8 useful tips for implementing technology in financial operations
There has been a lot of debate about how automation can help technology in financial operations. In fact, 42% of those who responded to our survey mentioned that implementing new or improved technologies to drive efficiency will be one of their top priorities in 2021, which means the word has spread: automation has changed the world. play.
Solutions powered by artificial intelligence and machine learning are helping our teams be more productive and competent by giving them the ability to focus on key business drivers, rather than routine tasks that tend to steal inordinate amounts of time from their working hours. This significant percentage of respondents who say that the implementation of new technologies is a top priority for this year suggests that carrying out this effort is crucial, now more than ever.
You may still wonder if the time is right for your organization. Incorporating new technology in financial operations is not an easy task. What are some key metrics that could help you determine when it’s time to prioritize a collaborative approach to incorporating a new ERP solution?
Here are some ways to determine if your technology solution is holding you back:
1.The data still lives in several isolated places, which leads to manual reporting.
By now you know that data silos exist in almost every industry, and it’s something that most financial professionals know needs to be addressed. When there are silos of data, it is almost impossible to get a complete picture of any situation. The consequence of data silos is a lack of knowledge of the touch points; Sometimes your team will also face conflicting data when cross-checked across different sources, resulting in an inability to trust decisions and results that are made based on what may appear to be unreliable data.
2.You lack automated metrics or ratings to help assess employee risk, so you have trouble with credit evaluations or creating a collections strategy.
Technology automation is a differentiator from manual processes and can dramatically improve operations, revealing details that can be overlooked in a static or even isolated environment. Automated scoring allows your team to properly assess your associates’ credit and payment risk. Your financial operations technology stack will reveal data and insights on payment behavior, giving your team a streamlined workflow that supports their daily tasks. For example, the system can automate emails to delinquent customers, improve credit decision making, and in some cases provide a customer payment portal, creating the service experience that B2B customers have come to expect.
3.You have automated some simple decisions, but without advanced functionality you cannot consider your automated system to be truly “smart”.
Once you’ve implemented automated scoring models, the next stage in your automation development is to take advantage of machine learning . An AI-powered system, with some programming, learns from patterns as they are established and will eventually perform tasks on behalf of your team. Here, AI can use algorithmic models built from historical data sets and apply the models to new data sets that are fed into your system (through transactions or interactions).
Find a configurable solution that allows you to assemble components together (for example, credit assessment, EIPP – Electronic Invoice Presentment and Payment -, cash request) to match your team’s current ability to incorporate new technology solutions. Over time, that configurable solution can evolve into a fully automated credit-to-cash platform, when you’re ready.
4.Workflows stop at financial management and are not connected to accounts receivable or are handled by the team rather than your technology solution.
Often times, integrating a complete credit-to-cash solution seems daunting, and for some, it makes more sense to implement one part before the other. Starting with a priority area can be helpful to get started; however, over time, the returns from a fully connected solution are optimal.
Adopting a fully connected solution, or a complete credit-to-cash platform with embedded third-party data, is seen as a robust, top-of-the-line approach. Once you have all the components working together, your system can learn from all the actions and interactions and can then drive the workflow, moving between these applications, allowing for further optimization.
In addition, the platform can detect nuances. For example, you register and recognize customers with a certain combination of ratings (based on global business data), remember that they tend to pay within a certain period of time and then, based on a hypothesis derived from these indicators, places those customers within a recommended payment strategy. In addition, as these periodically updated indicators continue to verify the hypothesis, or as they change it, the system will assimilate the information and use it to adjust the result suggested above, resulting in a continuously optimized workflow.
5.The means of payment are not integrated and customer payments are still processed manually.
Unfortunately, the custom of manual and paper billing is not only outdated, it is also likely to cost your business more than you think. Additionally, the likelihood of inaccuracies is higher because manual processes are prone to inaccurate data entry, duplicate entries, or surcharges, which could affect not only your relationship with customers, but also inventory or sales figures. sales, as well as reported gains and losses. The increased productivity gained by implementing an EIPP – Electronic Invoice Presentment and Payment – can save companies thousands of dollars annually when calculating hourly wages.
Offering online bill payment also makes it easy for your customers to pay you and gives them up-to-date account statements, as well as the ability to track orders, manage their profile, and communicate with your business. This improves the customer experience and can greatly improve customers’ ability to make payments on time, request documents and statements, and resolve issues more quickly.
6.Part of your work is outsourced.
It is more expensive to outsource. On top of that, your team will have less control and responsibility. Organizations often rely on outsourcing because manual tasks hinder the team’s ability to focus on strategic initiatives. With the advent of automation, which has been vastly improved with AI-driven intelligence, we have almost eliminated the need to ship this work overseas, thus regaining complete control and responsibility of the process internally while providing the opportunity to our team focus on projects, customer service and other key factors for the business.
7.Accounts receivable processes drag on and the number of invoices 90 days late becomes difficult to manage.
If your team groups reports of delays and classifies by days due (DPD), it is very likely that cash flow is affecting collections and hampering forecasting. Using financial trading technology that automatically generates these reports can quickly help you solve this process and increase efficiency. Segmenting accounts by risk, not only based on the current invoice, but also taking into account historical performance and payment behavior with other companies, can greatly help to prioritize high-risk accounts and reduce days of delay (DPD).
While credit reports from agencies like Dun & Bradstreet are beneficial and have long been considered a best practice, when possible, look for a credit-to-cash solution that has built-in credit intelligence. Combining third-party data with your internal data creates the strongest view of what to expect from your customer for the most accurate risk assessments. Are they paying others on time and not you? Perhaps your client has defaulted on multiple accounts. Knowing about corporate hierarchies and other qualifications can help provide a more holistic view that gives your finance team the opportunity to have a more meaningful and productive conversation with your client.
Additionally, a credit-to-cash solution with integrated global data enables real-time account monitoring and can provide up-to-date expectations for the performance of your accounts receivable. This type of solution allows benchmarking with others in the industry to help you gain visibility into a customer’s payment behavior elsewhere and use that information to consider whether you want to extend credit or offer additional services.
8.Your collections team spends more time looking for information than talking to customers.
Aging accounts receivable can affect cash flow. When tracking the most up-to-date information requires more of your team’s time of day than its ability to actually connect with customers, this is definitely a sign that new technology is needed to remedy the situation. Old accounts often require connection and relationship to resolve and, as we all know, relationships cannot be rushed and extenuating circumstances, especially during times of crisis, such as a pandemic, are understandable. Understanding the seriousness of the situation cannot always be achieved without a conversation.
Therefore, having robust data that shows trends over time, collects and generates ratings, and uses artificial intelligence to develop a collections strategy is an integral part of developing a system that empowers and enables your team to work directly with the clients who may require additional attention from time to time.