What’s the Future of Accounts Receivables?

This article is sponsored by BlackLine. All business and finance processes have been impacted by digitalization and automation. Next up is artificial intelligence. Learn more about how to drive intelligent automation using AI by downloading the whitepaper “Survive, Transform & Accelerate: Your Blueprint for Success Using Intelligent Automation.”?

The way of finance processes is all going in the same direction. First, we digitalize. Then we automate. Lastly, we power it up with artificial intelligence. This is how we create the “intelligent finance function” or Finance Function 4.0, as I have termed it—a function enabled by technology and driven by people.?

Lately, we have discussed how one of these processes, accounts receivables, can be digitalized and automated and used to drive a better customer experience and higher customer satisfaction. In many ways, this is the future of accounts receivables—a process taking its place in the intelligent finance function.?

It’s the story of a transformation of a dusty, old, and broken process involving lots of headaches to a now almost automated inflow of cash in your company. It’s also a story of how Finance, enabled by technology, can free itself from transactional processes and use the freed-up time to generate new customer insights that will inform better decision-making. It’s a great success story if you ask me!?

A Showcase for the Future of Accounts Receivables?

Granted, all companies might not have arrived in this great future yet. Some are still on the journey while others are considering how to best get started. Hence, let’s create a small showcase for how the future should look.?

Here are some of the considerations you should make for each step in your accounts receivables process:?

• Cash application—automate the application of payments to invoices faster and more accurately, providing visibility and control with less manual effort
• Credit and risk management—apply a dynamic customer segmentation and be alerted whenever a customer profile changes, e.g., they do more business with you or change their payment pattern
• Collections management—leverage pre-built industry-leading collections strategies and include all data about a customer to decide on the collections process
• Disputes and deductions—swiftly record and monitor disputed transactions and integrate disputes data into your CRM system
• Team and task management—prioritize actions across the team to get the maximum impact and measure the effectiveness of your team vs. their productivity
• AR intelligence—analyze customer behavior and patterns to inform data-driven decision-making about individual customers and segments

There are a lot of considerations to make to create the intelligent accounts receivables process, however, many companies have already done it. There’s no need to worry about if it will work (for your company). Believe me, no company is so special that it couldn’t apply already built solutions.?

It’s time that we move from “can it be done?” to “how can we do it and when can we get started?” Especially considering that accounts receivables is a process that touches your customers. The worst thing that can happen is that Finance and a finance process sour the relationship with your customers. It doesn’t mean the customer is always right, but the customer is still the customer. The intelligent accounts receivables process will let you collect your cash AND improve the relationship with your customers. It’s a win-win situation!?

What Should You Do Now??

We all have a different starting point but there are multiple actions you can take to get an idea about how you are currently performing and what you can do to improve. Here’s a simple list of ideas:?

• How is your DSO currently vs. your target?
• What does Sales say about your process?
• How has the cost of the AR team developed vs. the total cost of Finance and total revenue?
• Benchmark yourself against other companies in your industry
• Interview a few customers to get their take on how you handle things
• Speak with vendors about how they would re-design your process

The list is not exhaustive by any means but should be enough to get you started and point you in the right direction.?

Are you satisfied with your current accounts receivables process? Do you get frequent complaints from customers or other functions? What thoughts have you had about creating an intelligent accounts receivables process? In short, are you ready to up your game on accounts receivables?

You can read previous articles and posts from my collaboration with Blackline below:

• What would you do with 20% extra time?
• A Week In The Life Of An Accountant Post Finance Transformation
• Intercompany accounting headaches
• 4 Best Practices To Achieve Intercompany Accounting Excellence
• Cash in bank = cash in hand, right?
• Your post-transformation plan
• The trillion-dollar opportunity
• The Technology-Enabled Accounting Team of the Future
• Automating the AR process
• How To Drive Value Creation With Automated Cash Application
• How To Automate Accounts Receivables
• What does it take to create a good customer experience?
• Cash Is King, But Not at All Cost, Right?
• Accounts receivables as the catalyst for digital transformation

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box”?where you set the ambition for your transformation. You should join the?Finance Business Partner Forum?which is part of Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on?Twitter.

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Anders Liu-Lindberg?is the co-founder and a partner at the?Business Partnering Institute?and owner of the largest?group dedicated to Finance Business Partnering?on LinkedIn with more than 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company?Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a?long-time Finance Blogger?on LinkedIn with more than 65.000 followers and 150.000+ subscribers to my blog. I am also an advisory board member at?Born Capital?where I help identify and grow the next big thing in #CFOTech.