Today’s CFO understands the crucial role of technology plays within their business. They rely on ERP software to capture financial transactions and business intelligence software to make sense of the data. They implement CRM software for sales and they may even automate accounts payable. But few CFOs have automated accounts receivable beyond simply sending invoices to customers electronically, and the struggle with timely A/R collection performance continues.
According to credit insurance provider Atradius, most businesses get paid in 61 days on an average of 28 day credit terms. That’s more than twice the agreed upon credit terms which significantly limits access to working capital. But there is something you can do about it. Accounts receivable automation has advanced rapidly in recent years and there is a now new breed of applications that more and more CFOs are adopting to drive truly amazing credit collection results for their businesses.
Case in point is Systems Maintenance Services, a provider of IT asset management and support services. The company serves larger businesses globally including about 80% of companies on the Standard & Poor’s 500. Systems Maintenance Services implemented accounts receivable automation software in 2012. In just the first year they were able to get paid 27 days faster collecting more money than they invoiced that year as they were able to collect on past due balances from prior years. Further, the company was able to reallocate 50% of one credit manager’s time to other activities despite experiencing exponential growth at the time.
MSPARK, a national provider of direct mail and digital marketing services implemented Anytime Collect accounts receivable automation software in 2013 to manage a growing customer base and increasing volume of invoices. Within just a few months of using Anytime Collect MSPARK decreased DSO by 26% and reduced past due invoices by a whopping 88% achieving significant reductions in accounts receivable labor and staffing costs.
So how did they do it? Both companies committed to investing in technology to automate their processes to resolve their business issues and both companies took a measured approach to ensure that they achieved their goals.
Accounts receivable management and invoice collection is by nature a manual process, but it doesn’t have to be anymore. In the past, accounts receivable departments have been slow to innovate, but the tides are turning as more companies reap the rewards of process automation, such as:
• Accelerated cash flow
• Reduced invoice inquiries
• Easy access to working capital
• Improved customer experiences
• Increased operational efficiencies
• More.
NEXT STEPS
If you are interested in learning more about accounts receivable KPIs and how to increase cash flow with technology contact us to learn more about collect-IT. To speak with the Dynavistics Sales team call us at 813.642.7230 ext. 409 or email.
(This is an edited excerpt from a blog originally posted on the Anytime Collect blog on July 24, 2015)