dedicated resource to track and recover payments
- Tracking lost and ignored claims in an automated worksheet clearly identifying responsibilities
- Liaising with a provider to retrieve electronic remittance advice messages (ERAs) for untraceable payments
- Building of end-to-end process documentation
The clean-up of our payments process has put our house in order. We feel very confident to increase our scope and scale, thanks to Cogneesol’s complete help with the accounting. It’s a relief to be compliant again!
Impact Delivered
The concerted efforts driven by the Cogneesol team with the guidance of the client’s accounting team led to the following benefits:
- Improved denial rate from 9% (worth 1.4Mn) to 1.5%; reduced ‘Missing Information’ denial from 25% to 0.05%; eliminated duplicate claims from 18% to nil
- 95% collection of ‘Lost and Ignored’ claims within 45 days
- DSO reduced for partially paid claims from over 360 days to 45 days with an 80% debt collection rate
- 100% accuracy and timeliness of cash applications
Client Testimonials
It is always a pleasure to learn that the work we do has positively impacted our clients and that they are happy to share their experiences.
Cogneesol increased our operational efficiency with timely payments and efficient management of our working capital. We are impressed with the dedication of the team and their professionalism. Most importantly, the team is professionally qualified and has the technical expertise to guide the accurate and compliant management of the payables process. Thanks to them, we have a non-manual AP function that functions seamlessly and has brought us significant cost savings.
We had a huge pile of outstanding receivables that had blocked huge amounts of cash. We hired Cogneesol to help clean up our account sand support, especially with the receivables. The team charted a collections plan, segregated receivables as per their DSOs, and allocated the collections to their team with set targets. It took the agents under two months to collect close to 90% of our receivables!
Our customer master data was in complete disarray, slowing down our receivables considerably. Cogneesol assigned us a dedicated resource to help with customer data maintenance and streamline all the other sub-processes of Accounts Receivables. The resource immediately set to task with correcting payment terms, centralizing data maintenance, implementing controls, and conducting regular audits. Soon we were able to do away with more than 80% of customer disputes!
Cogneesol transformed our Accounts Receivables processes, freed up cash, and optimized our working capital position. The team does a thorough job of checking the accuracy of their bills, invoices, or credit terms, apply for cash payments correctly, do not override credit limits, follow up with customers in a timely manner when payments are past due, collect and apply cash correctly. These have made our Accounts Receivables position very efficient!
We used to suffer from huge volumes of duplicate invoices and missed vendor payments. Cogneesol streamlined our Accounts Payable process by centralizing data, eliminating data entry, and streamlining the invoice workflow. This has not only eliminated the problem of duplicate invoices but has also standardized the payment system and has regulated our working capital management, making us financially stronger and in-control of our operations.
We automated our Accounts Payable division with the help of Cogneesol’s team of qualified accountants. They came in with game-changing process improvements, including the elimination of data-entry errors with automated OCRs, the establishment of a ‘No PO No Pay’ policy, ensuring a system of timely payments, and elimination late fees. All of these have changed the face of our AP books. We are now in a great position to make strategic decisions.
