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Unlocking the Potential of Accounts Receivable in 2024

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In the ever-evolving landscape of finance, Accounts Receivable (AR) is undergoing a transformative journey, emerging as a strategic player in the financial ecosystem. A recent survey conducted by Treasury Webinars on behalf of BlackLine details the current state of AR and provides valuable insights into the challenges and opportunities that lie ahead.

The Rising Strategic Role of Accounts Receivable

The global pandemic, changing supply-chain dynamics, and geopolitical uncertainties have propelled AR into a more strategic role. According to the survey, 77% of AR teams now capture the attention of CFOs, with 16% serving as key advisors on strategic business matters. Over the past 12-24 months, 75% of respondents reported a significant shift towards a more strategic role, suggesting a continued rise in the strategic importance of AR into 2024.

Expectations for Accounts Receivable in 2024

As expectations for AR teams continue to climb, the survey indicates that 71% of companies plan to increase the responsibilities of AR teams in 2024. Days Sales Outstanding (DSO), a key metric for AR success, is expected to increase for 55% of respondents. Inflationary environments, customer-specific dynamics, and supply-chain issues are identified as the main drivers of expected DSO changes in 2024.

Navigating Relationship Dynamics in Accounts Receivable

The survey digs into the intricacies of AR dynamics, exposing the existence of silos within AR teams. While 27% of companies acknowledge the presence of silos, 32% perceive them as a non-issue. The study identifies cash application as common in AR silos, emphasizing the need for collaboration and breaking down barriers to foster efficient communication.

Impact of Technology on AR Performance

Technology plays a pivotal role in shaping the performance of AR teams. While 70% of companies report a positive impact of technology on AR performance, the choice of technology tools varies. Business intelligence tools and spreadsheets emerge as the primary tools for measuring and managing AR performance. Notably, companies leveraging AR automation tools witness the most significant impact on performance, highlighting the potential of automation in enhancing efficiency.

Investments in People and Technology

Companies are aware of the evolving landscape and expressed a commitment to invest in both human capital and technology to empower AR teams. They consider skills such as data analytics, data management, and proficiency in emerging technologies as crucial for AR team members. In 2024, 62% of companies plan to upgrade AR-related technology, showcasing a dedication to continuous improvement.

Empowering Accounts Receivable Professionals

Despite the challenges, it is an exciting time for AR professionals. The strategic role of AR is increasing, and companies are planning to invest in resources for AR teams. 38% of companies are planning to add staff and 46% are increasing professional development opportunities. Companies are focused on upgrading both technical and soft skills. AR professionals are well-positioned for success.

The survey includes actionable recommendations for businesses hoping to optimize their AR functions. These include a thorough examination of existing processes, addressing silos, and investing in technology that promotes collaboration and decision-making.

The survey not only highlights the current state of AR but also provides valuable insights for businesses to strategically position themselves in the evolving financial landscape. By embracing technology, fostering collaboration, and investing in the skills of their AR teams, businesses can unlock the full potential of AR and drive bottom-line success.

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Trends in Financial Management for Midsize Organizations

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This guest post from our partner, BlackLine, was written by IDC. It outlines challenges facing finance and accounting in midsize organizations.

Midsize organizations have several challenges that make financial operations management particularly difficult. Many such organizations operate in a very lean manner and yet are still focused on growth.  While the complexity of financial management applies equally to midsize organizations, they do not enjoy the resource availability of their larger counterparts. Thus, midsize organizations must address challenges associated with rapid growth and regulatory compliance with their limited resources.  

In this blog post, we aim to discern the evolving landscape of midsize companies by analyzing significant trends, their related challenges, and opportunities for these organizations to succeed in an ever-evolving landscape.

The following are key trends affecting finance and accounting teams at midsize organizations:

  • Talent management is becoming a financial priority. Over the past 12 months, core finance and accounting teams (accounts payable, accounts receivable, budgeting planning, auditing etc.) have quit at an alarming rate. In a recent survey conducted by IDC, staffing and labor shortages preventing effective use of technology were among the top 3 greatest concerns for midsize businesses. (Source: Future Enterprise Resiliency & Spending Survey – Wave 6, IDC, July 2023). This attrition is largely due to the combination of high pressure, heavy time commitment and legacy tools – all of which plague midsize businesses. Financial operations teams are built upon core accounting staff as a foundation; high turnover in this area can impact productivity and even the company’s bottom line.
  • Greater emphasis on dissemination of business-critical information. The rapid pace of growth within midsize businesses puts a spotlight on the communication of business information. Smaller businesses are often hampered by their inability to quickly gather business-critical information and disseminate it to their necessary stakeholders. In a recent IDC survey, communicating business and financial metrics to stakeholders effectively was cited as among the top 3 pain points by CFOs. (Source: C-Suite Survey, IDC, August 2022). As rapidly growing businesses rocket toward financial exit strategies, the ability to share real-time information with banks, investors, key suppliers is an essential element of success.
  • Demand for a more strategic/analytical skill set for finance teams. According to IDC research, 44% of CFOs said they envision more involvement with IT decisions involving finance, ERP, analytics, and so forth. (Source: CIO Advisory Board: Exploring the CIO-CFO Relationship, August 2023). The necessary skill set among financial team members will evolve to include more strategy/analytical skills. The ability to look at financial data and see the opportunities and strategic insights within the data will become an essential part of the job. Going forward, IDC believes smaller business will lead the way and combine positions like CFO and the CIO to support the business in the emerging digital first economy. 

