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How Automating Accounting Meets the Growing Demands of Finance

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This is a blog post from our partner BlackLine, explaining four reasons why CFOs are automating their accounting processes.

Going into 2023, Deloitte’s Q4 2022 North American CFO Signals survey revealed that one in three Chief Financial Officers (CFOs) anticipated economic challenges and a possible recession as the major constraint to achieving their companies’ financial performance goals. Despite this gloomy outlook, the survey reported that 79% of CFOs expected to implement more automation/digital technologies into their processes.

Why the Bullishness Towards Investment in Technology?

The answer lies in the growing demands of the finance function. The list of challenges facing businesses seems to grow with every passing quarter, and CFOs and their teams are increasingly expected to act as key partners to business operations. This means spending more time providing the CEO and other leaders with critical insights and decision support and less time on transactional finance. This also means reducing costs and investing in technology to automate core business processes, and accounting is often the best place to start.

4 Reasons Why CFOs Everywhere Are Automating Their Accounting Processes

In no particular order, here are 4 reasons why CFOs everywhere are automating their accounting processes:

In 2022, Gartner surveyed 155 finance executives on their 2025 goals for the financial close. The majority of respondents identified general aims for improvement and over half revealed the goal of an autonomous financial close process:

– 86% said they want a faster, real-time close

– 68% said they want a cheaper close

– 64% said they want an error-free close

– 55% said they want a touch-free close

While a touch-free close is largely just an ambition at the moment, many CFOs have already achieved a faster, real-time close by standardizing their processes and applying automation to repetitive tasks and threshold-dependent use cases.

CFOs that have done so tend to lead top-performing organizations and see significant savings of time and money, so they are spending a lower percentage of their revenue on the finance function and freeing their “teams from low value-added activities so they can be redeployed into value-added business advisory roles.” On average, these organizations spend three times less on their finance function than those that haven’t optimized their processes.

2. Technology is the #2 priority for CEOs

Gartner’s 2023 CEO Survey identified technology and digital transformation as the #2 priority for CEOs, with a special focus on AI and process automation. As expected, growth is the #1 priority for CEOs, but it’s far from being mutually exclusive to investment in digital transformation, as 89% of boards claim we are “in a post-digital world; i.e., digital is an implicit part of growth strategies.”

A recent study by Harvard Business Review highlights the importance of technology and digital transformation to current business growth, comparing average annual shareholder returns of digital “leaders” to those of digital “laggards” across the global banking industry. From 2018 to 2022, digital leaders in global banking saw 8.1% in average annual shareholder returns versus 4.9% for laggards. Additionally, total operating expenses of digital laggards grew at 2.3% per year, nearly twice that of digital leaders (1.3% per year).

3. Recruiting and retaining top talent

The CFO’s investment in technology also contributes to the #3 priority for CEOs – recruiting and retaining top talent. The Journal of Accountancy recently cited a survey of 267 CFOs across the U.S., EMEA, and APAC, revealing that 99% of CFOs who are prioritizing digital transformation agree that technology will be crucial to their ability to attract and retain employees.

Another survey by the Association of International Certified Professional Accountants showed that finance and accounting roles have virtually no interest in information activities, like data aggregation and transactional ticking and tying, and would rather shift their focus to delivering insight, influence, and impact to their organizations. This sort of sea change in the role of accounting and finance is only possible through the automation of repetitive core processes.

The current shortage of accountants entering the workforce even further stresses the importance of investment in technology. In December 2022, 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 declining 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, a recent survey of 1,400 college students on their perceptions of the accounting profession revealed that when compared to other careers, most undergraduates view accounting careers as requiring longer hours per week and having less interesting day-to-day responsibilities. These perceptions are largely due to accounting’s traditional association with repetitive, time-consuming processes, many of which can now be automated and digitally optimized.

