Nine Accounts Receivable Challenges and How to Solve Them

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Explore real-world accounting horror stories on the cost of holding receivables from SMB finance executives and learn how accounts receivable automation helps to create better bottom-line impact.

What's Inside?

  • Explore how the impact of the overdue invoices could be significant on the bottom line, if not proactively addressed
  • How to better utilize AR automation for strategizing better profit margins and visibility
  • Charms of smart AR automation to achieve cash excellence
  • HighRadius’ scalable approach to optimize the order-to-cash function

Chapter 1

Don’t Let Your High-Risk Customers Fall to the Dark Side!

Chapter 2

Is Poor Reporting and Analytics Casting a Bad Spell on Your AR?

Chapter 3

Does Your AR Data Solemnly Swear it's Up to No Good?

Chapter 4

Are Your Remittances Stuck in Web-Portals in the Depths of Azkaban?

Chapter 5

Defense Against Manual Cash Posting for Checks

Chapter 6

The ‘Not-So-Subtle’ Art of Manual Deductions Identification

Chapter 7

Amidst the Brewing Scalability Concerns to Prepare for the Future

Chapter 8

The Quintessential Magic of Digital Payment Methods

Chapter 9

The Cursed Chamber of Non-Intuitive Accounting Functions
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Chapter 01

Don’t Let Your High-Risk Customers Fall to the Dark Side!

“Current processes are deprived of account prioritization. The inefficient collection strategies slow down the process and lead to large overdue balances.”

-Chief Financial Officer, Fortune 1000 F&B company

Listening to the CFO of a Fortune 1000 F&B company, it may seem that the woes of receivables are never-ending. This rings true, especially when AR teams are struggling to stay on top of critical accounts to get paid faster. Let’s go through a typical day in the life of a collector. They spend hours calling and dunning customers to get them to pay pastdue invoices.

Under the mountain of outstanding receivables and pending collection calls, it gets difficult to keep track of critical accounts in the highest overdue bucket. The impact of these overdue invoices could be significant on the bottom line, if not proactively addressed. As per PYMTS, 67.9% of firms that receive more than half of their payments late experience cash-flow problems.

How is your bottom line taking the brunt?

  • Higher days sales outstanding
  • Lower cash flow
  • Lost productivity

The Potion: De-cluttering the Collector’s Worklist

  • We know that there’s no ‘one-size-fits-all’ policy when it comes to dealing with customers. Leveraging financial data such as payment behavior, profitability, and failure risk info can help prioritize open accounts and reduce delinquency.
  • To help scale your collections efforts and focus on high-priority accounts, HighRadius’ solutions offer auto-recommended account-level actions to initiate appropriate customer correspondence.
customer segmentation
Chapter 02

Is Poor Reporting and Analytics Casting a Bad Spell on Your AR?

“Reporting is difficult and clumsy using excel. We have a difficult time generating the type of ROI reports that we need or would like to have for business purposes.”

-Executive Vice President, Architectural Services

The Vice President of a leading Architectural Services firm on the West coast opened up about the need to keep up with the changing pace of reporting requirements. An Excel-based reporting system could be highly tedious, manual, and time-consuming. In the age run aground by spreadsheets, it’s hard to keep track of the AR team’s performance and productivity.

Most businesses tend to rely on age-old business metrics and data which could prove to be catastrophic for the company. And what good is data if it’s not utilized for strategizing better profit margins?

How is your bottom line taking the brunt?

  • Increased bad debt
  • Increased number of write-offs
  • Lack of visibility into performance and productivity
  • Lack of access to real-time insights

The Potion: Insightful Dashboard with Crucial Metrics

  • Imagine a dashboard where you could oversee all your critical working capital metrics. Your AR team does not need to manually scavenge through data-heavy spreadsheets to make data-driven decisions.
Reporting & Analytics
  • RadiusOne AR provides out-of-the-box reporting and actionable insights by analyzing data across your receivables processes. It enables end-to-end visibility across O2C functions and helps understand their performance trends.
Chapter 03

Does Your AR Data Solemnly Swear it's Up to No Good?