Many of the opportunities for midmarket businesses to modernize financial operations relate to the need for speed and agility. The top reasons driving digital transformation initiatives include the following needs:

  • Improvements in productivity and process automation to decrease cost per transaction. For midsize businesses, 26% listed working late to catch up on accounting processes as their top frustration with their current system. (SaaSPath Survey 2023, IDC, March 2023).
  • Faster finance and performance insights to manage uncertainty and guide risk appetite
  • Managing the evolving regulatory compliance landscape with the lens of integrated risk and finance. More than 28% of midsize businesses spend their time on regulatory compliance working manually or in spreadsheets. (SaaSPath Survey 2023, IDC, March 2023).
  • Faster financial close period to reduce time spent on analyzing the past and instead focus on future value-added strategies. For midsize businesses financial close was one of their top 3 most manual processes (SaaSPath Survey 2023, IDC, March 2023).

Midsize businesses are very focused on technology that allows them to do more with less. Lean finance and accounting teams must be flexible and nimble. Team members have to wear multiple hats to conduct their core responsibilities. When considering change, midsize organizations must move quickly; they have neither the time nor the resources for longer optimization projects.

Driving Toward Agility & Scale in the Office of the CFO

The role of finance and accounting has evolved beyond simply monitoring debits and credits. This trend is happening the fastest in those midsize businesses where there are fewer managerial layers. These businesses tend to have greater overlap in roles and duties (e.g., the CFO also serves as the head of compliance and operations). Today’s midsize finance office and the people who manage it are being asked to do more than ever before:

  • F&A is evolving into an operational data hub. In addition to added strategic duties, F&A is becoming the key hub for many aspects of business data beyond financial including operational data, IT system data, supply chain data, ESG data, and so forth.
  • F&A is evolving into an insights hub. F&A is expected to leverage the financial systems and the latest technology to identify risks and challenges and use this information to create accurate forecasts. In addition, F&A teams are now under even greater pressure to create more detailed forecasts much more frequently.
  • F&A as an engine for growth. Today’s F&A team is expected to uncover strategies to drive revenue growth through efficient planning, accurate forecasting, and tight collaboration with other management staff.

Persistent Pain Points for the Midsize CFO

There are several places where midsize businesses still struggle today.

Lost time on mundane tasks. In the March 2023 IDC SaasPath Survey, midsize respondents (companies with between 500-1000 employees) listed “too much of the time spent on accounting duties is low-value, data-entry heavy” as their top frustration with their current accounting system. For midsize businesses, the biggest time sinks (i.e., areas where they spent the most time) were reporting/analytics, accounts receivable and the financial close according to the most recent SaaSPath Survey 2023 (IDC, March 2023). A reliance on spreadsheets figured prominently for these tasks. In addition, resource misappropriation is common due to the relative lack of resources.

Lack of accurate information. Midsize companies listed their second highest frustration with their current accounting system as “the financial reporting has a high error rate.”  Finance leaders at these companies need timely and accurate information to optimize decision making. Less than accurate data results in rework (additional validation and substantiation) that ultimately slows down the financial close process and erodes the confidence in the final output. With many midsize organizations unable to substantiate the full balance sheet, high priority accounts may require triage leading to late or inaccurate financials, or both.

Benefits of Financial Modernization

The expected benefits of financial modernization include the following:

  • The ability to harness the latest technology to scale up data management capabilities. Businesses will be able to agnostically integrate their core systems, optimize accounting processes with automation technology, and capture market expansion opportunities with budgeting and planning technology.
  • The ability to leverage the latest technology to provide flexibility, minimize costs and ensure strategic insight into an organization’s business
  • The delivery and maintenance of systems related to finance, performance, risk and compliance capabilities/functions in a cost-effective manner
  • Flexibility to meet business needs and support evolving business and regulatory requirements
  • Data at multiple levels of detail from source systems transactions to posting GL balances and financial consolidation results
  • Progressive future state transformation, leveraging existing components to co-exist in the current environment

Considerations for Midsize F&A Leaders When Evaluating Financial Technology

Think holistically. Over the past 2-3 years, IDC has seen a growing trend among financial software vendors to bring more holistic applications to the market. Recent M&A activity reflects this trend as well.