4. Our volatile economic environment

The past three years have produced the most volatile economic environment since The Great Recession. The sharp economic contraction caused by the COVID-19 pandemic was quickly followed by supply chain disruptions, inflation, rising interest rates, geoeconomic confrontations, energy crises, extreme weather events, failing banks, and labor shortages, which have been especially pertinent to finance and accounting teams.

These challenges have stressed the demand for real-time insights into financials to enable proactive, data-driven decisions that will eliminate risk and maximize profitability. Gartner’s 2023 Survey of Top 5 Priorities for Corporate Controllers revealed that a top priority for the controllership is to reevaluate its own scope and structure, so that its value is aligned to support judgment-based and decision-enablement workstreams for the larger CFO organization.

It goes without saying that traditional accounting practices are incompatible with this demand for accurate, real-time insights. Although a lot has changed over the past several years, a 2019 survey of 1,100 C-level executives and finance leaders across the U.S., EMEA, and APAC found that 69% of respondents believed that their CEO/CFO had used incorrect or out-of-date financial data to make significant business decisions. Manual input processes and too many disconnected data sources were identified as the leading reasons for error.

How Are CFOs Navigating These Demands?

As organizations must embrace even greater influxes of data across different systems, our business environment becomes even more complex, and finance and accounting face a shortage of talent, the controllership’s ability to eliminate risk, consolidate financial data, and enable decision-support for the office of the CFO can only be made possible through the digital transformation of core financial processes. For a first-hand account of how making a change is helping other finance leaders navigate those demands, tune in to this webinar: Controllers Council – The Future of Accounting: Insights from Industry Leaders.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

How CFOs Stay Ahead of Rapidly Changing Markets

Industry Analysts’ Take on F&A Priorities

The Importance of Taking an F&A-First Approach

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Making Work Meaningful for Finance & Accounting

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This is a guest post from Christine Peart, CFO of Fluence Technologies, a partner of Revelwood, defining a future-ready finance workforce.

A few months ago, an article in the Wall Street Journal documented a troubling trend for finance; accountants are beating a path to the exit with more than 300,000 U.S. accountants and auditors leaving their roles from 2020-2022.

After almost a year of hearing about “quiet quitting,” accountants seem to be just . . . outright quitting.

That would be bad enough in itself, but the article suggested retention was only one part of the challenge finance departments are facing:

“The huge gap between companies that need accountants and trained professionals has led to salary bumps and more temporary workers joining the sector. Still, neither development will fix the fundamental talent pipeline problem: Many college students don’t want to work in accounting. Even those who majored in it.”

The WSJ interviewed one college student who bemoaned the idea of being “bogged down in the repetitive tasks of accounting, such as balancing cash sheets.” Instead, he found greater fulfillment in his data analytics class.

If this sounds familiar or reminds you of a similar refrain within your accounting and finance team, you might want to consider what will most deeply engage the talent you employ today, and what they’ll need to continue thriving tomorrow. I’m calling this a future-ready finance workforce, and if it’s not already, it should be at the top of every CFO’s agenda.

The search for meaning in finance and accounting

The evidence that working conditions within finance and accounting departments need to change isn’t limited to a few interviews and anecdotes. Last year consulting firm Deloitte conducted a survey in which careers.

You probably already guessed the number one answer, which was compensation. Number two, however, was “meaningful work” at 28% of those surveyed. This was far more important than other factors you might have expected to rank high, such as recognition (cited by only 6%) or even upward mobility, which came in at less than ten percent.

If those in accounting and finance find work meaningful, in other words, they may not be looking for their next big promotion. They might just be looking to build upon their skills and deliver greater value for the organization.

“People are most often engaged and productive when they do activities that energize them and leverage their skills. When organizations connect people to work that uses their skills, the result is likely to be high engagement and productivity,” the Deloitte report’s authors wrote. “Transitioning from a role-based to a skill-based finance organization can empower the workforce to own their development and establish a culture of internal mobility.”