“Have to keep a manual record of reminder calls, emails, and blocked orders. This method of tracking information is taxing and error-prone.”

-Vice President of Finance and Admin,
SaaS Company with 100% YoY Growth, Information Security

Lost in the wilderness of manual record-keeping methods, the VP of a SaaS company with 100% YoY growth experienced first-hand how poor AR data management practices impact the bottom-line. Manual data management results in high OpEx that ultimately diminishes your earnings. In a business with multiple parallel operations, keeping track of past and present information could be difficult.

AR analysts manually go through piles of data to find essential customer information. A large volume of scattered data is not much help unless you have the right tools to collate them. With the rising volume of invoices, keeping track of past customer communications and transaction histories could be difficult.

How is your bottom line taking the brunt?

  • Poor synchronization in customer communications
  • Hard to track and update client correspondence history
  • Miscommunication between different departments
  • Difficulty in data portability and database administration

The Potion: Single Source of Truth for Everyone

  • Data is an essential fuel when it comes to managing business operations. With a centralized data repository, you will be able to create a single source of truth to access crucial AR information.
  • RadiusOne AR helps finance teams gain centralized access to collaboration history and avoid the hassles of manually collecting account details and correspondence history. You can easily create notes, schedule tasks, and reminders to track past-due receivables.
Centralized AR Data
Chapter 04

Are Your Remittances Stuck in Web-Portals in the Depths of Azkaban?

“We have to manually pull in the remittance information hosted on the web portals which gets quite tedious and time-consuming.”

-Vice President of Information Technology, Industrial Products

An executive VP from an IT firm shared that their AR analysts spend countless hours manually acquiring remittance data from web portals. Manual remittance aggregation is one of the main causes of delayed time-to-cash. As a domino effect, finance teams are not able to focus on other high-value tasks such as credit and collections.

How is your bottom line taking the brunt?

  • High OpEx
  • Inaccurate or delayed cash posting
  • Limited visibility into payment status, hampering downstream AR functions

The Potion: Intelligent Remittance Capture to Get Cash Fit

  • Use smart tools to get cash fit. RadiusOne AR suite seamlessly captures remittance data across web portals, check stubs, and emails. At HighRadius, we help finance teams utilize their time for more strategic functions such as credit and collections activities.
web-portal remittance aggregation
Chapter 05

Defense Against Manual Cash Posting for Checks

“Burdened with manual cash posting since 99% payments come in checks.”

-Chief Operating Officer, Food and Beverage

The Chief Operating Officer of an F&B Company highlighted that even if you have an AR team that accurately and quickly posts payments, it’s not enough to cater to the evolving payment behavior of customers. The gist of it is – you may have received the payment but the open invoice has to be closed. This is to ensure that the available credit limit of the customer is adjusted so they are able to place their next order. Paper-check processing means doubling the workload with high overhead and OpEx.

When it comes to checks, your finance teams may not be able to perform same-day cash posting. The process gets even trickier when it comes to matching the invoices to remittance data. Analysts need to manually aggregate remittance information from different sources such as emails, checks, and web portals to match payments with open invoices. This is a time-consuming and errorprone process that delays straight through cash posting.

How is your bottom line taking the brunt?

  • Increased days sales outstanding (DSO)
  • Poor resource utilization

The Potion: Embracing AR Automation to Achieve Straight-through Cash Posting

  • RadiusOne AR solutions supercharge your team with zero-touch, straight-through cash posting to the ERP. It helps auto-capture remittance data from checks, emails, and web portals to enable straight-through cash posting.
  • Once the invoice matching is complete, the cash is applied back to the ERP where the open AR is updated. Your finance teams can then sit back and focus on more strategic tasks as AI-powered invoice matching takes care of cash posting.
 zero-touch cash posting to ERP
Chapter 06

The ‘Not-So-Subtle’ Art of Manual Deductions Identification

“Manually identifying deductions and creating line items makes the process slow and error-prone.”

