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. If you’re looking for the Day 1 Recap, you can find it here!
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 a new take on the same workflows. The exponential gains come from taking a holistic look at a given process, and reengineering it for efficiency, scalability, effectiveness and experience (customer and employee)
Takeaway 2: On deductions
- Attain Consulting Group’s 2018 Customer Deduction Benchmark Survey Results are worth a read!
- When you write off a deduction automatically and don’t dedicate time to do regular (ie. quarterly) reviews, you’re missing a major opportunity to learn and optimize (and maybe identify those customers that have found your automatic write-off “sweet spot”!)
- Deductions cannot be addressed by siloed functions - addressing deductions issues and optimizing is only done effectively by cross-functional teams
- If you want to get things done, people need to have skin in the game! Recommendations include:
- Charging back deductions to the area that owns the reason code (or, at minimum, generating a regular report showing the breakdown of deductions by area)
- Linking deductions to your Sales team’s commission (a great strategy to make sure they jump in and help you investigate and resolve effectively!)
- Trade deductions are the cost of doing business; non-trade deductions are the cost of doing business poorly!
Takeaway 3: On B2B credit card acceptance and surcharges
Some interesting CRF survey results:
- 80% of respondents accept credit cards as a form of payment for invoices
- Of those that accept credit cards, 50% accept them for all terms of sale, and 80% accept them as a form of payment for past due invoices
B2B is the final frontier for credit card issuers - an aggressive push is coming for businesses to accept them as a form of payment from their customers
The decision to accept credit cards has many considerations, including:
- The fact that it will enable to help your customers improve their cashflow (as the credit card company essentially floats the payment for them for 30-60 days)
- A surcharge program can help you elimination the significant transaction fees that you may historically have been paying
A quality portal is the key to success in this initiative:
- It will allow you to pass Level 2 and Level 3 data during the transactions, reducing fees
- Enable you to address PCI compliance issues (and offload risk if you work with a vendor partner)
- Dramatically improve the customer experience
Surcharge programs can be effective, but require forethought and top-down buy-in to the strategy and rollout to ensure viability.
These points just scratch the surface of what was covered today - but in closing, I want to leave you with a quote that really resonated with me:
“Reducing your DSO requires a change in customer behaviour.”
I love this quote, because it really cuts to the chase of how leaders are optimizing their AR function - it’s not about incremental tweaks to workflow...it’s about embracing the potential that digital transformation offers, and leveraging in every area of your business to drive better outcomes for your customers, your employees, and your business.
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