Your future-ready finance workforce to-do list

It might seem difficult to develop finance and accounting roles in such a way that they compete in terms of prestige or glamor. And yet being able to make sense of financial information and guide corporate strategy can transform the ability of an organization to grow and succeed. It can help leaders in every other department outside finance be in a better position to achieve their goals. It’s hard. And it matters.

With that in mind, the call to action for finance leaders couldn’t be clearer:

1. Listen and act upon employee experience indicators

A future-ready finance workforce is one in which leaders have taken the time to develop a culture among their team where this value is clearly understood and to clearly reinforce it based on the employee experience they deliver.

By “employee experience,” I don’t simply mean what happens when an employee is welcomed on their first day, or the exit interview that’s conducted as a sort of post-mortem once they’ve tendered their resignation. The employee experience spans the entire journey someone takes with your organization, including what they see, think and feel on a day-to-day basis.

Whether through a formal survey or just seeking feedback through team meetings and one-on-one check-ins, ask your team about where they’re spending their time. Not to suggest they’re spending in the wrong areas necessarily, but whether it’s making the best use of their skills. Explore where they feel they could be making a greater contribution. Think about what kind of tools can best support them.

2. Conduct a skills audit to inform career development and hiring strategies

For some organizations, turnover in finance and accounting may be the one place where they’re not trying to trim back personnel. Challenging economic headwinds are forcing leaders in every industry to consider the people and skills they have in place, and whether it’s sufficient to meet business needs.

As a recent article in Fortune pointed out, the mass layoffs we’re reading about in the news could be the beginning of a transformation in who gets hired in accounting and finance roles.

“While most finance organizations were built with folks that have backgrounds similar to mine—accounting, risk, controls—what CFOs are now looking for are people with a much greater degree of tech fluency, data analytics skills,” said one of the CFOs interviewed for the piece, which predicted a rise in the use of cloud computing, artificial intelligence and more automation in general.

While you’re keeping an eye out for those future stars, begin building up those you already employ. That may require looking at automation too, so you can free them up from the manual and error-prone tasks that may make it impossible for them to reskill and upskill as they should.

3. Align your workforce around functional and organizational goals

Regardless of industry or size of company, finance leaders are pretty consistent in where they want to modernize operations: the close.

Just look at the results of a 2022 CFO survey from market research firm Gartner, which showed the most common goals included a faster, real-time close (86%), a cheaper close (68%), and an error-free close (64%). The future, in this case, isn’t very far away: these were all goals finance leaders expected to reach by 2025.

Even Gartner admitted that a fully autonomous close is unlikely to happen anytime soon. However, the purpose-built, finance-owned solution finance and accounting teams need to achieve those other targets is here today. The challenge with technology, though, is that most organizations are still leveraging legacy solutions or worse yet, still relying on Excel. These outdated tools tend to perpetuate the need for repetitive, mundane tasks and inhibit their ability to do ‘meaningful work’. Arming your workforce with modern tools that are easy to use and maintain is the first step in preparing them for what’s ahead and enabling your team to do ‘meaningful work’.

Conclusion: The value of working definitions

What is a future-ready finance workforce? A team whose leaders make the work feel meaningful. A group where everyone is motivated to continually develop their skills in response to business changes. A department equipped with the modern tools to tackle the biggest organizational ambitions.

That’s how I’d define it today. If we’ve learned anything over the past few years, though, it’s that the future evolves in highly unexpected ways. And it’s going to be critical for CFOs to modernize their office of finance with a future-ready workforce to be prepared for whatever comes next.

This blog post was originally published on the Fluence Technologies blog.

Read more about Financial Close and Consolidation:

Challenges Facing Finance Leaders in the Mid-Market

Ventana: Continuous Accounting Helps Companies Close Faster

Modernizing Financial Close and Consolidation with Best-of-Breed Corporate Performance Management Solutions

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Continuous Accounting vs The Risk of Doing Nothing

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This is a guest post from our partner BlackLine, explaining the value of Continuous Accounting.