Put end users at the center. Financial applications are evolving rapidly as vendors invest research and development dollars into bolstering, augmenting, and in some cases, redesigning their applications. The applications must align with the new digital enterprise and how finance and accounting professionals adopt technology.

Look for SaaS applications that are built and maintained with trust. It is vital for enterprise application vendors to build trust in the SaaS economy including being more transparent, delivering on commitments, engaging end users, supporting customer success throughout the relationship, and helping customers achieve their business outcomes.

Advanced Technologies in Finance & Accounting

As finance and accounting departments move into the digital-first economy with a focus on agility and scalability initiatives, the finance function itself is turning to advanced technologies to enable its evolution. Fueled by inefficiency within the finance workstreams, the CFO requires more advanced and innovative technology.

Given that financial management for midsize organizations is an exercise in data management, many businesses are looking to advanced technology to cope with the data burden at scale and at speed. The technologies include:

  • Integration. Developers and managers require integrations to quickly add/modify data that flows into and out of software applications. This enables midsize businesses to quickly move data between systems and be more flexible as business needs change over time.
  • Cloud-native architecture. This architecture provides organizations with the necessary flexibility/agility to meet the demands of a highly dynamic market landscape. According to IDC, 80.7% of finance leaders reported they would be willing to pay more for cloud-native architecture featuring microservices and containers.
  • Automated workflows. Financial software vendors are embedding intelligence within the “record-to-report” (R2R) workflows to unleash the full power of automation.
  • Artificial intelligence (AI). AI is finding a foothold in nearly all aspects of financial operations from the record to report process to procure to pay and beyond. AI offers midsize organizations the ability to compensate for a lack of resources through the use of virtual assistants and intelligent automation.
  • Advanced analytics. Many organizations are flooded with business data from a variety of sources and a variety of data types. As a result, midmarket companies are turning to advanced analytics to glean insights from their data.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Fixing Intercompany

How Artificial Intelligence Can Reduce Transaction Failure Rates in Intercompany

Building a Successful Finance Transformation Team: Key Stakeholders and Change Champions

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How Artificial Intelligence Can Reduce Transaction Failure Rates in Intercompany

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This guest post from our partner, BlackLine, explains how artificial intelligence can be a game-changer for intercompany.

Intercompany has always been complicated. In an atmosphere of changing tax regulations and supply chain and labor issues, non-trade activities have their own special set of challenges. Combine these complexities with the fact that many intercompany transactions are performed manually, and it becomes clear that enterprises are in dire need of transforming their intercompany operations.

Performing intercompany tasks using conventional methods, such as working with manual spreadsheets and processing data using ERPs with limited automation capabilities, leads to exceedingly high transaction failure rates. These failures result in billing, reconciliation, and settlement delays while adding time, inefficiency, and frustration to an organization’s intercompany operations. And, since staff spends so much time matching and resolving problematic transactions, many organizations struggle to maintain capacity levels.

These challenges have led enterprises to examine solutions for intercompany enabled by artificial intelligence (AI), or at least what promise they hold. Fortunately, AI is no longer a headline-grabbing, seemingly futuristic phenomenon.

An Intercompany Game Changer

What is it about AI technology that has the potential to change the game for intercompany? In a way, it’s the ability to predict a reliable future. That is, AI-enabled solutions promise to guide organizations on how to set up and optimize transactions throughout their journey and avoid issues downstream.

This might seem Minority Report-esque (the 2002 Tom Cruise film in which law enforcement is able to predict crimes before they happen), but this technology can bring unprecedented visibility to intercompany functions, allowing teams to leverage insights and perform operations correctly and efficiently and avoid frustrating delays and disputes that would otherwise crop up in a conventional intercompany ecosystem.

An AI-enabled intercompany solution should:

  • Incorporate predictive analytics. The solution should be designed to learn from customer behavior data. After analyzing transactional and operational process data, it can predict where issues may arise and pose risks to close processes—before transactions are booked.
  • Provide accurate, immediate feedback. The solution should provide organizations with immediate feedback for any transaction set, highlighting high-risk transactions, explaining the risk factors, and offering guidance on what corrections should be made to facilitate precise, efficient, error-free processing.
  • Centralize and standardize transactions. The solution should tackle intercompany problems by treating them as extensive accounting data sets housed within an intercompany “subledger,” each of which possesses unique lifecycle characteristics associated with a given corporation.

BlackLine’s Intercompany Predictive Guidance

BlackLine has now developed the first AI-enabled, predictive processing capabilities as part of our intercompany financial management solutions.

Applied AI is at the heart of BlackLine’s Intercompany Predictive Guidance technology, empowering it to become familiar with each customer’s accounting behaviors at a granular level. By leveraging this technology, companies can dramatically reduce or even eliminate transaction failures, achieving significant time and cost savings on a global scale.

