by Hans van den Bosch, Global Sector Head Consumer Brands, Retail and Healthcare and Mark Evans, Head of Payment Advisory, Global Liquidity and Cash Management at HSBC
Companies in the consumer brands, retail and healthcare (CBRH) sector face a broad range of collections and accounts receivables (AR) challenges. In many cases these arise from the diverse geographies they cover, coupled with a customer base that can range from retail to large multinational corporates and anything in between. Nevertheless, as Hans van den Bosch, Global Sector Head Consumer Brands, Retail and Healthcare and Mark Evans, Head of Payment Advisory, Global Liquidity and Cash Management at HSBC explains, changes underway in payment infrastructures could help these CBRH companies enhance the efficiency of their collections and accounts receivables processes.
Data quality, costs and speed are probably three of the principal areas where many CBRH treasurers would like to see innovation that could enhance their collections and AR processes. The capacity to improve the quality and preservation of data could add value in multiple areas. In the retail space, being able to collect and attribute additional data to specific customer transactions would aid the development of deeper and mutually beneficial relationships with customers (e.g. better targeting of special offers and loyalty programs). In the SME space, similar functionality opportunities could arise, especially where customers currently pay with an anonymous medium such as cash. In the case of larger customers, better functionality in areas such preservation of remittance information could improve automated reconciliation rates.
Anything that can reduce the costs associated with collections and AR would be similarly welcome. In the retail space, card payments have (in many countries) largely replaced cheque and cash payments, but the costs associated with some types of card can still be significant. SME customers in some countries still make extensive use of cash payments, with obvious cost and security implications, while with larger customers much of the cost burden is associated with manual reconciliation of invoices and remittances that do not obviously match.