If you are a financial analyst in the current volatile market situation, then it is likely that you are wrestling with divergent forces in the current market. The current Covid crisis has created a noticeable dent in the revenue of many industries.
While you can fix some of it with a little adjustment here and there, short-term solutions will not solve the cause. Our approach at HighRadius has always been to dive into the roots of the problem. In this case, we have decided to take you on a trip on the day of a finance analyst to understand improvement areas in the accounts receivable department in a mid-sized business.
A finance analyst’s day in a mid-market business can be described as ‘eventful’. As it starts, analysts go over their worklist for the current day. This includes the review of consumer accounts they need to follow up based on previous conversations and identifying delinquent accounts to focus on, for the rest of the day.
AN ENTIRE DAY IN THE LIFE OF A FINANCE ANALYST
Finance analysts have to face situations with conflicts that can have a lasting impact on an hourly basis. Often, it is challenging to seek real-time information of their customers from various sources. As a result, they have to work with disjointed information that can result in false promises from customers.
The analysts’ job is to negotiate maximum payments or promises of payment from customers. However, their greatest source of information is often the sticky note. Analysts mostly prefer to jot down important aspects of any customer interaction on sticky notes. Why? Because it’s easy to find, possible present on every desk of their workstation. But apart from its environmental implications on deforestation, sticky notes are very easy to get misplaced. This outdated resource makes it difficult for the analyst to sort through past interactions with their customers.
Today data is the key to the success of a business and analysts take their data seriously. Since they have multiple roles and responsibilities in their organization, it becomes difficult for them to keep track of the right data. This data can potentially help the analyst to resolve accounts faster, or prolong the opportunity cycle to resolve such accounts if the data is incorrect.
Imagine being in the shoes of a finance analyst. Your responsibilities could supersede your expectations and can lead you to overutilize the resources around you. Analysts in most mid-sized businesses in the USA are majorly involved in simultaneous operational processes apart from just collections involving cash reconciliation, credit review, and dispute resolution. This can create a bottleneck that affects the overall AR operational efficiency.
For a Blue-Chip AR analyst, digitization offers the necessary tools, which has a ripple effect across all their operations. In the past, making a strategic change across the business was a challenge. But in today’s market, seamless integration with the technology has paved a way to revitalize AR operations with minimal fuss.
When you work with outdated technology, you are likely to face a collections gridlock. These include AR problems like increased bad debt from smaller accounts, processing and analyzing of new and current accounts, and managing deductions.
Apart from your work-life it also paints a picture of distrust from customers. On the other hand, how can analysts collect faster from their delinquent customers? In short, they need to be vigilant and diplomatic.
Disputes over deductions: Treading between controversy and ease. Let’s be clear, deductions should be a separate entity to collections. When unmanaged they can consume an undue amount of time and resources. A dispute management solution can take care of faster deductions through the early capture of claims and disputes.
Here’s some rationale to help analysts and CFOs understand why they should adopt technology to create a significant impact on their revenue.
‘SOME HOURS’ IN THE LIFE OF A FINANCE ANALYST
Now with a collection management solution, the analyst’s day gets streamlined and resourceful. From a single source of information, tracking delinquent accounts and sending correspondences becomes efficient. Collaboration is seen as a welcoming addition, with less time taken to find vital notes. While more time is invested in strategizing collection policies and analyzing KPIs.
In the absence of a proactive approach to managing collections, the mid-sized businesses may be at the risk of being left behind. With proper supervision, businesses can certainly get started with automating their collections while bolstering their AR analysts. It’s a case of, the right tools for the right people. The results speak for themselves with an average of 10% reduction in DSO, improved productivity, and better working capital reserves.
Automate invoicing, collections, deduction, and credit risk management with our AI-powered AR suite and experience enhanced cash flow and lower DSO & bad debtTalk to our experts
HighRadius RadiusOne AR Suite provides the complete collections solution to streamline labor-intensive processes by automating correspondence and providing a native dialer while delivering a personalized CX. It is quick to deploy and ready to integrate with ERPs like Oracle NetSuite, Sage Intacct, MS Dynamics, and scales to meet the needs of your order-to-cash process.
Lightning-fast Remote Deployment | Minimal IT Dependency
Prepackaged Modules with Industry-Specific Best Practices.