It’s always astounding to me when I come across companies with aging AR that are not taking advantage of technology, especially when it comes to pushing their processes to the cloud to lessen their days sales outstanding (DSO).
What does DSO have to do with collections? Everything, from enabling a healthier cash flow to more accurate forecasts and improved data. However, to realize these key advantages, the financial arm of any organization must stick its head in the cloud – and keep it there.
According to an article in The Wall Street Journal featuring research from Deloitte, the digital revolution presents significant opportunities and challenges: “Exploding volumes of structured and unstructured data contain insights that could transform business and operating models. By harnessing digital technologies and enhancing existing analytics capabilities, finance could become the enterprise’s go-to source for strategic advice. At present, however, many finance organizations struggle with the data they have, lacking the technologies and skill sets to capitalize on this opportunity.”
Clearly, companies must fast-forward and embrace the cloud and even machine learning. There was an interesting article last year in Forbes that validated this concept – and that’s when machine learning was just starting to become talked about: “Rather than eliminate the human workforce in accounting firms, the humans will have new colleagues – machines – who will pair with them to provide more efficient and effective services to clients. Currently, there is no machine replacement for the emotional intelligence requirements of accounting work, but machines can learn to perform redundant, repeatable and oftentimes extremely time-consuming tasks.”
Heads of AR and Accounting
Most often, heads of AR and accounting professionals tell me many organizations are hesitant to put their processes into the cloud because they think they’ll put their data at risk or simply don’t have the AR staff to support the effort.
Those are valid reasons, but I have good news. We’ve found there is no safer environment for data and information than the cloud; often, it’s not the cloud itself that’s at fault for data loss or ID theft; it’s human error that’s causing the problem. And, as far as AR support goes, wouldn’t you rather have your staff focus on serving its customers than chasing down unpaid invoices?
Every AR department knows the number one task bogging down its collection efforts is the task at hand: manually managing the information. There’s nothing worse than using static spreadsheets or systems that do not integrate across the company with accounting systems and processes. And, instead of using pure guesswork to figure out aging AR, wouldn’t it be better to have a system that can actually predict payment?
Look at it another way. We’ve all seen examples of companies in which departments, let alone individuals inside the organization, talked with each other to improve its AR. Instead, AR staff spends more of its time chasing down the payment focusing on how to provide analytic insights to everyone in the organization, from executive management down to the sales staff and even the admin level.
Whether you’re convinced its time to move the cloud or just want to evaluate your AR system, I encourage you to download our checklist, “Top 7 Features Every Automated AR Solution Should Have.” Ultimately, the decision is up to you and your company, but you should thoroughly vet your choices and proceed when you feel the time is right. I know the time is right to get into the cloud.