Why CFOs should invest in accounts receivable automation

Corporate finance teams across all industries have a lot to juggle, especially as accounts receivable (AR) functions embrace new solutions for invoicing, payment acceptance, reconciliation, and collections. Manual and paper-based processes are a thing of the past; survey research* shows that the majority of CFOs are prioritizing AR automation to streamline financial operations and improve invoice tracking. Getting control of this “order-to-cash” process is critical for business resilience and growth; this includes improvements to credit management, billing, dispute resolution and other aspects of the AR ecosystem.

What are the top challenges for AR teams?

Though many business leaders emphasize the importance of payments acceptance automation, few have done it. Research from American Express* shows that only 17% of businesses have fully automated their payments processes. To reap the benefits of AR automation, CFOs must correctly diagnose and address the top receivables challenges in their organizations. Research from BillTrust* identifies three looming obstacles for many businesses:

1. Data visibility

Finance teams often struggle with poor data inputs, incomplete integration of data streams, and lack of real-time tracking tools. This results in an unclear picture of financial health and cash flows for the organization -- in turn, slowing down important decisions and resource allocation.

2. Posting timeliness

Financial reporting slows down when AR teams depend on manual and paper-based processes. Finance leaders cannot make timely decisions about cash flow management if invoicing, payments acceptance and reconciliation are inefficient.

3. Cost control

In financial operations, time is money. The longer that AR teams spend on manual payment acceptance and invoice reconciliation, the more costs pile up from surplus staffing, compounding errors and hidden opportunities for improvement.

How to improve AR processes in a rapidly evolving financial world

Shuffling paper invoices and checks is inefficient on its own – but adding in massive changes in the financial ecosystem makes things even more complicated. Over the last decade, financial players have added and expanded payment rails (like ACH, FedNow*, and RTP) to give consumers and organizations more ways to pay. While these payment options may increase the likelihood of purchases across segments and industries, they also complicate the back office for AR teams; accepting payments from multiple rails makes it more difficult to share data among systems, post transactions in a timely fashion, and control costs associated with each. CFOs must invest in digital AR solutions that allow their organizations to accept all types of payments seamlessly and integrate payment management into a single view.

Second, integrating systems within organizations has become top priority – streamlining operations, finances, strategic execution and more in massive ERP platforms*. Whether your organization uses SAP, Oracle, Salesforce, or others, it is imperative that all data streams are accurately set up and integrated to create clear visibility on the status of orders, invoices, collections and reconciliations. Failure to properly implement and manage an ERP system can generate massive inefficiencies -- with ripple effects that can slow down AR processes and drive-up operational costs. That’s why it is important for finance leaders to have a seat at the table for all ERP implementation and transformation projects – ensuring that all processes and integrations can capture AR activity and cash flows with precision.

Lastly, organizations that undergo digitization efforts* in their financial operations must approach the process carefully – improperly migrating from manual to digital systems can create inconsistencies, fracture communication between stakeholders, and waste integration resources. Finance leaders have to approach these transformation projects* with accurate assessments of the current state of their data and include the right stakeholders to successfully digitize accounts receivable.

CFOs have a lot of obstacles to overcome as accounts receivable needs continue to evolve; investing in the right solutions and processes can help achieve true end-to-end automation.