Emerging Technologies in Accounts Receivable - Novelty or the New...

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Emerging Technologies in Accounts Receivable - Novelty or the New Fintech Frontier?

By Carolyn Etress, Director of Accounts Receivable at EBSCO Information Services

Carolyn Etress, Director of Accounts Receivable at EBSCO Information Services

Let’s be real. Accounts Receivable is at the end of every value stream under the sun. Often, AR is the proverbial junk drawer in a business. It is going to take some time to sort out. It is not top-of-mind, and it is not exciting, not until now.

"Artificial Intelligence is the software that can learn, plan, and solve problems"

We all have a general understanding of artificial intelligence. In broad, simplistic terms, it is software that can learn, plan, and solve problems. We have been using artificial intelligence in business for longer than we probably realize. We are using it in the sales process to target the right clients, in the customer management space to understand and enable customer satisfaction and success, in manufacturing to improve the scheduling of jobs and predict safety issues, and in finance to understand and predict variances and trends in expenses, customer buying behavior and profitability.

Why are solutions specific to accounts receivable creating such buzz in the fintech world these days? The answer is simple. Now that we have addressed many of the upstream opportunities created by these powerful technologies, it is time to address opportunities downstream within accounts receivable.

Providers recognize gaps in offerings in the accounts receivable space, and they are filling these gaps with new, thoughtful, and imaginative solutions addressing challenges around credit management, customer onboarding and tax certificate management, invoice presentment and payment, deductions management, payment processing solutions, and more.

The exciting thing is, there are significant opportunities in the processes I mentioned, and most CFOs do not realize these opportunities exist. For decades, we have been throwing people at challenges in accounts receivable. What if we could effectively manage credit risk and accelerate viable sales without requiring back-office staff to conduct a legal deep-dive into every new prospect? What if we could go from 60% compliance to 98% compliance in terms of sales tax exemption management, reducing our audit exposure without bringing in temps or assigning staff to a special project? What if we could leverage solutions which enable us to reduce the number of people processing our payments by 50%? What if our collections teams put zero time and effort into prioritizing accounts for collections and instead spend 95% of their time engaging the right customers (and not the wrong ones) to collect our AR, effectively reducing our DSO and reducing our cost of capital? The solutions are available to us right now, and they are sustainable.

What about the people who are doing this work today? This is a reasonable question. The truth is, our society has evolved to a point at which most people are not fulfilled by working through a spreadsheet with thousands of line items, touching every item along the way, checking boxes, and proving that they completed tasks. People are satisfied when they feel they are making good decisions and having a positive impact on their business or society. These solutions bring about an opportunity to advance our workforce and transform our office culture.

If we are honest, we are not satisfied with the tedious and retrospective way most accounts receivable teams are working today. We are less interested in what has been done and more interested in what is likely to happen. So, why would we remain in this retrospective rut?

The time has arrived. We should identify our accounts receivable opportunities, rank our opportunities, find the right partners for our businesses, and improve our bottom lines.

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