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Asia Pacific Sector Insights
| Fast and Furious: Optimizing Collections for Consumer and Healthcare Sectors
Rohit Jamwal
Asia Pacific Consumer and
Healthcare Sector Head
Treasury and Trade
Solutions, Citi
Fast and Furious: Optimizing Collections
for Consumer and Healthcare Sectors
Centralization and standardization are regarded as the Holy Grail to enhance efficiency and
control over financial processes. For multinationals in the consumer and healthcare space
with diverse clientele dotted across fragmented markets in Asia, achieving standard billing
format, automated collections and centralized receivables can significantly enhance operational
efficiency and reduce costs.
Collecting outstanding payments faster and
improving collection efficiency has been the
mantra for CFOs and corporate treasurers to
improve days sales outstanding (DSO). In reality,
achieving shorter DSO comes at a cost. The
more viable option is improving collections
efficiency — for both process efficiency and
settlement risk mitigation, which can boost
working capital, reduce operational risk and
enhance customer relationships.
A case in point is one of our multinational (MNC)
clients in the consumer industry selling to
diverse distributors, from large wholesalers and
retailers to mini-marts and mum-and-pop shops.
While the modern retail customer such as a
supermarket can generate an electronic
payment from its enterprise resource planning
(ERP) system right away and send an electronic
payment to ensure the amount due is settled on
time, the corner store owner is less inclined to
go paperless.
It would probably be easier for the latter to mail
out a paper cheque, which means the
outstanding amount is likely to be paid off a few
days later when the cheque is cleared. Or he
might request the MNC to dispatch a staff to
physically pick up the cash so that he does not
need to close the store for an hour or two to line