Change is uncomfortable. We all tend to resist change when we see it coming—and even more when we don’t.  Many go to great lengths to avoid what is different, especially at work.

We have our routines down pat, we can practically perform accounting processes in our sleep (and often do, especially during the close), and we like that familiarity.

But what if making a carefully calculated pivot to the right technology could actually be safer?

The reality is that although change is uncomfortable, it can be more dangerous to live with outdated manual processes and the inherent risks of human behavior.

The Risk of Doing Nothing

New possibilities to create competitive advantage present themselves all the time. This may seem overwhelming, but technology can lead to opportunities for accountants to evolve and add an even higher level of value to their organization.

Automation streamlines the most routine, manual work, and opens the door to Continuous Accounting:  an approach that ultimately results in better-utilized resources.

Continuous Accounting transforms the way accounting and finance teams work by embedding automation, control, and period-end tasks within daily activities. It frees up accountants to partner with the broader business, helping to drive more informed decisions for the organization.

Process automation provides one of the greatest opportunities for competitive advantage and waiting to adopt the right technology heightens the risk of being left behind—in your industry and in your profession.

If you decide to do nothing “for now,” but your competitors and peers choose to innovate, adopting automation and a Continuous Accounting model, they will quickly set themselves apart, becoming more efficient and controlled.

They will have access to the financial information needed to inform better decision-making and gain insight into bottlenecks.

Reducing the Resistance with Continuous Accounting

When you are performing most of your month-end close processes during a defined close window, it’s difficult to provide any meaningful financial data until after “pencils are down” – which is typically several days into the new month when the data is no longer relevant.

If you continue accounting the way it’s always been done, you’ll stay trapped in the never-ending cycle of feeling behind, always reporting on last month while the business has moved on to the next.

Leveraging technology allows accounting organizations to perform certain activities more real-time, increasing visibility to prevent surprises. By analyzing smaller subsets of data on a regular basis, you can identify irregularities in a timely manner, allowing the business to react appropriately and forecasts to be updated when needed.

“A big win with Continuous Accounting is automating certain areas. This means that rather than spending valuable time in the weeds of transactional data, you’re analyzing and reviewing exceptions,” says Molly Boyle, Director of Solutions Marketing at BlackLine.

Accounting in real-time isn’t possible without the technology that can drive automation and visibility. When the manual processes are automated, your accounting team is freed to focus their time on reporting and analyzing data to identify trends or adjustments.

When you begin providing meaningful data to decision-makers, and when you can do so in a timely fashion, your value to the organization increases substantially.

The End-Goal of Continuous Accounting

The goal of Continuous Accounting is to create a more synergistic organization where accounting and finance have a seat at the table. The most effective decisions are made when different departments make them together, with the real-time reporting data that tells the full story.

But a series of steps are required to take you from doing nothing to a fully Continuous Accounting approach. And it’s essential to start by defining the end state so you know exactly what you want to work toward. You can then work backwards to break down and delegate the steps that will get you there.

These five steps provide a framework to get you started:

  • Evaluate your existing processes first, to avoid automating bad processes.
  • Thoroughly research the best finance automation solution to ensure that you implement the right technology.
  • Focus on the benefits – instead of your fear of change.
  • Start small with a stepwise approach that will prove the risk mitigating benefits of Continuous Accounting
  • Begin to view industry advancements as improvements, so you can recognize the most beneficial opportunities.

Continuing to repeat these steps will shift your mindset and create a ripple effect in your organization. You’ll begin to see a reduction of risk, more timely data for business decisions, and a better utilized, more engaged accounting team.

And eventually, you will realize that the uncertainty and discomfort of change have become worth it – if not a little more manageable.

Driving Your Organization to the Next Level

It may seem like less effort to stay where you are. But waiting to implement a Continuous Accounting approach could come at a much greater cost, putting you at a disadvantage that may ultimately leave you reeling.

