The Surprisingly Sneaky Ways Returns & Claims Processing Costs You Money

If you’re still manually (or mostly manually) handling claims and returns, they could be costing you in more ways than you realize.

“Yeah, yeah — industry best practice says I need to update my processes,” you say. “But implementing a better system for my returns and claims is expensive! I don’t have the money right now. Keeping things the way they are is free.” But is it?

You might be unpleasantly surprised by how much you’re already spending subsidizing inefficient processes. In many cases, claims and deductions automation can deliver an almost immediate ROI for companies willing to invest. Let’s take a closer look at why outdated claims and returns management can actually be more expensive than investing in process optimization.

4 money-sucking downsides of traditional returns & claims processes

Old and outdated returns and claims processes are a drag on your customer service team, adding cost and complexity to your processes. By “traditional processes,” we mean processes that are completely or partially manual and involve disparate systems like email or a standard customer support help desk that aren’t purpose-built for claims management.

Lack of visibility

When you process claims and returns using email or a patchwork quilt of different systems, there’s no centralized place for your data to live. The information that could tell you how well your team is performing, what blockers you need to address or where you need to make changes is fragmented and difficult to collect for analysis. In other words, you’re flying blind — missing opportunities to increase efficiency and reduce invalid deductions.

Multi-department mayhem

Returns and claims involve more stakeholders than just about any other customer support cases. There’s the customer, suppliers, warehouses, logistics partners, the Customer Service department, management, repair shops and the list can go on. How can you hope to maintain timely and efficient communication among all these groups when discussions are scattered across email, phone calls and chat channels? It’s a mess that can delay resolution and frustrate your customers.

Time-consuming investigations

With so much information required in order to accurately verify a claim, the more places your team has to look for what they need, the longer the investigation takes. The time it takes to switch between different systems and manually transfer data back and forth adds up quickly. This cumbersome approach forces your team to spend valuable time on menial work, increases the chances of errors and can cause a backlog of claims to build up.

Difficulty identifying invalid deductions

Whether it’s due to data spread across different departments and systems, incomplete records of agreements and transactions, or no central hub for tracking claim statuses, determining if a claim is valid can be needlessly hard using traditional methods.

That puts more pressure on your already busy Customer Service team AND makes it more difficult for your Accounts Receivable (AR) team to get visibility into which claims have been approved and why so they can make the proper deductions.

For many companies, manual claims and deductions processes are so cumbersome that they just automatically write off low-value deductions (whether they’re valid or not) because it’s not worth the hassle. But consider this:

• The median automatic write-off amount is $50-100 across all industries.
• Roughly 13% of deductions are invalid.
• Approximately 60% of invalid deductions are never recovered.

Incorrectly approving claims or writing off invalid deductions means you’re letting lots of money walk out the door, never to return.

The costly drawbacks of outdated claims management hurt your Customer Service team, your AR team, your customers and your bottom line. Do your claims processes need an overhaul? Keep reading to find out.

Do you need a better solution for handling returns & claims?

If any of these statements describe your current situation, a modern, purpose-built solution can provide a more streamlined experience for both your staff and your customers.

• Returns and claims are handled primarily manually.
• Customers often don’t send the needed information for their claims to be resolved quickly.
• There’s unnecessary back-and-forth emailing with customers.
• Many stakeholders are involved throughout your returns and claims process.
• You have incomplete data and it’s difficult to report accurately on key performance metrics.

AI-powered claims automation: a better way to manage returns & claims

Optimizing your processes with an AI-driven automation solution like Esker can bring noticeable returns on your investment by:

• Centralizing claim information to ensure faster, more accurate investigations and tracking
• Enhancing visibility on receivables and revenue with real-time KPIs, trends and analysis
• Accelerating resolution speed and precision by automating workflows and reducing manual data entry
• Facilitating cross-department collaboration for clearer, faster communication
• Limiting invalid deductions to stop unnecessary write-offs and save money

Plus, Esker’s Claims and Deductions solutions are part of a comprehensive Order-to-Cash suite that automates and connects every step of the process for even greater efficiency and cost savings.

Maintaining your status quo may seem like the free, easy forward, but don’t be fooled. Every day you cling to manual, outdated processes is another day your company loses money and falls further behind your competition.

Shifting from manual to automated processes isn’t as difficult as you might think — and the benefits are hard to argue. Request a customized demo or talk to one of our specialists to learn more.