Accounts Receivable processes are mission-critical for all companies since they secure cash flow and are particularly strategic for many enterprises amid inflation, supply chain and recession concerns. Accounts Receivable (AR) also requires an end-to-end organizational view that includes processes that impact it, such as sales or order management, as well as the AR processes themselves.
This is where Celonis comes in. The company acquired Sailfin, an AR technology company, and is launching Celonis Accounts Receivable Apps that target core operations in AR. Celonis announced the acquisition at Celosphere 2022:
Collections Management App, which is designed to be your team's collections hub with data-driven customer prioritization, task streamlining and team management.
Disputes Management App, which enables root cause analysis, accelerates dispute resolution and removes friction from AR processes.
Credit Management App, which facilitates efficient and accurate credit operations through intelligent risk assessments and credit limit suggestions, and simplified approval flows.
We caught up with Sailfin CEO Harit Nanavati, who has more than two decades of expertise in implementing AR best practices to improve operating cash flows, credit risk, working capital and profitability for large enterprises.
Here's a look at the vision behind the launch of Celonis’ Accounts Receivable apps and the acquisition of Sailfin.
How Celonis and Sailfin came together. Nanavati said the two companies started talking about a partnership to collaborate on an AR product. The combination of Sailfin's AR technology with the Celonis Execution Management System (EMS) made more sense as a native product that can bolster existing capabilities, he added. "We wanted to make our mark in the Accounts Receivable space," said Nanavati.
A big way to make a mark is giving analysts and operations workers more of their time back. "Traditionally what happens is 80% of the analyst's time goes into bringing all the information together for them to take an action. 20% time is action," said Nanavati, who noted that the Celonis EMS platform brings data together from disparate systems.
Why AR is so critical? Nanavati said:
“AR is critical for most companies. Obviously, this is where your money comes in. This is where your billions of dollars for all the large companies are coming in, and every day that you collect your money earlier, the interest on those billions could be millions of dollars. It's strategically important for most companies.“
The combination of AR, process mining and execution management. Nanavati said Celonis was already addressing AR processes and bringing new ways of thinking about processes to the market. With Sailfin, Celonis EMS can solve a bevy of pain points. "We are already unlocking a ton of value via process mining for our customer and in addition we can provide a holistic approach that not only can identify inefficiencies but provide operational solutions to address them as well," he said.
Why a targeted approach to AR matters. Sailfin addresses key, specific processes within the AR function. Nanavati said:
"Accounts Receivable consists of several key processes. It starts with credit management because when you ship a million-dollar product to a customer, you are loaning that money to your customer. You are acting as a bank.
So now you must make sure that the customer is credit-worthy. So, you have to continuously evaluate their credit to make sure that they are actually worthy, not different from your personal credit worthiness. That's credit management.
Then comes collections management. Now that your customer has bought some product, you are going to to send them the invoices. Then the process of collections begins. You want to make sure invoices are being tracked properly.
From there, there’s dispute management. You have the full workflow of how you resolve disputes. From there on the next process is cash application. You have to organize and automate to apply those payments with minimal manual interventions.”
The big picture. While the Accounts Receivable apps intelligently address key facets of AR management, the reality is that upstream processes also directly impact AR. Nanavati said the promise of Celonis EMS is showing how other processes impact AR.
"A lot of AR issues are often related to upstream processes. There might be billing issues. Or you shipped the wrong part," said Nanavati. "With Celonis' process mining capabilities we can pinpoint where the issues are coming from so you have an opportunity to identify and address the upstream processes that are affecting AR proactively unlocking the cash trapped in working capital due to inefficient processes."
Expanding in India. Sailfin has a team in India that with Celonis will now operate on a global stage. Celonis last year outlined plans to invest $100 million in its India operations. The larger Celonis presence in India will pay dividends, said Nanavati. "India is strategic because many shared services centers are based in India and we can service them even better," he said.