The challenge
Given the nature of the pharmaceutical business, Zuellig faced significant challenges when it came to managing its accounts receivables (AR) and the associated reconciliation processes. This was partly due to its customer base comprising of people with diverse backgrounds and digital literacy. Some customers still prefer to pay in cash or cheque ‘over-the-counter’ while others find mobile banking easier and more convenient.
This disparity in incoming payment types posed several operational challenges. Zuellig needed to set up support operations that could handle and reconcile each channel separately, adding complexity. Additionally, traditional channels such as cash and cheques ‘over-the-counter’ have historically been fraught with reconciliation difficulties as, in many instances, the company could not identify the source of payment of certain transactions. It could take several weeks and resource hours to resolve. Other common issues included mis-matched balances, cheques lost in transit, payment by one customer on behalf of another and uninformed transfers.
These inefficiencies frequently slowed the entire monthly reconciliation process.
The solution
Zuellig implemented a new SAP module called Cloud4Payment (eZPay) with the goal of significantly streamlining and revolutionising its AR operations. The system centralises and automates the invoice management process by giving customers the ability to generate an invoice and specify their preferred payment channel using any computer or mobile device. The invoice format is tailored for each payment channel and the solution can support credit cards, debit cards, cash and cheques ‘over-the-counter’, direct debits, bank transfers, e-wallets, QR PromptPay and payment by instalment. For convenience, customers can make payments for one invoice or several at a time.
In addition to invoice generation, the system also automates the AR reconciliation process. Every payment transaction has a unique reference number that links back to one or more invoices to support bulk transfers.
To complete the transformation of its AR and reconciliation processes, the organisation needed to integrate eZPay with its own systems to create a truly end-to-end digital experience. Working with Zuellig’s chosen banking partner, HSBC, and payment gateway partner, 2C2P, the company chose the Omni Channel solution.
Best practice and innovation
The Omni Channel solution aims to:
- Expand payment channels to Zuellig’s wider customer-base throughout Thailand.
- Integrate payment modules to its eZPay and SAP HANA systems.
With additional payment modes often come challenges around slower fund settlement, since they must be consolidated through different means and channels. However, by also setting up a funds pooling scheme, the company can centralise incoming payments to a single account without the need for staff to move funds manually from various banks on a daily or weekly basis. This speeds reconciliation greatly and the company’s bank also offered a bespoke solution where a bank guarantee is incorporated to support the settlement from Omni Channel.
Key benefits
Zuellig is on a transformation journey to move from an AR and reconciliation environment that required 80% manual processing to a fully automated solution for all payment types.
This not only frees up operational resources for other value-added tasks, it improves reconciliation for enhanced working capital and delivers a much better customer experience.
“By connecting the Omni Channel solution to our highly innovative platform Cloud4Payment invoice management system, we have effectively automated collections for approximately 10,000 customers across Thailand,” says Supika Teacha-Amnaj, VP Finance.
