“The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic.” Peter Drucker Across industries, functional areas, and seniority, the general consensus in business today is that it’s a complicated, fascinating time to be a contributor. Norms are being challenged, rules are being rewritten, and the organizations that embrace change are finding themselves able to compete on levels that many would not have thought possible just a few short years ago. As humans, we have a natural inclination to shy away from change, and to fear the unknown - and this is why I’ve always found Drucker’s quote to be so powerful. Obstacles and uncertainty (in their purest form) are just manifestations of opportunity - and when I look at the state of the payments (especially within the context of B2B), I see a great deal of opportunity. While payment trends in the B2B will inevitably lag what is happening in the B2C space, B2C continues to be a good “leading indicator” for where things in B2B will eventually end up. (Don’t forget that, at their core, your colleagues and customers really are retail consumers who inexplicably change their expectations, habits and processes around Read More

If you’re looking for the Day 1 Recap, you can find it here! Following on the heels of Day 1, Day 2 of the CRF Fall Forum was filled with sessions that contained practical, actionable insights on key issues in the credit and AR space, delivered by leaders in the field who are setting the bar high for their peers! For ease of consumption, I’ve organized today’s takeaways thematically. Takeaway #1 - On Robotic Process Automation (RPA) and Digital Transformation By an informal show of hands, it looked liked ~30% of attendees were leveraging some form of process automation in their workflows Driving meaningful impact out of digital transformation projects requires a top-down commitment to change management, test and learn cycles, and a willingness to break from the status quo Of the digital transformation projects that fail, nearly 50% can be traced back to the human element (unwillingness to change) Robotic process automation can offer efficiencies, but is not a long-term “set and forget” solution. Changes in your toolset (e.g. operating system, website, ERP, portal) will break your RPA workflows, requiring them to be rebuilt Ultimately, RPA is a great first step towards digital transformation - but ultimately, it’s just Read More

I’d like to recognize the great work of Angela Lawson from the Federal Reserve Bank of Minneapolis, and Eric Biderman, Esq, of Arent Fox, whose session on Digital Currency drove my main takeaways from Day 1 of the CRF Fall Forum. It was a beautiful day in Salt Lake City, and the energy was apparent as members and partners gathered to kick off the Credit Research Foundation’s Fall Credit & Accounts Receivable forum. The half-day kickoff was marked by two keynote sessions - the first an overview of the Digital Currency landscape, and the second a panel featuring three bankruptcy judges discussing some of the approaches and reasoning behind US Bankruptcy Court decisions. While I won’t be able to do justice (pun intended) to the intricacies of bankruptcy law discussed in the panel, I’d like to share some of the interesting points that were discussed in the earlier session on Digital Currencies. The session opened with a straw poll around the level of effort currently being invested by attendees into investigating and evaluating the potential for digital currencies (perhaps more commonly known as cryptocurrencies). Based on a quick scan of the room, it appeared that none of the businesses represented Read More

This guest post was contributed by Ernie Humphrey, CTP, Treasury Webinars & Rachele Collins, Ph.D. APQC. An often-ignored benefit of modernizing accounts receivables (AR) processes via automation is the opportunity to engage customers in a way that directly benefits the bottom line. Happy customers pay more quickly, they pay it all, and they are receptive to suggestions on how they pay you. AR excellence is driven by the relationships that your AR team has with your customers, and those relationships are inherently more positive with automation support. Typical pain points related to key areas of AR processing include the following: Presentment—Inefficient invoice exchange Collaboration—Misalignment on invoice terms, ineligible discounts taken, and communication barriers Collections—Lack of relationship visibility (into payments history, issues, and dispute resolutions), information asymmetry, and manual tasks and notifications Payments—Delinquent payments and checks (which cost more) Cash Application—Inaccurate or incomplete remittance information Interactions with customers relative to mitigating any of these pain points matter.  The good news is that technology can directly help address these challenges. For example, customer relationship management systems can reveal what customer interactions occur across departments, central customer portals can allow organizations to coordinate dispute responses, and automated data capture of all customer interactions Read More

Running a small business is tough.  In speaking to countless small business owners throughout my career, one thing became clear – a desire to do accounting was decidedly not the motivating factor in their decision to launch a new business venture.  Expense management, time-tracking and invoicing customers are not the things that the small business entrepreneur thinks about when they are getting started. Ultimately, one of their biggest challenges becomes trying to find the time to deal with these tasks.  Fortunately, for small businesses there are many automated solutions to help them manage the accounting side of the business including their own receivables. Products like QuickBooks, Freshbooks and Jobber all help these small businesses to track their efforts and collect their money.   But what about the other side of the equation — the challenges that small businesses face in automating payment of their bills and that large businesses face in collecting from them?  In the same way that neglecting to collect payment will hurt small business because they’ll be losing out on cash flow- failing to pay their bills on time will also cause the business to suffer.  Suppliers will stop providing products,. Distributors will stop providing delivery services. Read More

As accounts receivable automation continues to become entrenched as the new standard for managing receivables, many well-intentioned leaders continue to investigate alternative solutions that don’t address the totality of the problems their teams face on a daily basis. Today, I’d like to take a look at Electronic Invoice Presentment and Payment (EIPP) with a view to the important differences between it and our automated accounts receivable platform, ARC. At a surface level, the intent behind EIPP and ARC is very similar – provide customers with a great front-end experience for the AR process, increase the number of payment options available and, ultimately, drive more efficiency out of the AR process. Unfortunately, despite similar purposes, the business impacts are wildly divergent. EIPP – The Ugly Truth Let’s assume that your customer base follows a normalized distribution curve – 1/3rd will pay early, 1/3rd will pay on or around the deadline, and a 1/3rd are (to put it nicely) “payment averse.” Under this scenario, 2/3rds of your customers have good intentions to pay their invoices – and for these segments, EIPP provides a smoother payment experience. For these individuals, we’d expect to see payments come in more quickly – and in doing Read More

