An Insider on Shifting to a Strategic AR Mindset

PYMNTS interviews Murray Sharp, vice president of partnerships, channel sales & business development at Billtrust, about why the current economic environment requires not merely an AR upgrade but also a major shift in operational strategy.

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The current economic and business environment is pushing companies’ buttons in more ways than one. According to a recent study by Billtrust, the biggest influences on businesses right now are inflation pressure, the need for financial resilience and the increasing unreliability of supply chains. These forces are driving more and more companies to one inescapable conclusion: Automation of their AR and AP processes is do-or-die.

“Certainly, stubborn inflation dominates the economic landscape and impacts markets in unpredictable ways, as do unrelenting interest rate hikes from the U.S. Federal Reserve,” Sharp told PYMNTS Intelligence. “That’s why it’s so critical to automate your systems to reduce cycle times and get paid faster.”

Unfortunately, he said, there are still many companies that have not managed to make it to the connected stage of maturity. Only 15% of respondents to the survey had a connected order-to-cash (OTC) process based on real-time data. Making the shift to digital AR is a giant leap for many, requiring a change not merely of mind but of mindset.

The impact of manual AR/AP processes on businesses’ bottom lines is direct and tangible — especially for certain verticals. A stunning 94% of respondents to the survey indicated that manual OTC processes have negative impacts on their businesses’ profitability, Sharp said. Companies in the construction industry, in particular, report that almost one-third of their AR dollars are paid severely delinquent — or more than 91 days past due. With 77% of CFOs saying that digital transformation of the OTC process is crucial to their organizations’ survival, companies are having to take a more aggressive stance on AR management.

Several technologies are showing promise in addressing these challenges. To elevate cash management to the paramount status it demands, companies need the tools that allow them to make more strategic decisions based on data and trends impacting their key performance indicators.

Sharp noted that CFOs are routinely asked to answer broad questions in real time, and accurately determining cash and liquidity on these terms can be exceedingly difficult for complex companies. Firms must therefore look for complete cloud-based software solutions that help them improve the entire OTC process in real time from end to end — credit, invoicing, payments, cash application, collections — integrated with advanced analytics and reporting to help C-level executives make better decisions.

On this front, artificial intelligence (AI), he said, is already having a tremendous impact on many financial business processes. AI has been shown to boost efficiency, help manage risk and provide predictive insights as well as improve the customer experience. However, despite the sky-high expectations for AI’s ability to turn companies around, he said, CFOs are still in learning mode when it comes to effectively implementing this technology.

Unified, collaborative AR solutions hold the key to success for businesses now. To address the current challenges and stay competitive, Sharp said, CFOs and financial leaders are tapping unified software-as-a-service (SaaS) solutions for AR. These systems bring together a range of essential tools and functionalities for AR teams in one place and are designed to streamline financial operations, enhance collaboration with B2B partners and provide real-time insights for more informed decision-making.

“A complete, collaborative suite of AR software minimizes the challenges caused by disjointed software systems — as well as by manual data entry, errors, wasted time and immature AR processes,” he concluded.