-Executive Vice President, Strategy and Analytics, Software

Unwarranted deductions could prove to be costly if not resolved. We uncovered the consequences of deductions on the bottom-line while hearing from the VP of a software company. His words ring true for most mid-sized businesses; manually identifying deductions could affect the net recovery rate due to delayed resolution.

This manual and time-consuming process affects resource utilization and reduces productivity. Moreover, invalid write-offs could gravely affect your company’s financial performance.

How is your bottom line taking the brunt?

  • Working capital stuck in disputes
  • High OpEx
  • Increased rate of write-offs

The Potion: Enabling Early Dispute Identification for Faster Resolution

  • Proactive dispute identification will help reduce the resolution time and safeguard financial losses.
  • RadiusOne AR’s Cash Reconciliation App helps identify deductions at the source based on shortpayments or over-payments to enable early resolution and faster recovery.
Deductions identification
Chapter 07

Amidst the Brewing Scalability Concerns to Prepare for the Future

“The more we customize our ERP, the slower it goes.”

-Chief Financial Officer, Computer Hardware

Increasing revenue and expanding product lines are not the only critical factors for business growth. The CFO of a computer hardware company opened up about a simple fact – with a rising customer base and demand, you can’t really expect a slow system to perform under a heavy workload. It may come as no surprise that postmodern ERPs have helped businesses cut costs, reduce manual efforts, and automate clerical tasks.

But as companies scale and grow – their reliance on ERPs keep evolving to incorporate additional functional requirements. And limitations of a finance infrastructure can adversely affect your business success. Long story short – your business should not be incurring more costs to get paid faster. The question remains, is your business well-equipped to scale with your current ERP system?

How is your bottom line taking the brunt?

  • Decreased operational efficiency
  • Inability to manage customer accounts effectively
  • Poor ROI

The Potion: Adopting an ERP Optimization Platform

  • With the introduction of the RadiusOne AR, HighRadius has the breadth and depth of capabilities to meet the AR functional requirements across all stages of business growth.
  • RadiusOne AR can help enhance the power of your ERP. Our plug-and-play solution seamlessly fits in with popular ERPs such as NetSuite, Sage Intacct, and Microsoft Dynamics. Our budget-friendly solution does not require an army of IT professionals to configure, install, and implement. Designed as an out-of-the-box solution with a quick deployment timeline, our product requires minimal IT support and eliminates the hassle of complex implementation.
Adopting an ERP Optimization Platform
Chapter 08

The Quintessential Magic of Digital Payment Methods

“A large number of customers have switched to digital payment methods, and the current ecosystem doesn’t support digital payment methods. Such a large volume of digital payments are hard to process and apply.”

-Chief Financial Officer, East-coast based Consumer Goods

For most mid-sized businesses, cash and paper checks are still prevalent but recently, they have taken the back seat. Today, customers prefer the convenience of digital payment methods.

The CFO of an East coast based consumer goods service company agrees that customers are not likely to deal with businesses that do not offer multiple payment options. This could create a bottleneck for your business in terms of usability, flexibility, and responsiveness in AR transactions.

How is your bottom line taking the brunt?

  • Longer time-to-cash
  • Hampered customer relationships
  • Financial complexities

The Potion: Adapting to your Customer’s Digital Payment Needs

  • In the backdrop of emerging digital transformation, digitization has become a necessity for business survival. According to Mastercard, 81% of businesses that adopted digital payments say it has improved customer satisfaction levels.
  • With RadiusOne AR’s self-service payment portal, your customers can easily access and manage their invoices and account statements. They can raise disputes and make payments in multiple formats including ACH and credit cards.
digital payment methods
Chapter 09

The Cursed Chamber of Non-Intuitive Accounting Functions

“The accounting functions are just not user friendly”

-Vice President, Corporate Controller, Brokerage

Opening up about the usability of ERP systems, the VP of a Brokerage firm shared how finance management systems have a steep learning curve. It is true that one of the invisible bottom line wreckers is the cumbersome user experience within accounting systems. There’s a fine line between adopting a new financial management system and making sure that your AR team understands it well.

