Transforming A/R Operations with AI Technology as
Past-Due Recovery Remains a Key Challenge

What you’ll learn

  • Necessity for A/R Transformation to Ensure Steady Cash Inflows
  • The Evolving Role of Technology Providers as Solution Experts Supporting the Businesses During Difficult Times
  • Changing Trends in Credit & Collections Operations to Ensure Working Capital Optimisation

Role of Credit & Collections Technology in Transforming A/R Operations

All businesses are working out their best approach to maintain cash flows. Applying a careful balance of operational rigor and customer empathy is vital in achieving collection KPI’s whilst maintaining customer relationships. Empowering A/R teams to be agile and focus on high-risk payments whilst automating more predictable, and low-risk invoices can be a gamechanger for maintaining business continuity.

30% of the respondents have identified the decline in collections as a negative business impact as an aftermath of COVID-19.

30% of the respondents have identified the decline in collections as a negative business impact as an aftermath of COVID-19

However, some finance departments have found that remote working has truly disrupted the productivity of A/R teams with many realizing the value of easy-to-access technology and its impact on the entire order-to-cash cycle. A survey with 100+ CFOs and senior executives during the recent CFO Virtual Agenda revealed that over a quarter of respondents agreed that the global pandemic has highlighted the need for a robust infrastructure, improved access, and cloud solutions and another 30% said that it had uncovered the need for more automation in order-to-cash processes.

In a recent interview with SSON, Natalie Fedie, VP of Customer Value at HighRadius, commented that the current economy has put more of an effort on the O2C process… “CASH IS KING, now more than ever. A/R is a big driver to ensure that working capital is available, and so we’re seeing a lot more attention towards A/R at this time”. Since the onset of COVID-19, HighRadius has observed a 4X increase in the number of enquiries relating to how to optimise O2C with automation. With the spotlight firmly on the receivables function, businesses are looking to solution providers to help them do this through automation and intelligent insight.

Process Expert vs Technology Provider

Natalie Fedie went on to explain however, that customer expectations have changed. “Our role is now more than a technology provider as we embrace the responsibilities of a process functional expert who can empower and support clients through user adoption and beyond, monitoring the impact on business value whatever the economic environment”. HighRadius solutions are based on best practice but highly configurable so workflow processes can be designed to increase efficiencies and meet the business objectives.

Natalie described how her customer value team works closely with clients to make sure that they’re maximizing the value of the software systems. “We built a framework of metrics that starts all the way from the very basics of adoption and performance as far as analyst’s productivity, your customer productivity, all the way up to driving those business values like lowering DSO or decreasing bad debt. Those are the things that matter to a business, so we defined this framework of measuring that value.”

Natalie added that in the current scenario, the client-tech relationship should be aligned to address the business challenges, notably collections, and that her team does that through identifying process gaps and providing proactive recommendations for improvement using HighRadius technology.

AI Technology Drives Proactivity in Credit and Collections

Wherever they work, credit & A/R teams need to focus on critical customers and figure out a strategy to recover the past-dues – a process that can be simplified and accelerated with intelligent automation. AI-based technology can not only relieve analysts from the burden of manual tasks but it also provides actionable intelligence on when the customer is likely to make the next payment based on previous behaviour. Then, in what is almost a reverse engineering project the collector can create a dunning strategy based on the AI-predicted payment date.

A recent panel discussion organised by HighRadius with credit experts from Experian, CreditRiskMonitor, CreditSafe, Credit.Net and S&P Global analysed the value of AI in credit scoring. Michael Flum COO & SVP of CreditRiskMonitor said that credit scoring should be integrated with AI, machine learning and deep neural networking to ensure that in this scenario, you are safeguarding your organisation against potential bankruptcy and other financial stress. It is important to have a real-time visibility of how credit risk is changing from the last time you reviewed a particular portfolio

AI can create significant value, speed and efficiency for credit and A/R team, reducing past-due by as much as 30%, controlling bad-debt risk and helping to optimise working capital.

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