The challenge

When US-based ACCO Brands acquired Europe based Esselte in 2017, it created an office products powerhouse with revenues of $2.0bn. The merged company owns dozens of brands including Kensington, Leitz, Rapid, Rexel, Swingline and Five Star, and has more than 6,000 employees worldwide. For global treasurer Jagannath ‘JB’ Bobji and his team, the challenge was to integrate the Esselte business with operations in 22 European countries into ACCO’s treasury structure, so they turned to Bank of America for support. Bank of America had been their primary banking partner for many years and became involved in supporting the expanded treasury structure in Europe and the shared service centre (SSC) based in Warsaw, Poland.

“One pressing need rapidly became clear; our multiple consumer brands, now boosted by Esselte’s, generated a high volume of relatively low-value sales, making reconciling accounts receivable (AR) a constant challenge,” recalls Jagannath Bobji, Global Treasurer

Approximately 31,000 invoices each month, arriving by email or through the company’s portal, would have to be matched to the ledger. This mammoth task was being managed using spreadsheets and a lot of manual input. An automated system would save time, reduce errors and relieve the pressure, not only in the AR team but also in the in-country customer services teams, who were having to reach out to their customers when clarification was needed.

The solution

To solve this problem, Bank of America approached Ovinder Assi, ACCO’s EMEA Treasury Director with an automated system that would reduce or eliminate as much manual processing as possible. The solution, branded Intelligent Receivables, is powered by HighRadius, a fintech enterprise software-as-a-service (SaaS) company. It brings together artificial intelligence (AI), machine learning and optical character recognition (OCR) to replace manual intervention.

Once in place, the system will: Identify payers and associate their payments to remittance advices that are received separately; extract remittance data from emails, email attachments, electronic data interchange (EDI) and payer web portals; match payments to open receivables using the enriched remittance data and create a receivables posting file that ACCO uploads to its ERP system. Where an invoice cannot be automatically matched, an exception portal allows the receivables staff to upload supporting data or make other adjustments to enable matching. For ACCO, Intelligent Receivables promises to transform its reconciliation processes, minimise manual input and free-up resources for more productive use.

Best practice and innovation

Together with the Bank of America team, both Ovinder and Jagannath travelled to Poland to share and approve the proposal with Senior Finance Director of SSC, Maciej Lasek. Under Maciej’s support and leadership, Mira Pencerzynska and Agata Przezdziecka from ACCO’s AR team in Warsaw, co-ordinated and piloted the project to automate reconciliation across Europe. They started in Spain, one of the more problematic markets with high usage of cheques and other paper-based payment instruments. If the solution could work there, it would likely work in other, more straightforward markets.

The initial improvement in Spanish straight through processing (STP) rates was modest – from 30% to 50% – but the experience gained allowed ACCO to fine-tune the process so that, today, STP rates in Spain are similar to the Europe-wide rate of around 90%.

Once the Spanish trial had succeeded, the solution was rolled out across the other 12 European countries where ACCO has a presence. In total, this process took just over seven months, including adapting the system to some local market variations.

Key benefits

• Improved STP.
• Manual intervention and errors reduced.
• Solution now also live in Australia with considered expansion to the North American entities

ACCO Brands has become an early adopter of an AI-based approach to AR automation. By careful trialling of the new system in a challenging region, it was able to ‘course correct’ in partnership with its bank so that the eventual roll-out happened rapidly and was delivering results at once.

“The results speak for themselves; where previously approximately 70% of payments needed manual intervention to be correctly matched, today that figure is down to 10% and may fall even further. AR staff at our Warsaw SSC have been freed from repetitive manual tasks and can focus on supporting the business in more productive ways,” explains Maciej Lasek, Senior Finance Director of SSC.

The Adam Smith Awards is the industry benchmark for best practice and innovation in corporate treasury. The 2021 Awards attracted a record-breaking 309 nominations spanning 40 countries. To find out more please visit: https://treasurytoday.com/adam-smith-awards.