According to a survey conducted by HighRadius, approximately 30% of the CFOs and Heads of finance revealed that the global pandemic has exposed the need to automate out order to cash processes.
Across the industries, senior finance and A/R leaders are focusing on accounts receivable automation. Should you join the league and initiate a digital transformation for your order to cash process as well? The answer would depend on how efficient your accounts receivable process is. If your receivables process has leaks, for instance, your A/R team operates in silos, and there is no real-time visibility on critical A/R metrics from the senior management’s end, then you should consider automation.
Every business is different, and your organization might also experience unique challenges. Automation could be the best option if there are unique challenges in your business. How would you identify whether your A/R needs automation or not? Here are some top signs that indicate it is the right time for you to automate.
There could be other red flags in your accounts receivable process, if you have identified such critical issues that are impacting your A/R process, add those in our A/R assessment form and our A/R technology expert will get back to you with answers to your problems.
Your credit teams can fast-track reviews based on external bankruptcy alerts, negative payment trends, and credit utilization thresholds. They can leverage the AI-based blocked order predictions to manage upcoming orders. Better visibility on the overall portfolio risk helps them to control and improve bad debt.
With end-to-end accounts receivable automation, organizations will be able to save more than 70% of their invoicing costs. The transition from paper to electronic invoices would also guarantee timely invoice delivery, boosting customer satisfaction. Additionally, with an automated cash application, you can eliminate 100% lockbox data capture fees, eventually balancing the operational expenses in A/R.
A/R automation enables your A/R analysts to focus on more strategic work rather than dedicating time towards manual, tedious tasks such as cash application, claims aggregation, manual credit report aggregation, and scoring.
Your collectors can leverage the AI capabilities such as payment date prediction, and dynamic customer segmentation to proactively identify the critical customers along with recommended collections strategies. Integration with self-service portals and multiple payment options enables the customers to pay faster, leading to an improved DSO.
Softwares like Highradius AR automation software, not only have an interactive user interface but also provide access to real-time data across the order to cash process. The senior A/R leaders can review the A/R process health metrics and even dig deeper to analyze the analyst’s productivity metrics to suggest course corrections. With all your AR data in one place, you can analyze any aspect of your accounts receivable process just in seconds. You can generate real-time reports and visualize them using bar graphs, pie charts, and several other formats just with a few clicks.
Accounts Receivable Software ensures end-to-end automation across order to cash. This means every team across O2C will be interconnected with a seamless flow of data. For instance, your collections analysts receive real-time updates when an invalid deduction is identified or an order is blocked so that they can prioritize the collection of such low-hanging fruits.
Organizations are able to scale up their customer experience by offering various forms of digital collaborations to end customers. These include self-service portals, online payments, integration into their A/P portals.
An accounts receivable automation venture is often misinterpreted as a ‘headcount reduction’ initiative. However, this isn’t true! A digital transformation doesn’t replace your employees but enables them to ensure they add strategic value to the office of the CFO.
Many organizations stick to their legacy, on-premise systems because they aren’t comfortable with handling the employee reaction post-transformation. That’s why change management is an important aspect that CFOs and senior A/R leaders need to focus on.
Change management would involve explaining to your employees that the focus of automation is to improve the Accounts receivable process and not to replace human employees. A/R automation would eliminate the clerical tasks so that your team can focus more on high-value tasks.
Every AR automation initiative would involve the following steps:
With the help of the above-mentioned steps, you should develop a receivables transformation strategy to kick-start your accounts receivable automation. Learn how to craft an effective transformation strategy in O2C with exclusive insights from experts at Ernst & Young.
HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.