Maximizing Efficiency & Reducing Cash Application Effort by 93% with Accounts Receivable Automation

Barrett Steel is the United Kingdom’s largest steel stockholder. The company has its own distribution fleet and numerous sites across the UK.

The Challenge

Barrett Steel has grown rapidly for the past decade and a half, with over 40 depots operating from 30 locations. This rapid expansion created new challenges for the cash application team. Not only were there 14 credit controllers working in different locations, but a primarily manual cash application process stole time from more valuable work, such as collections.

“Our growth really highlighted the inefficiencies and lack of scalability of our existing process,” says Rachel McGowan, senior credit controller. “We had no centralization and little standardization. Plus, we were always adding more bank accounts, more reconciliations, and more manual cash postings and transactions. It was taking credit controllers up to two hours to post transactions. That was time spent doing manual work that could have been spent chasing debt.” Time spent downloading bank statements, finding account references and remittances, and other activities required additional manual effort.

McGowan was also concerned that keeping staff mired in manual posting would affect engagement—and retention. “At Barrett, we want to make sure that people stay interested and engaged. But posting cash isn’t one of the enjoyable parts of the job. It has to be done, but no one really wants to do it. We knew there had to be a better solution.”

Why BlackLine

The team considered building a cash application solution in-house, but that idea was “scrapped quickly,” says McGowan. “Our credit and risk director is very much into solution finding. He heard about BlackLine and realized it would really help us centralize and standardize our process. Plus, it would free our people to focus on more interesting and valuable work. I don’t think we really ever considered anything else after seeing what BlackLine could do.” 

BlackLine would also integrate with Barrett’s “antiquated” ERP. “We were looking for something that we could build into our existing technology. We not only have Experian integrated into our ERP, but BlackLine is also an essential addition.”

Barrett implemented BlackLine prior to the beginning of the pandemic, a move McGowan calls “fortunate.”   

“We were all working from home, but as we had already centralized and automated much of the process in BlackLine, it was business as normal for us. This would have been impossible with our previous manual process.”

The Results

Freed staff to spend time chasing debt and collections. With BlackLine, Barrett now has one person focused on cash application instead of 15. “Our cash application position heads up our cash team,” says McGowan. “This allows us to have 14 other credit controllers focused solely on chasing debt and collections, instead of cash application.”  The focus for the team was not so much around increasing collections, as historically their collection efforts have been good. It was around freeing up time for the team to expand their roles. They were able to develop staff members to take on different work such as credit insurance and working with IT on various projects. Another benefit for them was during Covid. When other companies were struggling with collections and experiencing reductions, Barrett Steel was able to maintain their excellent results, which they believe couldn’t have been done without Cash Application.  

Saved time. Previously, applying cash required two hours out of the workday. “With BlackLine, our cash is posted far more quickly than it’s ever been before,” says McGowan. “Cash isn’t getting posted just once a day but continuously.”  

Faster cash application, combined with the BlackLine platform’s ability to process intraday bank payment files, has also sped up the sales process for pro forma customers.

“We have a lot of customers who pay down their accounts to allow for new orders. With BlackLine, cash is updated every two hours when they receive the bank file drop, so we don’t have to put temporary credit limits in place for orders to go on.”

Improved ability to compete for accounting talent. With BlackLine, managers can now share with prospective employees that the job won’t include much manual cash application.

“It’s nice to be able to tell candidates that cash application won’t be part of their day-to-day job. When we tell them we have a solution that automates the process, their eyes light up,” says McGowan. “For me personally, it would also be a turnoff if an employer didn’t have a solution like this in place. I couldn’t ever go back to doing everything manually.”

Improved engagement and reduced the likelihood of turnover. Existing staff are also “much happier” with BlackLine.  

“We’ve given staff a solution that lets them focus on more interesting and enjoyable work. Instead of spending two hours manually posting, they’re spending two hours diving into issues and truly adding value,” says McGowan.

“Cash application is also an area that typically experiences high turnover. With BlackLine, we feel we really have a competitive advantage in retaining our talent.”

Increased accuracy. Since implementing BlackLine, Barrett has reduced their rate of mis-posted payments.

“Our incorrectly allocated remittances are much, much lower. As a result, we’re spending less time correcting accounts,” says McGowan. “Our accuracy has increased, as has our confidence.”

Industry

Banks & Credit Unions

ERP

AS400

Region

United States

Company Size

Midsize

Business Impact

Freed staff to focus on chasing debt and collections

Saved time

Improved ability to compete for talent

Increased engagement

Reduced the likelihood of turnover

Increased accuracy


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