Change is inevitable for any company striving to create competitive advantage and staying stagnant is far riskier than implementing new technology to improve old processes. For this reason, getting comfortable with being uncomfortable can drive your organization to the next level.

This blog post was originally published on the BlackLine blog.

Read more Financial Close & Consolidation

BlackLine Demo: Balance Sheet Reconciliation Modules

BlackLine Demo: Bank Reconciliations

BlackLine Demo: Loading Subledger Data into a Reconciliation

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Revenue Cycle Management

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This is a guest post from our partner BlackLine, explaining how revenue cycle management helps businesses be more responsive to changing market conditions.

Today’s business environment is more dynamic than ever. Business leaders are focused on strategic initiatives to position their companies for long-term growth, to gain competitive advantage, and to drive shareholder value.

Top of mind for many business leaders are topics like recruiting and retaining top talent, remote work enablement, mergers and acquisitions (M&A), and digital transformation, to name a few.

As business leaders focus on making strategic decisions around these areas, accounting teams are being increasingly relied upon to provide data and insights and to serve as strategic advisors to the business.

This post is part of a series that discusses areas of focus that require active accounting input, why it matters to accounting leaders, and the risk of doing nothing.

Cash is King

The revenue cycle, or order to cash cycle, refers to the entirety of a company’s ordering system and can involve many departments — from sales and accounting to inventory and logistics. It starts the moment a customer places an order and continues through when an invoice is settled, and all activity in between is recorded and reconciled.

All eyes are on the revenue cycle. Not just because it’s an essential function in finance and usually carries the most risk, but because it is a critical part of how an organization functions. The efficiency and effectiveness of the revenue cycle has an impact beyond sales and finance, including customer experience and retention, investor decision-making, and future organizational strategy.

From an investor, net income, and EBITDA perspective, the most important part of the revenue cycle is not what is invoiced, shipped, or billed, but rather what is collected. According to a PwC report, improved working capital management could unlock $1.4 trillion globally, increasing the return on invested capital by 8.8%. Maximizing profit is the end goal, and therefore limiting write downs, closing the gap between gross and net revenue and limiting the reasons companies fail to collect are of paramount importance. Further, cash flow fuels critical business strategies from maintaining customer service to investing in new areas, and so as they say: cash is king.

The Bottom Line

There are several reasons why a company fails to collect on what they invoice, but manual processes are the biggest driver. Within the revenue cycle, Finance and Accounting is dealing with a tremendous volume of individual transactions. When there is not an automated process for handling that data at scale, the result is preventable, but unavoidable, write-offs.

MGI Research estimates that 42% of companies experience some form of revenue leakage and according to a study published by EY, on average companies can expect 1-5% of realized EBITA to leakage, causing a direct hit to the bottom line. As such, this is not just a reconciliation problem—or even just an accounting and finance problem—it’s a bottom-line issue that company leaders and investors will notice.

Given the attention on cash in the current market conditions, it is of utmost importance to take action over areas that we can control and, in doing so, position our organizations and our companies for success.

This blog post was originally published on the BlackLine blog.

Read more about Financial Close and Consolidation:

Financial Close & Consolidation: The Vital Need for Automating Accounting

Modern Accounting: Adjusting Journal Entries

Modern Accounting: Highlights from Beyond the Black 2022

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BlackLine Demo: Balance Sheet Reconciliation Modules

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Did you know BlackLine’s modern accounting software has many time-saving features in its balance sheet reconciliation module?  

In this video, Adam Riskin, financial close and consolidation practice leader at Revelwood, shows you how to save time on balance sheet reconciliations when using BlackLine. These features include:

  • Auto certification rules
  • Populating GL balances
  • Reporting

Watch this video to learn how to use BlackLine for balance sheet reconciliations.

Revelwood is a BlackLine Gold Solution Provider with a team of former accountants and financial systems professionals. We help companies streamline, automate and modernize time-consuming accounting tasks for transformative changes in accounting processes.