When the AI application analyzes an organization’s transactional data, it predicts where issues are likely to arise and pose a risk to financial close processes—before the transactions are booked. Specifically, it can:

  • Highlight high-risk areas
  • Explain risk factors
  • Show accounting teams where immediate corrections are possible
  • Provide guidance for future transactions

 While most automation and streamlined workflow capabilities should reduce failure rates, by using BlackLine’s AI-enabled technology, companies can dramatically reduce, or in some cases eliminate, their transaction failures, achieving significant time and cost savings.

Broader positive impacts of Predictive Guidance include helping enterprises better plan mergers and acquisitions and improve capacity development, as team members spend less time resolving transactional issues and more time making meaningful, strategic decisions.

Newly Realized Opportunities for Intercompany Success

BlackLine’s Intercompany Predictive Guidance changes the intercompany game by preventing potential issues before they happen, dramatically improving business outcomes. Fortified with this groundbreaking technology, today’s enterprises no longer need to be content with just learning about the potential of AI. They can begin to benefit from AI capabilities in their intercompany business practices.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

From Credit Managers to Strategic Partners: The Rise of Revenue Cycle Managers

Redefining Accounting: Embracing Technology to Transform the Profession

The Future of Accounting: Breaking Free from Manual Tasks with Technology

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Building a Successful Finance Transformation Team: Key Stakeholders and Change Champions

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This guest post from our partner BlackLine, which provides guidance on digital finance transformation journeys.

Embracing automation has become a strategic imperative for organizations seeking operational efficiency and improved reliability for their finance and accounting (F&A) processes. However, digital finance transformation journeys come with challenges that can fundamentally shape the ultimate outcome.

A successful implementation doesn’t just mean being smart with technology. It’s about managing change throughout your organization, ensuring everyone on the team is on board and making the most of software that tackles the real, everyday pain points for F&A.

You need all the pieces to fit, and to do this companies must take a considered and strategic approach.

Clear Objectives & Goals

Anchoring your automation initiative with clear, measurable objectives will be paramount to its success. Objectives that are too vague, challenging, or difficult to measure will hinder your project before it even begins.

Clear objectives and goals, on the other hand, will help you steer the ship, and right it when things go wrong. You should think of your objectives as your island. If your project scope starts to creep or become too complex, it can feel like you’re struggling to keep your head above water. When this happens, your objectives are where you want to return. You should be able to come back to them throughout the project, to make sure that what you are doing is aligned with and in support of these initial goals. This will help you to circumvent scope drift and focus on tackling the challenges that matter most to your business and its people.

Additionally, during this first step, you should already be thinking about the success story you want to tell at the end of the project. Think about the objectives you’ve set – do you know how you will show that you’ve met these? What benefits will these help to deliver, for people and the organization? If you can’t answer these questions, you may need to revisit your objectives to make them clearer and more specific.

Establish Metrics That Align with Automation Goals

This brings us to metrics and measurement. Whatever your goals for implementing new technology, demonstrating a good ROI, and building a business case for any future improvements, your definition of success must be etched in metrics. This is an area that sometimes (mistakenly) gets left to the end of a project. However, I would encourage you to view this as something that goes hand-in-hand with objective setting.

If you don’t think about measurement until the end, you’ll only measure what you can – not what would have been best for showcasing success. Establishing the right metrics at the beginning of the project gives you the opportunity to look at these at every stage, adjust your approach accordingly, and continue on your transformation journey.

Key Stakeholder Engagement

Planning is a priority at the beginning of any project – but change is a team effort. Get the right people involved and do it right away.

Rather than viewing your automation initiative solely through a technology or organizational lens, think about transformation as a people-centric process. Who will be impacted by this project and at what stage? Who needs to be informed? Who is a decision maker? Who can help you shape this? Who, ultimately, will its success depend on?

Involving key stakeholders from the beginning is important for setting expectations and avoiding challenges further down the line. If you introduce a stakeholder group too late, you might end up with objectives that move or change over time, or with technology that is not widely accepted by those who need to use it. Those brought into the project in the early stages are considerably less likely to challenge things down the line. Particularly if they have played a part in setting objectives or goals.

Depending on the size of your organization, the number of people who need to be informed and involved will vary. But there are three groups you should not forget:

A senior leader: someone who will help champion the project for you.

Your IT department: This team is crucial for any digital F&A initiative. The worst thing you can do is spring a project on them at the end of the line once a solution has been purchased, with an outcome and delivery date that does not work for their time and resources.

End users: Never forget the people who will be using the software you’re introducing and remember that people can sometimes feel threatened by change. Communicating how this will benefit them and hearing their concerns are both fundamental to managing change.

Change Champions

Every team needs its heroes. As part of your ongoing stakeholder engagement, try to identify and support “change champions” within your company.

