My Advice To My Former Self About A/R Automation: Do It Now! 

[Cortney]: Yes. Everybody deserves a fantastic customer experience. A business is not just a business. It involves people, and that makes room for providing [it] targeted and personalized experiences.  In A/R, the time to build trusting relationships is now. A/R leaders need to understand that we can’t continue to do things the same way and hope for a different outcome.

Focusing on customer expectations and satisfaction drives the ability to develop lasting relationships, which allows for insight when the customers’ needs are changing.

In my last role, we identified that the collections team was having trouble due to cash not being applied in time. The reason for that was because no one considered cash application challenges as the company expanded. With a simple cash application automation, we solved both these team’s problems and the deductions team, which was now resolving actual disputes and not involved in managing incorrect cash posting. Our data was in a better place, and our collectors felt more confident on customer calls. Customers, too, started reacting positively to our outreach. The A/R executives enabled their teams to take pride in their job and be happy with their work. The moral of the story is that the first step in the right direction had positive downstream benefits.

[Cortney]: When working in my previous organization, which was also in the consumer goods space, I felt that our most significant challenge was not applying cash correctly. But after researching further, I realized we also had problems with deductions and collections. We had many customers taking unauthorized deductions.

As a typical CPG company operating with low margins and in a highly complex business environment, we had thousands of customers, large and small. The broad scope of our A/R process puts a lot of pressure on our collectors. In addition to this, they had to work with multiple partners in multiple systems and hold customers to their agreed-upon terms. To solve such challenges, the first line of defense for the A/R executive is awareness. Next is ensuring the team has access to the correct data to make critical decisions. Another crucial factor is having a single system that can collect and organize all related information for the A/R department.

I can’t stress enough how much time goes to waste every day for A/R teams to sift through emails and log into portals – where no two are alike, document repositories, ERP systems, etc. So I again reiterate, executives need to start by identifying gaps in their current processes and then devising a plan of action for continuous improvement and automation to fill those gaps

[Cortney]: Well, putting everything in one single reason is a little tricky, so there are a few I would like to highlight. The first is access to decision-ready data. A/R functional leaders are often quite intuitive when it comes to identifying future challenges. And they’re great at highlighting their concerns to executive leadership. However, they do not have the required data to back their intuition most of the time.

Automation, machine learning, and AI provide the data behind the decisions, and if you do it right, it’s all available to you in a single platform. It’s also readily available for the team, allowing them to make more accurate predictions.

Automation is beneficial in an environment where market conditions change by the minute. For example, in some organizations, COVID required them to pivot and sell to a new customer and even into new markets. Using automation, the credit department can gain real-time access to this new potential customer’s data, assess it in real-time, and not lose the opportunity to enter a new market. It also allows us to keep tabs on any customers who may have changed risk profiles.

An end-to-end integrated system provides visibility into cash flow, allowing the finance department to forecast the long-term impact of the crisis on the organization, and communicate the same to other business functions. These tools, automation, machine learning, and AI, will better enable leaders to build an agile A/R function that is prepared to handle radical economic diversity.

[Cortney]: While some of us might have been lucky the first time and were able to survive the pandemic, despite existing process gaps, I don’t think we will be lucky next time. We need to future-proof our business, and digital transformation is necessary to drive that initiative.

Today, you either accelerate digitally, or you risk the survival of your organization. But remember, when it comes to digital transformation, make sure that you have realistic expectations from technology. Work with the right partners to achieve desired results. Most importantly, remember that you are critical to your business. No area of the business can operate with cash. Your customers, too, are of utmost importance. Keep them at the center of your plan in the transformation journey. Lastly, in the words of Winston Churchill, “Never let a good crisis go to waste.”

For A/R leaders across the consumer goods industry, digital transformation is like a boon for handling finance operations at a renowned CPG company. Tools like automation, machine learning, and AI will better enable leaders to build an agile A/R function that is prepared to handle sudden changes like the ones we faced due to the COVID-19 pandemic. And digital customer experience can be significantly improved with the proper tech stack for your business.

As a finance person, you really need to spot leading solutions and allow them to take care of the processes so you can focus on things that are proprietary to your business.