Watch more BlackLine demos and videos:

Loading Subledger Data Directly Into a Reconciliation with BlackLine

Month-End Close Checklist with BlackLine

Matching Records from Multiple Files with BlackLine

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BlackLine Demo: Bank Reconciliations

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Did you know BlackLine’s modern accounting software can help you automate and streamline bank reconciliations? 

In this video, Adam Riskin, financial close and consolidation practice leader at Revelwood, shows you how fast and easy it is to perform bank reconciliations in BlackLine. 

Today most companies use Excel to do bank reconciliations. They import the bank statement data into Excel. They also import the General Ledger journal entries into Excel. Then they do a side-by-side comparison. This is tedious and can be error-prone. 

Watch this video to learn how BlackLine uses matching logic on bank reconciliations.  

Revelwood is a BlackLine Gold Solution Provider with a team of former accountants and financial systems professionals. We help companies streamline, automate and modernize time-consuming accounting tasks for transformative changes in accounting processes.

Watch more BlackLine demos and videos:

Loading Subledger Data Directly Into a Reconciliation with BlackLine

Month-End Close Checklist with BlackLine

Matching Records from Multiple Files with BlackLine

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Financial Close & Consolidation: The Vital Need for Automating Accounting

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This is a guest post from our partner BlackLine, detailing a recent PwC report that highlights the need to automate accounts receivable. 

Are corporations that need to protect working capital prepared for the coming financial headwinds?

In today’s world of accounting management, uncertainty and market volatility have become the norm. Ongoing financial and political upheavals have led CFOs and accounting teams, seeking to protect net working capital (NWC), to make decisions in a crisis-to-crisis fashion.

Corporations should therefore pay close attention to the most recent PwC report. “Working Capital Study 22/23” provides an all-too-real overview of how corporations are trying to navigate market uncertainties and why they should consider making adjustments to their financial strategies.

At the outset, the report highlights a few positive NWC ratio indicators. Since 2020, there has been a 2.5% fall in annual NWC day (a five-year low), a €0.8 trillion increase in working capital, and continued recovery from the heightened levels of the pandemic.

But the report also warns about “trouble brewing under the surface.” It speaks to impending financial “headwinds” that include rising inflation, supply chain disruptions, and the war in Ukraine and characterizes companies around the world as being unprepared for what’s to come: 

PWC writes, “So is this the cue for high fives all round and a sigh of relief for having weathered the storm? Unfortunately, the short answer is no. The working capital ratios set out in the last annual financial statements show some signs of recovery. But, when we dig into the details, there are still some worrying trends and untapped opportunities to boost capital efficiency.”

To properly and sustainably protect NWC and manage accounting processes, it’s critical that companies ask some key questions:

  • How are we currently reacting to post-pandemic market curveballs?
  • How do these behaviors fit into our long-term business strategies?
  • Could these reactions be negatively impacting NWC?
  • Do we have untapped resources that could help develop more sustainable strategies to combat unpredictable market volatility?

Let’s take a look at what corporations are currently doing to try to guard against economic “turbulence” and how they can develop better long-term financial strategies to combat today’s market uncertainties.

“Just-in-Case” Approaches

The overall picture of cash position as laid out in the PwC report—declining by 10% in 2021 from 70 to 63 days—is encouraging and indicates that companies are operating with a “cash buffer to withstand uncertainties.”

Yet the report raises the concern that there is a “lag” that may lead to “a false sense of security.” Furthermore, as corporations try to stay ahead of unrelenting supply chain disruption, they adopt “just-in-case” approaches, such as:

  • Over-ordering, which can lead to inventory levels that fail to match market demand
  • High stock write-offs
  • Increased allocation planning driven by shortfalls and constrained capacity

Reactionary approaches might provide some salve, but they also exponentially increase “the risks of future obsolescence by extending the response time to dips in demand, as well as increased capital consumption from running at higher safety stock levels.”