Your most engaged and passionate colleagues often make the best champions. They’re the ones who know the current processes and pain points and see the benefits of what you’re trying to do. They may see that the next step in their own career is getting confident using the latest technology. These people can help you communicate how responsibilities and procedures are changing and why. They can help others adapt to the changes and make the integration process smoother.

Testing Before Showtime, Not After

Before your transformation project goes live, remember: test, test, and test again. Do not wait for issues to reveal themselves after launch. Instead, ensure rigorous testing has been carried out well in advance of the go-live date.  

This is a crucial part of the process to ensure that the technology performs as expected and that any potential roadblocks are dealt with proactively and head on. What’s more, it will build confidence in the system’s readiness and sets the stage for communicating success back to the business.

User Acceptance Testing (UAT) – testing of the technology with real-life users and scenarios – is invaluable at this stage. It will identify any unforeseen issues before the official launch, giving the team a chance to address them.

Balancing Perfection & Progress

While it’s critical to test and make sure you’re set up for a successful launch, it’s also important to understand that there is room to refine and improve things at a later stage.

A common mistake during an integration project is to expect perfection right away and become stuck in a holding pattern when it doesn’t materialize. If 95% of your project and processes are working as expected, that may be enough. Prioritizing measurable and impactful progress over a ‘perfect scenario’ will help you to reap benefits sooner. In turn, these benefits will likely help you to make a case for any additional investment that might be needed to achieve that last 5%.

Often, it’s better to take a step-by-step approach to transformation, gradually scaling and bringing people on the journey with you. Trying to do everything at once only heightens the risk of overpromising and underdelivering. 

Sharing the Success

Once everything is up and running, it’s time to share the good news. If earlier steps were followed, accurate metrics in line with initial objectives will demonstrate the automation’s positive impact. What’s more, you should have a range of stakeholders and change champions who are ready and willing to talk about the benefits they’ve seen along the way.

Ultimately, a successful automation journey opens exciting possibilities for F&A teams. While the technicalities are important, the real key to success is understanding that people are at the heart of it all. Ensuring successful implementation of technology and ushering in positive change requires F&A leaders to bring together employees, processes, and technology. By following these steps, you should be set up for success and in a position to demonstrate ROI for the next steps in your transformation journey.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

From Credit Managers to Strategic Partners: The Rise of Revenue Cycle Managers

Redefining Accounting: Embracing Technology to Transform the Profession

The Future of Accounting: Breaking Free from Manual Tasks with Technology

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Redefining Accounting: Embracing Technology to Transform the Profession

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This guest post from our partner BlackLine, highlighting the challenges the accounting profession is facing.

Since the onset of the pandemic, the list of challenges faced by business leaders has only gotten longer with each passing quarter: geo-economic confrontations, rising interest rates, supply chain disruptions, rising cyber-crime, energy crises, failing banks, extreme weather events…and unfortunately, there is more bad news to share. Accounting—the backbone of business operations—is in decline.

The Wall Street Journal reported that over “300,000 U.S. accountants and auditors have left their jobs in the past two years, a 17% decline,” and that the diminishing number of accounting bachelor’s graduates won’t be able to fill the vacancies. Some of this decline across the profession can be attributed to retirements, however, several studies point to a much larger problem.

Accounting’s Dependence & Decline

A recent survey of over 1,400 college students (accounting and non-accounting majors alike) on their perceptions of the accounting profession revealed three predominantly negative perceptions of accounting:

1) Accounting careers require longer hours per week than other careers.

2) Day-to-day responsibilities are less interesting than other business careers.

3) Accounting degrees are more difficult to earn than other business majors.

Another survey conducted with the University of Georgia’s Consumer Analytics Program revealed even more alarming data: of the 204 professional accountants surveyed, 99% reported experiencing some level of burnout and 24% of those reported experiencing medium-high to high levels of burnout.

This burnout is predominantly associated with the financial close:

  • 81% of participants reported having at least one month in the past year where the financial close disrupted their personal lives
  • 85% of participants reported having to re-open the books to fix errors at least once a year
  • 49% reported having to re-open the books to fix errors 3-4 months a year

This prevalence of errors within the financial close and subsequent burnout originates in the lack of controls, repetitive work, long hours, and weak data governance that is inherent to dependence on Excel-based accounting processes. Consequently, burnout across the profession only results in more time spent in these processes for the accountants that do remain.

Despite the well-known drawbacks of this dependence, Excel has remained the go-to for period-end accounting and finance processes since its entry into the software market in 1995. This reign as accounting and finance’s primary tool is a success by all accounts. However, the mutual relationship between the recent decline of the accounting profession and the consequences of reliance on manual processes demands a change. This demand for change is stressed even further when we consider the circumstances of our macro-environment and the challenges they pose to the priorities of business leaders.

