Blog/Analytics September 1, 2022

CFO Report: Transforming Accounts Receivable into a Data-Driven Strategic Advantage


The B2B landscape is evolving. Technology and automation trends are transforming accounts payable by driving new payment behavior, consequently creating new challenges for accounts receivable. 

In 2022, organizations must have a holistic approach to digitizing their accounting processes. Businesses can remit timely, accurate payments and maintain positive cash flow by automating accounts payable and receivable. 

To learn more about the importance of transforming the accounting department, we connected with Rob Harvey, Chief Product Officer at Sidetrade, the fast-growing, international fintech that is revolutionizing the Order-to-Cash process. 

At OpenEnvoy, we are experts in AP automation, but can you help us understand how AR also plays a role in setting companies apart from their competition? 

Accounts receivable is one of the main customer-facing areas of the organization; it's the department with the most customer interaction after an initial sale. Similar to the ability to remit accurate, efficient vendor payments, being able to deliver a quality customer invoicing and payment experience is a unique competitive differentiator. 

Now is the time for finance leaders to protect cash and optimize accounting on both AP and order-to-cash sides. With more efficient, streamlined processes, the accounting department can offload the manual tasks that limit their strategic contribution to the organization.

Technology is playing a significant role in both AP and AR processes. So how can a busy CFO keep up with the latest automation trends?

I recently heard a quote from a global analyst: CFOs that use AI will replace CFOs that don't. With finance automation playing a more significant role in driving company value and competitive advantage, we see it critical for CFOs to collaborate closely and effectively with their CIOs. 

A significant challenge to effective communication between CFOs and CIOs is that one speaks the language of finance, and the other of technology. 

Recent data shows that 74% of finance leaders see technology profoundly impacting the role of the CFO and at least one third of those leaders are taking the lead in learning about autonomous finance tools.

The desire to innovate goes beyond driving efficiency and creating resiliency. CFOs are hungry for education on digital investment. Modern businesses are looking to generate long-term value and understand that technology is the way to make it happen. 

Realizing success in digital transformation starts with creating a close partnership between finance and IT to position the finance transformation at the forefront of digital priorities.

The market seems to be moving from "cash is king" to "data is king." Why is quality data so necessary for finance teams?

CFOs and financial professionals are diving deeper into analytics as data improves. They can use data, AI, and analytics to develop scenarios that drive strategy and key decisions. 

As teams move away from historical reporting to forecasting future trends, we are experiencing a shift from tactical to strategic planning in every business unit, including accounts receivable. 

So besides knowing how to analyze data, a high-level finance futurist will also possess the creative skill to interpret its meaning—and tell a story. 

Futurist CFOs identify possibilities, select favorable outcomes, and insights to show how the company is performing, where it's falling short, and how resource allocation can achieve goals. 

How do AR leaders and teams move from predictive analytics to prescriptive analytics?

CFOs are trending more towards the use of prescriptive analytics. Predictive analytics identifies "what might happen," while prescriptive analytics uncovers "how can we make that happen." More than ever, it is critical to use insights that focus on where the organization should go rather than where it has been. 

For example, when decision-makers face uncertainty, they can implement prescriptive analytics to identify how to successfully manage situations like rising costs due to inflation or the failure of a second-tier supplier.  

How does AP & AR automation fight inflation? 

Traditionally, there are few levers finance chiefs can pull to combat economic pressures. One example would be pushing inflation costs over to consumers. Unfortunately, while this strategy may sometimes work, it is unsustainable. 

Technology is one of the actual deflationary tools CFOs can leverage. It's time to fight the urge to maintain the status quo and trust the power of digital finance tools. 

The inflationary period we are in is like a ticking time bomb. Collecting receivables is critical, but if your current AP and AR processes are inefficient, your finance department can also be a cash trap. 

To minimize the financial impacts of inflation, finance leaders can take action by investing in preventative finance technology. Traditionally, many accounting tasks have been a cost to the business. Finance leaders can transition the accounting department to the revenue center by using automation to reduce accounting costs and alleviate the manual workload of collecting and remitting payments.

Do you have any final words of advice for finance leaders?

  • Don't slow digital investment projects -  More than ever, now is the time to look into the future and fund the digital bets that will drive your strategic goals. 
  • Leverage tech to fight inflation - Use accounting automation to reduce back-office expenses and reallocate time and money to higher impact projects. 
  • Streamline AR and AP processes - Less is more, optimize your accounting workflows and strive for touch AR and AP processes. This will allow your finance team to focus on delivering value through strategy and productivity.
  • Empower your teams with data -  Machine learning and AI can provide your team with clean, reliable financial insights. Use this enhanced visibility to strengthen your cost controls and boost cash flow. 
  • Choose results-oriented tech vendors - Partner with technology vendors who are dedicated to solving your unique business problems. Your vendor should focus on helping you improve scalability, increase efficiency, and meet your business goals from day 1.

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