Accelerating Receivables & Cash Inflows

A robust, well-managed accounts payable process helps accelerate receivables, lower debt and maintain the required cash flows needed for business sustainability and growth. Small and mid-sized businesses have a greater need for maintaining sufficient cash flows and liquidity as the scope for revenue generation through other channels like securing microloans is difficult. Raising funds through angel investing or crowdfunding is usually reserved for startups and companies projected to be on the cutting edge of innovation and positive market disruption. Moreover, if you’ve been in the market for a while, you need to be able to show profits and considerable potential for growth in order to secure monetary assistance from financial institutions.

One thing organizations can do differently to improve cash flows is optimize internal processes that aid in lower operating costs and better productivity outcomes. Process optimization is now a critical component of business strategy development for many, and companies are doing all they can to lower the costs of operations wherever possible.

The chances of errors creeping into traditional administrative and back-office processes are the greatest as these are mostly manual and paper-based. Manual effort is often error-prone and slow. A good way to reduce the dependence on manpower for routine, repetitive document-based processes in the back-office is through intelligent automation. Intelligent process automation has the effect of lowering the burden for human beings to do repetitive, paper-driven tasks like data entry, filing, sorting, and validating physical paper documents for authenticity and correctness through multiple back-and-fro checking and cross-checking. This is time-consuming, laborious, and most importantly, error-prone as a single missing file or wrong data entry can lead to poor or false processing outcomes.

Another aspect of good cash management is the frequency and speed with which companies collect receivables. The sooner a company accelerates payments processing and sends invoices to customers, the faster and better the chances of them securing receivables and cash inflows. By optimizing accounts payable, there’s a chance for companies to maintain healthy cash reserves. There are specific tasks in accounts payable that can be automated for better and more accurate returns.

Invoice Processing Errors: invoice processing has traditionally involved heavy manually-driven paperwork that often led to errors, missing data, slower operations, and also low productivity. Just the fact that a wrong data entry during billing could lead to overcharging a customer bodes ill for you getting early payments or even seeking repeat business.

Poor Visibility: manual paper-driven processes like invoice processing and billing lack visibility. Staffers may have to go back and forth trying to confirm the validity of a purchase and seeking approval for billing a customer. Manual data validation and approval can take a lot of time, leading to delays in cash inflows and receivables. There is also the risk of not knowing if a customer has already been billed and sent an invoice. Poor transparency along the invoice processing chain can reduce a company’s chances of receiving collections quickly and maximizing gain.

Missed Opportunity for Repeat Business: sending a wrongly billed invoice can have the effect of lowering customer morale and engagement with your company. In a highly competitive marketplace, the customer is always king and always right. By not banking on the opportunity to impress the buyer, businesses risk losing out on repeat business and also conceding a valuable customer to their competitors.

Intelligent automation employs digital transformation technologies like AI and machine learning to perform straight-through invoice processing. This lowers the burden on staff to perform mundane, repetitive tasks and increases the chances of delivering accurate invoices to the customer. An intelligent process automation platform performs data acquisition and validation, and export of approved data to a connected ERP software system. The elimination of manual effort during the entire document-dependent task of invoice processing reduces chances of sending wrongly billed invoices to the customer. Intelligent automation also accelerates customer engagement and response to an invoice, enabling companies to secure faster cash inflows.

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