Conflict with Leadership Priorities

In its Leadership Vision for 2023, Gartner research presents the leading 2023 priorities of Corporate Controllers and their leadership. To no surprise, the CEO’s number one priority is growth, followed by workforce management, and then technological transformation. For the Corporate Controller, the number one priority is to digitize and streamline the financial close process, followed by improving accounting staff engagement and retention, and then reevaluating the controllership’s scope and structure. Does accounting’s dependence on manual, Excel-based processes contribute to either set of priorities? The short answer is no.

With respect to the CEO’s priorities, spreadsheet-based processes:

1) Inherently conflict with technological transformation.

2) Are the root source of the accounting profession’s challenges with workforce growth and retention.

3) Lend themselves to the persistence of risk, inconsistency, lack of visibility, and inefficiency that ultimately disables the CEO from making well-informed, real-time decisions that can optimize profitability.

This is especially true during a tumultuous macroeconomic environment. 

A Better Way to Achieving Controllers’ Goals

Fortunately for Corporate Controllers, they can simultaneously address the conflicts that Excel-based processes pose to the priorities of the CEO and achieve their secondary and tertiary priorities through commitment to their first priority—digitizing and streamlining the financial close process.

Of course, there are steps that need to be taken to make the close process resilient to a rapidly changing and increasingly complex business environment prior to digitizing it.

Corporate Controllers can improve accounting staff engagement and retention and reevaluate the controllership’s scope and structure by redefining accounting’s role to support the decision-making and growth priorities of the CEO by:

1) Ditching the risks and inefficiencies associated with spreadsheet-driven processes.

2) Leveraging technology that enables real-time visibility into the balance-sheet.

3) Removing repetitive, mundane tasks from the accountant’s day-to-day responsibilities.

Despite the reality of the accounting profession’s decline, the shift from bookkeeping to decision-support that’s offered by the digitization and streamlining of core accounting processes can deliver a sea change to the profession.

It can address the root causes of burnout, such as the prevalence of errors and rework and the long hours required of repetitive, spreadsheet-driven processes. It can align accounting graduates more closely to the education in analytics and strategy that they received in college, which can in turn make the most of the controllership’s valuable talent. It can dispel perceptions of accounting work as boring and repetitive. And most importantly, it can increase the accountant’s value by making them a stakeholder in the strategy and growth of the business.

If delaying this change to the accounting profession is to delay the growth trajectory of the controllership and its alignment to the priorities of the CEO, then this is a change that business leaders cannot afford to delay.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Unplugging with Confidence: How Accountants Can Enjoy Vacations Stress-Free

The Power of AR Automation in Transforming Finance Operations

Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

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The Future of Accounting: Breaking Free from Manual Tasks with Technology

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This guest post from our partner BlackLine, discussing how technology can help with the shortage of accountants.

Over the years, the accountancy profession has been known for its stability and rewarding nature. Recently, the number of students specializing in accountancy has dropped while the number of accounting professionals leaving the sector has risen. Yet the demand for qualified accountants shows no signs of abating, resulting in a pressing talent shortage in the finance and accounting industry.

Tammy Coley, BlackLine’s Chief Transformation Officer, chatted about the topic with radio station CNA938 in Singapore.

Technology in the Accounting Profession

Tammy and the show host discussed the rise of technology in the sector and its impact on the profession. Tammy noted that the pandemic caused a lot of corporations to think differently about accounting which led to an embrace of technology and its ability to reduce the reliance on manual, spreadsheet-driven processes. But, in truth, she believes the industry should have been thinking differently about it for a long time before the pandemic.

“We in the accounting profession have a significant opportunity to stop allowing these manual routine processes to continue to be the focus of the accounting function. Accounting is critical, yet many accounting professionals spend so much time simply going through the motions, doing those same processes over and over every period,” she explained.

It’s time to automate those processes so accountants can spend their time on higher value-added activities.

“I am so passionate about helping the accounting profession get away from the manual routine processes and really add value by analyzing the numbers and making sure the numbers are accurate.”

The Accounting Talent Crunch

The Association of Chartered Certified Accountants (ACCA) notes the talent crunch in the finance and accounting industry in Singapore (and elsewhere) is expected to worsen. The perception that accounting is still manual, routine, and not exciting may be part of this.

“Accounting is an awesome profession. I love, love, love accounting!” exclaims Tammy. But she goes on to say that accounting has done itself a disservice over the years by continuing to allow the processes to stay manual and routine.

However, this has exposed a huge opportunity to embrace technology and let it do the hard work on the manual, routine processes. This gives accountants an opportunity to better understand the drivers of the business and help the company make good decisions.

Let’s look at an example. In the past, you’d come to work and know that you’re going to pull this data from this subsystem, you’re going to put it into a spreadsheet, then you’re going to calculate the journal entry, and you’re going to post it.

