In the midst of a year marked by unpredictability, finance teams are facing a daunting challenge: striking a delicate balance between achieving longevity and pursuing growth objectives.
The rapid impact of technology and the growing emphasis on achieving a work-life balance weigh heavily on the minds of finance teams across industries. Despite the grueling workloads experienced in the second half of the year, these teams are determined to achieve success at an organizational level. However, to navigate through these complexities, companies must rely on motivated employees armed with the appropriate tools and resources.
Uncovering the Problem
Despite their success-oriented mindset, most Chief Financial Officers (CFOs) find themselves in a perpetual state of catch-up. As they engage in discussions concerning the future, encompassing aspects such as the economy, technology, labor, and work environments, a significant revelation has emerged. The annual State of Digitization in B2B Finance report, conducted by VersaPay and encompassing insights from 300 CFOs, disclosed a concerning reality: a considerable 77% of CFOs acknowledge that their finance teams are not up to date on their account receivable (AR) processes.
One of the key issues identified is the need for better technology for finance teams. Accountants are more likely to join and stay with a company that offers advanced technology solutions. Allocating resources toward such tools can significantly benefit finance teams overwhelmed by AR processing tasks. With the anticipation of increased transactions due to meeting sales growth goals, finance teams that cannot handle their AR demands may be outpaced and overwhelmed by the company's growth.
VersaPay's research revealed that a substantial percentage of finance teams process a high number of invoices per month, with some dealing with over 2,500 invoices each month. These processing volumes, coupled with delays in AR processing, can severely limit a CFO's greatest tool, working capital, thus hindering growth efforts.
To address these challenges, many finance teams have recognized the importance of collaboration. As per the research conducted by Versapay, an overwhelming majority of CFOs (96%) are of the opinion that their accounts receivable (AR) teams could significantly enhance their productivity by fostering greater collaboration with the organization's accounts payable department and internal teams.
Impact of Communication on AR Teams
The effectiveness of workflows and the communication channels within them might hold the key to understanding why AR teams are struggling to stay on track. According to a survey of CFOs, a significant 27% attributed payment processing or collection issues to communication problems. Remarkably, almost 20% of CFOs acknowledged that more than half of their payment-related challenges stem from communication issues.
In addition to managing their regular tasks and playing catch-up, AR teams find themselves dedicating substantial time to handle disputes. Around 82% of executives revealed that their AR teams spend over half of their workdays dealing with invoice disputes, while an equal percentage reported spending between a quarter and half of their workdays resolving these conflicts.
Addressing communication inefficiencies may offer a solution to these process delays. CFOs are advised to apply the same level of effort they invest in improving internal communication to interactions with customers. By fostering productive and seamless communication between customers, and sales representatives, and utilizing technology to streamline invoicing processes and access necessary customer information, finance teams can significantly reduce the back-and-forth of information requests, ultimately expediting invoice payments. An astounding 91% of CFOs mentioned that their teams occasionally, often, or always need to request additional information from customers when handling billing escalations.
Technology Expectations of CFOs on the Rise
Data reveals that despite a commitment to invest in fintech products, many finance leaders express disappointment with their existing tech stack's performance in processing invoices. Approximately 74% of CFOs surveyed by VersaPay believe their systems could do more or require a major upgrade, while only 24% feel satisfied with their technology's capabilities for invoice processing.
Interestingly, the dissatisfaction with technology stems not from its functionality but rather from its consistent inability to address common issues. Versapay's findings indicate that 19% of CFOs encounter daily problems that their current processing systems cannot handle. Moreover, around 80% of CFOs report facing these challenges multiple times a month, with 53% experiencing them several times a week.
As finance teams strive for efficiency and growth, the need for improved fintech solutions becomes evident, ensuring streamlined and effective invoice processing to tackle the ongoing issues successfully which gives emphasis on the leverage on the use of Artificial Intelligence (AI) with Accounts Receivable software.
Key Advantages of Accounts Receivable Automation
AI technology on AR software helps businesses improve their accounts receivables processes. AR automation simplifies tasks such as invoicing customers and sending notifications for overdue payments and offers a range of benefits that warrant closer examination:
Enhanced Efficiency for Collections Teams
Cost-Effective Solution for Optimizing Cash Flow
Accurate Cash Flow Prediction Made Easier
Improved Customer Relationships and Satisfaction
Enhanced Data Security and Compliance
Below are some of the top-rated Accounts Receivable software options:
1. Reconart Software
The software consolidates both accounts payable (AP) and accounts receivable (AR) reconciliations into a single tool, automates the matching of incoming payments to open invoices, and swiftly detects any actual discrepancies during accounts reconciliation, posting them to your ledgers without delay.
This software offers automatic synchronization of bank feeds, efficient management of recurring invoices, and convenient cost tracking. Additionally, it provides easy-to-use and customizable invoicing features with online payment capabilities.
The software offers an all-in-one integrated system encompassing ERP, financials, commerce, inventory management, HR, PSA, supply chain management, and CRM. It caters to fast-growing businesses in various industries, providing comprehensive support.
4. QNE Accounting Software
Amidst this time of crisis, QNE Accounting Software emerges as the ideal solution for companies seeking an online facility to efficiently manage their daily transactions.
5. Sage Intacct
Sage Intacct offers cloud-based financial management and accounting software, catering to small to midsize accounting firms. The platform provides essential features such as financial reporting, operational insights, and the automation of vital financial processes.
Finance teams have demonstrated their determination to achieve success while balancing longevity and growth objectives. To overcome the hurdles they face, collaboration and improved communication are essential, alongside a strong emphasis on adopting advanced technology solutions. Accounts Receivable (AR) process automation, especially leveraging Artificial Intelligence (AI), can be a game-changer, offering enhanced efficiency, cost-effectiveness, accurate cash flow prediction, improved customer relationships, and heightened data security and compliance. By embracing these changes, finance teams can position themselves for sustained success in the ever-changing business landscape.