Advice & Best Practice

Those that don’t automate their financial processes in 2021 will get left behind

By Anthony Venus, CEO of Yaypay

Accounts receivables (AR) is often a misunderstood department. Not only is AR all about financial operations and collecting money, but it is also at the coal face of customer relationship management. It turns out that managing these credit-based relationships becomes even more important in economic crises. Covid has brought a fresh urgency to AR, and in recent months we’ve seen that AR is not only critical to business growth but also survival.

The pandemic has wreaked economic carnage on business and society. Cash has truly become king, and companies have scrambled to shore up their liquidity in a bid to survive, often tapping government support schemes. But they also need to get their invoices paid in a timely manner, while navigating the delicate fact that many customers are navigating their own financial challenges.

Companies we have spoken to tell us that AR has become a C-suite issue with chief executives closely monitoring debtor days and asking for daily updates. But AR teams have had a tough time of it. Businesses that still rely on spreadsheets, paper files and physical reconciliations all performed from a central location have struggled to work separately from home. Chasing down late payers by phone is traditionally an antagonistic affair made harder with customers working from home, and errors can sour an important relationship. This has only become more challenging during the downturn.

These ‘analogue’ pain points served as the tipping point for some companies, who have used the pandemic as a reason to speed up the automation of their business processes. In fact, software group Twilio estimates that six years’ worth of business digitalisation has been crammed into just a few months. Effective SaaS tools have finally freed AR teams from the tyranny of office-based working. Financial controllers have seen that it really is possible to manage the AR functions of an entire company, from your kitchen table with a laptop.

The automation of financial processes such as AR has become a necessity. The mass adoption of remote working and the need to reduce costs means that companies must make finance functions more agile and efficient. Those that fail to automate in 2021 will be at a competitive disadvantage, forced to dedicate more manhours to AR and wait longer to get paid less money. Here’s why:

More effective cash collection

Getting paid can be an emotional process that’s prone to human error such as lost invoices, incorrect balances and missing information. These errors can strain client relationships. But clients can also be slow to pay up, especially during a downturn. Debts can turn ‘bad’, punching a hole in a company’s balance sheet and threatening insolvency.

Automated processes driven by artificial intelligence (AI) can do a more efficient job than humans in executing routine communications and tasks while at the same time keeping customer engagement consistent and on message. AI processes can also help companies manage credit risk in real time. AI is also getting better at correctly reading the emotion and tone in client emails: spotting subtle annoyance, stalling tactics, and acting on it through automated messaging. That can make all the difference in ensuring you are front of line for getting paid.

Recruitment edge 

More and more companies are offering flexible working, having quickly adapted to a new way of operating through the pandemic. This is also increasingly seen as a way to maintain an edge in the job market, with talent seeking flexibility. Three quarters of companies surveyed by the Institute of Directors said they plan on maintaining home working, and more than half intend to reduce their long-term use of workplaces. Companies that cannot manage financial processes from home with a decentralised team, stand to lose out.

Smaller payroll

Automating back office processes reduces manhours and improves productivity: you can do more with less. Companies looking to control cost during the economic downturn will want to keep a lid on headcount. Many have also seen the volume of transactions increase with the value per transaction significantly down. Companies we speak to that have managed to increase their revenues through the pandemic say that automating their accounts receivables process means they haven’t had to take on more staff to deal with the added invoices, collection and managing credit risk. They empowered their existing team to scale with smart and efficient technology.

Laggards’ risk

Many companies began their digitisation journey well before Covid struck. The pandemic means that this transformation is no longer simply a ‘nice to have.’ In the accounts receivable department. Laggards that continue to rely on paper or excel based manual processes and that fail to leverage automation to re-engineer the financial and customer processes risk losing their competitive edge.


Byline by Anthony Venus, CEO of Yaypay

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