What if, in place of you doing that process over and over, the software does it? Now, instead of posting that journal entry, you get an opportunity to step back and say, “Okay, the system posted it, but does it make sense in comparison to last period or last year? Does it make sense in comparison to forecast?” Now, you can focus on understanding whether the numbers make sense, analyzing the numbers, and helping turn the numbers into information—not just data.

Changing the Perception of Accounting

Tammy feels strongly that the industry needs to change the perception of accounting to get more people interested. The current view is that accounting is a lot of manual work—and that’s not wrong in many organizations.

Students go to school for years to become an accountant, and the job is so critical, but then some people just feel stuck in this manual process cycle. “Those manual routines? They don’t have to be manual anymore. We’ve got to take our game to the next level and not just stay back where we were before the technology could do so much for us,” Tammy explains.

With solutions like BlackLine, accounting departments can automate the manual processes, the routine tasks, and the activities that take up so much time. With that time freed up, F&A professionals can provide an elevated level of service to their organizations and stakeholders, while the organizations benefit from increased job satisfaction and employee retention.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Unplugging with Confidence: How Accountants Can Enjoy Vacations Stress-Free

The Power of AR Automation in Transforming Finance Operations

Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

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The Power of AR Automation in Transforming Finance Operations

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In today’s fast-paced and competitive business landscape, finance leaders are constantly seeking ways to optimize their operations and drive growth. One of the most transformative tools available to them is AR (Accounts Receivable) automation. This cutting-edge technology streamlines manual processes, enhances customer experiences, and unlocks working capital, making it a no-brainer decision for forward-thinking organizations. 

The Quest for Agility and Digital Transformation

Recent years have been defined by constant change and technological advancement. Agility and digital transformation have become vital for organizational survival. The finance department, once seen as a back-office function, is now at the forefront of driving strategic decision-making. AR automation plays a crucial role in this transformation, enabling finance professionals to shift their focus from laborious manual tasks to high-value analysis and customer relationship management. By leveraging machine learning and AI-driven technologies, AR automation provides the data-driven insights needed to make informed decisions that fuel growth.

The Impact on Cash Flow and Working Capital

Cash flow is the lifeblood of any organization, and AR automation offers a surefire way to optimize it. By accelerating cash application, businesses can reduce Days Sales Outstanding (DSO), improve working capital management, and strengthen financial health. With faster access to critical data, finance leaders can confidently manage risks and capitalize on growth opportunities. This not only enhances financial stability but also positions the organization to navigate market fluctuations and disruptions effectively.

Enhancing Customer Experience and Loyalty

In today’s customer-centric world, providing a seamless and efficient payment experience is paramount. AR automation simplifies the payment process, enables quicker invoicing, and offers easier payment methods, leading to improved customer satisfaction and loyalty. By freeing up time and resources, finance teams can focus on building stronger relationships with customers, offering personalized solutions, and addressing their needs promptly.

A Successful AR Automation Journey

Transitioning from manual to automated processes requires a collaborative effort and a commitment to change. Successful AR automation projects involve engaging finance leaders, AR specialists, IT teams, and other key stakeholders. By gaining their buy-in and addressing their concerns, organizations can ensure a smooth implementation and adoption of the technology. Moreover, with a solution like BlackLine’s AR Automation platform, which offers quick implementation, pre-built rules, and industry-leading match rates, businesses can experience immediate benefits and drive results faster.

Numerous organizations worldwide have already reaped the rewards of AR automation. For instance, global companies have seen match rates rise from less than 38% to over 80% and as high as 92% in some places after implementing BlackLine’s AR Automation solution. These success stories highlight how embracing this no-brainer technology can revolutionize finance operations, improve efficiency, and drive business growth.

In conclusion, AR automation is a transformative tool that empowers finance leaders to create cohesion, unlock working capital, and optimize operations. Embracing this no-brainer technology is an opportunity to increase productivity, enhance customer experiences, and achieve business goals. The time to act is now, and by doing so, organizations position themselves for success in an increasingly dynamic marketplace.

Learn more about AR automation. Download BlackLine’s eBook, It’s a No-Brainer: Why AR Automation is the Go-To Tool for Organizations

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Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

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Effective management of accounts receivable (AR) is critical for the financial health of any organization. Timely collection of outstanding payments can improve cash flow, reduce the risk of bad debts, and enhance overall financial stability. However, manual AR processes can be time-consuming, prone to errors, and lack actionable insights. 

Automating Cash Application

Cash application is a fundamental part of the AR process, where incoming payments are matched with outstanding invoices. Traditionally, this has been a tedious and error-prone task. With AR technology, cash application becomes automated and efficient. The system should intelligently match payments with invoices, reduce manual efforts and ensure accuracy. This automation can save valuable time for finance teams, allowing them to focus on higher-value tasks.