The report states that corporations seem to be missing the fact that inventory performance has remained largely static. “Improvements in the working capital ratio have stalled,” the report notes. “And while it is still better than before the pandemic, we’re starting to see more signs of supply chain disruption filtering through to working capital performance.”

These issues are exacerbated by rising inflation (which the report predicts will continue for the next two years) and less access to borrowing due to rising interest rates. With central banks increasing interest rates to combat inflation around the world, corporate cash flows are coming under intense pressure.  The result of this “lending squeeze” will mean that both funding and working capital will become more costly.

Driving Efficiency & Financial Resilience

With predictions of slow and weak growth, stubborn inflationary pressure, and high financing costs, the report encourages corporations wanting to protect working capital, steer through economic turbulence, and boost growth to ask themselves some key strategic questions. For example: 

  • What is the optimal level of working capital for their businesses?
  • What adverse economic developments could jeopardize their working capital position?
  • How can they uncover and release cash that’s tied up?
  • Are operational processes ready to react to future disruption and proactively protect cash flow?

It’s worth zeroing in on that last question about readiness. It underscores the need for companies to adopt automated AR processes to free up working capital not available to treasury and lines of credit. This allows customers to keep spending and minimizes risk, bad debt, and revenue being backed out of the business.

By expanding team capacity and improving decision intelligence, organizations will be able to optimize working capital, brace for ongoing market shifts and volatility, and strengthen sustainable planning and growth efforts.

Improve Resiliency by Optimizing Working Capital

With “wider economic and liquidity headwinds looming” and debt funding becoming more expensive, the PwC report indicates that companies should “rethink” the way they approach working capital and stock reduction write-downs.

“The pressure on liquidity is steadily increasing,” states the report. “This makes it more important than ever to sharpen your focus on cash flow management and drive working capital optimization.”

But just how to get there? Is there a way for companies to achieve accounts receivable excellence in order to mitigate the evolving pressures on working capital?

BlackLine answers that question with a resounding yes. We’re accustomed to working with organizations needing to protect working capital so they can optimize AR business performance and soften the impact of inflation pressures, interest rate hikes, and supply chain bottlenecks.

We do this through the adoption of next-generation, intelligent AR automation, an approach that gains efficiencies across processes, departments, and global entities, saving many hours of staff time and, even more importantly, strengthening organizations’ ability to navigate unpredictable, volatile market changes.

By replacing inefficient, manual AR processes, companies can increase working capital. They are also better able to manage behavioral changes of customers facing cash crises, work through supply chain disruptions, and quickly prioritize payment processes, effectively reducing days sales outstanding (DSO) lag time.

Accounts receivable optimization helps to offset the problems created by operating in “just-in-case” mode and address issues in holistic, sustainable ways, such as:

  • Optimizing business performance. Increases working capital and availability of cash that are critical to a company’s success; collects more cash and significantly reduces DSO by increasing overall productivity and prioritizing the actions that have the highest impact.
  • Maximizing AR team capacity and efficiency. Improves productivity and morale while reducing costs by eliminating manual and error-prone processes; elevates control, gains visibility, and measures all parts of the process while achieving global standardization.
  • Elevating AR intelligence and data-driven decisions. Improves clarity and real-time decision intelligence by providing the most accurate, up-to-date data that’s critical for sales, operations, and treasury departments.
  • Improving customer and business relationships. Better communication and operational efficiency allow companies to become more reliable, trusted business partners, which could not be more important in challenging times.

According to the report, companies trying to protect working capital are sitting on unused resources. In fact, PwC estimates that companies have on their balance sheets €1.49 trillion in excess working capital, “money that could be put to much more productive uses.” One effective use of this surplus would be to automate AR systems. 

This blog post was originally published on the BlackLine blog.

Read more about Modern Accounting:

Modern Accounting: Adjusting Journal Entries

Modern Accounting: Highlights from Beyond the Black 2022

Modern Accounting: Does Your Accounting Team Have SMART Goals?

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