As a result, business agility suffers from silo-ed workflows that hamper smooth AR functioning. Complicated, heavy, and linear user interfaces in accounting systems add to your finance teams’ challenges. Rigid accounting modules make it difficult to customize the systems to meet your business needs.

How is your bottom line taking the brunt?

  • Manual, time-intensive, and complex workaround
  • Lost productivity

The Potion: Improve Business Agility with an Intuitive UI and Dashboard

  • With a well-designed user interface, analysts can navigate the system smoothly, curbing any potential delays in operations.
  • At HighRadius, we offer our customers a solution that provides all the necessary information without
    overwhelming the user. Equip your finance teams with a platform that they can use with ease. This will help in improving the dependability and responsiveness of the system.
Intuitive UI

Charms of Smart AR Automation to Achieve Cash Excellence

Putting things into perspective, it’s crucial to understand the strengths and weaknesses of your business operations in order to optimize them. Hearing about the shortcomings of AR functions first-hand from finance leaders, it’s clear that businesses realize the gaps and are willing to optimize their existing financial functions to accelerate growth. Learn more about the questions you should keep in mind while adopting an AR automation solution.

At HighRadius, we offer our customers a cost-effective, fast and easy to deploy, and functionality-rich solution with great ROI. Built to seamlessly complement ERPs such as NetSuite, Sage Intacct, and Microsoft Dynamics, RadiusOne AR helps your business optimize cash flow operations and focus on business expansion and growth. Get a demo of RadiusOne AR Suite for your business today.

The Magic Wand: HighRadius Advantage

HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company that leverages Artificial Intelligence-based Autonomous Systems to help 600+ industry-leading companies automate their Accounts Receivable and Treasury processes. Processing over $2.23 trillion in receivables transactions annually, HighRadius solutions have a proven track record of optimizing cash flow, reducing days sales outstanding (DSO) and bad debt, and increasing operational efficiency so that companies may achieve strong ROI in just a few months.

  • 1600+ Finance Transformation Projects
  • $2.23 Tr Processed Across mid-market & enterprise companies
  • 92+ Countries Truly Global SaaS with Users Around The World
  • 77%+ CAGR Global-ready end to end platform

Securing a Scalable Future

HighRadius is dedicated to providing solutions across the different stages of business growth. Starting with SMBs having a single ERP system, two to five FTEs, to enterprise-grade companies that have multiple ERPs and dedicated FTEs for handling different operational functions and global implementations, or Fortune 100 companies with shared services and multiple business units – the company caters to every business need. HighRadius’ scalable approach to the Order to Cash portfolio of solutions ranges from the RadiusOne AR Suite to the Autonomous Integrated Receivables Platform.

Securing a Scalable Future

Why RadiusOne AR Suite?

The RadiusOne AR Suite by HighRadius is a complete accounts receivables solution designed for mid-sized businesses to put their order-to-cash on auto-pilot with AI-powered solutions. It leverages automation to fast-track key accounts receivable functions including eInvoicing & Collections, Cash Reconciliation, and Credit Risk Management powered by RadiusOne AR Apps to improve productivity, maximize working capital, and enable faster cash conversion.

RadiusOne | HighRadius

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Automate invoicing, collections, deduction, and credit risk management with our AI-powered AR suite and experience enhanced cash flow and lower DSO & bad debt

Talk to our experts

The HighRadius RadiusOne AR Suite is a complete accounts receivable’s solution designed for mid-sized businesses to put their order-to-cash on auto-pilot with AI-powered solutions. It leverages automation to fast-track key accounts receivable functions including eInvoicing & Collections, Cash Reconciliation, and Credit Risk Management powered by RadiusOne AR Apps to improve productivity, maximize working capital, and enable faster cash conversion. Affordable, quick to deploy, and functionality-rich: it is pre-loaded with industry-specific best-practices and ready-to-plug with popular ERPs such as NetSuite and Sage Intacct. The HighRadius RadiusOne AR Suite is designed to automate labor-intensive processes while streamlining credit and collections activities for faster AR processing, better cash flow and improved profitability.

Lightning-fast Remote Deployment | Minimal IT Dependency Prepackaged Modules with Industry-Specific Best Practices.

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