Enhancing Payment Matching

One of the common challenges in AR management is dealing with diverse payment sources and remittance formats. AR automation technology addresses this issue by seamlessly scraping payment information from various sources, such as bank statements and remittance invoices. The technology should match this data with relevant invoices, streamlining the reconciliation process. As a result, organizations achieve better visibility into their cash flow and minimize the risk of unidentified or misapplied payments.

Customer Risk Assessment

Understanding the creditworthiness and payment behavior of customers is vital for managing risk in AR operations. Technology such as BlackLine’s solution’s customer attractiveness scoring system helps organizations identify customers with varying levels of risk. By analyzing factors such as payment history, outstanding debts, and payment trends, the system assigns grades to customers, enabling finance teams to prioritize collections efforts and manage credit exposure more effectively.

Cash Flow Forecasting

Cash flow forecasting is an essential practice for any organization to plan and manage financial resources efficiently. An AR Intelligence solution should empower finance professionals with data-driven insights to make informed cash flow predictions. By analyzing historical payment patterns, invoice due dates, and customer payment behaviors, the system provides accurate forecasts, helping organizations anticipate cash inflows and outflows with greater precision.

In today’s fast-paced business landscape, optimizing financial operations is essential for sustainable growth and success. AR solutions offer comprehensive and intelligent approaches to streamline accounts receivable processes. By automating cash application, enhancing payment matching, and providing valuable insights through analytics, organizations can reduce manual efforts, mitigate risk, and achieve better financial outcomes.

Learn more about optimizing AR – watch our on-demand webinar, BlackLine in Action: Optimizing Your Accounts Receivable Process. 

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Building Financial Resilience with AR Intelligence: Embracing the Power of Automation and Data

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In today’s fast-paced and unpredictable economic landscape, businesses must be equipped to weather financial storms and emerge stronger. One critical aspect of financial resilience is effective management of accounts receivable (AR) and credit risk. Traditional approaches to AR reporting often lack real-time insights, leading to inaccurate cash forecasting, extended payment terms, and delayed collections. However, by embracing AR intelligence through automation and data analytics, businesses can optimize cash flow, make informed credit decisions, and enhance collections strategies. 

The Power of AR Intelligence

AR intelligence is revolutionizing the way businesses manage their financial operations. By integrating automation and artificial intelligence, AR intelligence platforms streamline data collection, analysis, and reporting processes. These platforms provide real-time payment data, customer payment behavior insights, and debtor performance information, enabling financial decision-makers to access critical information at their fingertips. With automation handling time-consuming manual tasks, finance teams can focus on strategic decision-making and respond swiftly to market changes.

Optimizing Cash Flow with Payment Forecasting

Cash flow is the lifeblood of any business, and accurate payment forecasting is crucial to ensure its smooth operation. AR intelligence utilizes historical payment data to predict future payment patterns and identify potential cash shortfalls. Armed with reliable forecasts, businesses can make better-informed decisions on spending, investments, and overall financial planning. This level of insight empowers treasurers and credit collections teams to allocate resources efficiently, analyze the effectiveness of collection strategies, and improve cash flow.

Efficient Collections Strategies through Data Analysis

Collections teams face the challenge of managing the entire customer portfolio with limited resources. AR intelligence resolves this issue by providing in-depth data analysis of customer payment behavior and outstanding debts. Collections efforts can be targeted based on high-value accounts or invoices with a higher likelihood of success. This targeted approach improves debt recovery, optimizes resource allocation, and enhances cash flow.

Mitigating Credit Risk with Real-Time Assessment

Understanding customer payment behavior is essential in managing credit risk effectively. AR intelligence leverages real-time payment data and advanced analytics to assess customer creditworthiness accurately. Businesses can make informed credit decisions, monitor customer credit risk in real-time, and adjust credit policies to align with their risk tolerance and objectives. This proactive approach mitigates the risk of bad debt and strengthens customer relationships.

Proactive Dispute Resolution

Customer disputes can hinder cash flow and damage relationships. AR intelligence offers comprehensive insights into customer behavior and historical interactions, enabling businesses to identify dispute trends and expedite resolution processes. By addressing underlying problems proactively, businesses can prevent future disputes and maintain positive customer relationships.

Building financial resilience is imperative for businesses to thrive amidst economic uncertainties. AR intelligence, fueled by automation and data analytics, empowers organizations to optimize cash flow, manage credit risk, and enhance collections strategies. By harnessing the power of real-time insights, finance leaders, credit teams, and collections teams can make informed decisions and steer their businesses through challenges while seizing growth opportunities.

Embracing AR intelligence is not just a trend; it is a strategic move to stay ahead in a dynamic market. As the economic landscape continues to evolve, businesses that embrace AR intelligence will be better equipped to navigate change, build financial resilience, and position themselves for long-term success. With the right tools and mindset, the journey towards financial resilience is within reach for every business.

Learn more about AR intelligence. Download BlackLine’s whitepaper, How to Build Financial Resilience Through AR Intelligence.

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