As we approach the halfway mark of 2018, it’s safe to say that the challenges many faced through 2017 continue to persist this year. Between the threat of bankruptcies, customer loyalty reaching all-time lows, and the emergence of Amazon as a threat to most business in some form - success in today’s market continues to become an increasingly complex proposition. Now, I understand that some readers may look at those threats and dismiss them as irrelevant - a common reaction, I’m sure, by many of the businesses that now find themselves dealing with the fallout of the challenges identified above.   At the end of the day, business boils down to a financial transaction whereby one party provides something of value, which the other party provides economic compensation for. Simple, right? Why is it, then, that this financial exchange continues to be one of the more difficult areas for a business to maximize efficiency in? 11% of customers don’t receive the invoices you are sending (CFO.com). 52% of receivables are lost when businesses (willfully or otherwise) allow them to age past 90 days (Atradius). It’s clear there’s a problem, yet the “tools” of the trade have remained similar for over Read More

According to a report by Accenture, 90% of business-to-business (B2B) executives point to Customer Experience (CX) as a critical factor to achieving their strategic priorities. However, only 20% of B2B companies excel at CX, presenting a huge opportunity to capture new revenues by increasing focus on CX and making investments to improve. Conversely, a whopping 80% of B2B companies are at risk if they do nothing, as they will see their revenues bleed away to competitors that make the change. So you may be wondering what does CX have to do with a CFO and why should the CFO care? Isn’t CX a marketing responsibility that belongs to the CMO? Both are great questions and the answers are simple. Most CFO’s will tell you that their top priority is to act as a steward of working capital (WC) and to manage inbound and outbound cash flows, ensuring that their company can continue to operate in good standing. Inbound cash flows are revenues that will be driven largely by CX as more and more companies optimize customer experience in order to compete in a competitive marketplace. See where am I going with this? Visionary CFOs planning for the future financial health Read More

While commercial clients account for, on average, less than 15% of bank’s clients, their deposits often represent over 50% of total deposits. So why aren’t banks innovating and modernizing their treasury products and offerings to better serve this important commercial base? Driven by the need to keep up with consumer expectations around payments and mobile apps, banks have prioritized innovation around their personal banking divisions. Think of how drastically payments have changed in just a short time, with seamless payment processes of an Uber ride, P2P e-transfers, and mobile payments such as Starbucks to make consumers lives easier. Commercial Clients Are Expecting More Commercial clients are beginning to request these same innovations for their finance teams. “Why can’t we have business payments and mobile apps like I have in my everyday consumer life?” The shiny new toys in retail banking are now giving way to the need to innovate on the commercial, side as commercial client expectations are changing. In speaking with many of the banks in attendance at this year’s NACHA Payments and Finovate fintech shows, treasury departments are starting to accelerate research around commercial innovation and fintech solutions. What was “18 months down the road” is happening now Read More

I talk with commercial real estate (CRE) property accounting teams almost everyday. One complaint that I hear again and again: tenants regularly miss their rent. This may be surprisingly to most, but after a couple of years of hearing the same message day in and day and day out, I now understand why. CRE accounting teams just can’t continue to manage their collections process the same way they always have. A process that more often than not, involves a property manager knocking on the door. So how can property accounting teams start to think differently? Here are some insights on how to address this as an organization, how to begin to think about collections differently, and most importantly, to start getting paid on time. Communication is key, and not just at signing. Sign a lease, agree to the terms, and off we go. If only it were that simple. With just about every vendor or service provider comes an invoice or bill which requires payment. Real estate is unique. In most cases an annual rent statement goes out by paper with the agreed upon terms and then tenants are left to their own devices to pay. This is one form Read More

While customer-centricity, disruption and innovation continue to be keynote themes at conferences this year, teams across North America continue to power their day to day operations with the same tools and approaches they were using when the Y2K bug was dominating headlines. Today, I’d like to share some inspiration with you around the topic of optimizing your accounts receivable process, with a focus on the shift in mindset that leading companies are adopting as they prepare their teams to drive an exponentially greater impact on DSO and working capital through 2018 and beyond. Across industries, leading AR teams are prioritizing the delivery of great experiences, an emphasis on the importance of the customer relationships, and a shift towards working in real-time. Let’s unpack each of those in a bit more detail. 1. Deliver Great Experiences The reality is that the benchmark for great experiences is not being set by B2B organizations today - it’s being set by the B2C brands that have recognized that digital platforms are a primary interface with their customer base, and continue to iterate on ways to create frictionless interactions for their customers. While the accounts receivable process continues to heavily rely on offline touchpoints (printed Read More

I recently attended a convention keynote where the presenter spoke to the impact the Fourth Industrial Revolution on all aspects of business. This Fourth builds on the digital revolution, with the fusion of emerging technologies that are growing at an exponential rate. It is disruptive, especially with the recent focus on RPA and AI, with automation leading the charge in all aspects of our lives, professionally and personally. Yet when we think of one of the most fundamental areas of finance, Accounts Receivable, we still see AR teams taking a traditional approach, full of manual processes, disjointed practices, and segmented core functions, such as presentment, collections and payments. So how do these AR teams catch up, scale, and maybe even get ahead of the curve? It’s simple - they need to take a holistic approach to their AR process. Most AR departments only solve half of the receivables problem with their current resources. Here are 5 reasons that you need to take a holistic approach to the AR process: 1. Improving the efficiency of your invoice-to-cash cycle will get you paid faster. As an AR team, DSO is likely one of your strongest - and most feared - metrics. When Read More