Controllers Council recently held a webinar on Controlling Cash Flow, Processes, and People Within A/R, sponsored by Gaviti. Gaviti is an A/R collections management and automation platform, which helps you streamline your invoice to cash management flow.
The subject matter expert and speaker, Rebecca Gerger, is an eight-plus year veteran of research and B2B sales ranging from complex enterprise-level software in the field of A/R automation, workforce management and portfolio management. She has supported hundreds of businesses alongside their journey to adopt software solutions in a variety of industries. Rebecca is a senior account executive at Gaviti, working with clients such as PwC, Monday.com, EY and more. Rebecca is a competitive weightlifting athlete and part-time CrossFit coach.
Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.
Why is A/R truly at the center of businesses today as opposed to yesterday?
Cash flow’s always been an issue for companies just as health is to the body, but ultimately why specifically now is working capital standing at the center of businesses? The first thing, of course the overarching issue is that there’s a lot of shifts occurring in the global economy. We all know this. We all live in this, both as individuals and as companies, but higher inflation rates, and just ultimately a lot of vulnerability within the global economy is making it so that working capital sits at the center of a lot of the conversations within businesses. Everyone’s trying to get working capital where possible. People are trying to collect wherever there’s opportunity and companies themselves find it hard to give up that working capital to pay their clients themselves.
We’re also seeing from just a department level, departments within companies are being asked to do more with less and finance is not an exception to that rule. In fact, because of these shifts, ultimately we see increased output expectations from finance teams, and that really is an issue because I’m sure many of the teams we work with, they tell us it’s just very, very hard to win that, I guess you could call it war, but the company itself views finance a lot of times as a cost center, as opposed to bringing more revenue, right? How do we really navigate with that environment? Then last is we’re seeing within A/R teams, there’s a high employee turnover and that’s really made worse by the fact that there’s very volatile… Shared internally, employee issues, especially within the United States, it’s very hard to find a quality hire.
What is the traditional A/R approach?
Within the traditional A/R approach, you’re going to have your sales reps, finance teams, and collection teams’ part of that process. It really depends on the industry as well as the size of the company, how involved sales is versus the collections team and so on and so forth. You could be reaching out to your clients daily, weekly, monthly, maybe based on aging, different frequencies. Then ultimately this is occurring through Excel spreadsheets. We might have a manual outreach process via emails, maybe we’re prioritizing based out of aging reports. Then maybe some companies have some layer of dunning already that they’re doing as well alongside that outreach to clients on aging.
Traditional Approach to A/R
The benefits are very convenient and controllable. Smaller and growing companies, when they start off with a smaller group of clients, it’s working, they have high engagement with their clients. They have great relationships. The collectors know how to reach out, and that really is controllable until a certain threshold.
Traditional approach does have a limit. As the volume of invoices and customers increases, that traditional method really turns into more of a costly and inefficient process for the business. It’s going to have negative effects on that cash cycle and it’s going to ultimately make it so that the work we’re putting in is not necessarily what we’re getting out.
The Evolution of A/R
When we think about the evolution of A/R, we’re talking more about going from a traditional process to something that’s more efficient, something that values proactive decision making, something that leverage precision, as opposed to simply manual and maybe non misaligned tasks.
Then it’s also going to be controlled and throughout the process, have that type of data-driven analysis as to where are we going, where do we want to get going, and what is it that we’re doing or not doing to continue to improve upon that? So, we’re going to get better and better outcomes with our cash conversion cycle. Ultimately meaning we need to be applying an overarching strategy and that really, the core benefits can be broken up into two categories:
Accelerate Cash Flow
- Reach all customers
- Preemptively escalate
- Reduce customer friction
- Collaborate and align internally
- Capacity to monitor team execution
- Control outcomes
But bottom line is that we’re going to accelerate our cash flow and maximize productivity. This is going to be done, again, what’s the causality behind accelerating cash flow and maximizing productivity is that when we have the type of overarching A/R strategy, it aligns with best practices, such as automate, segment, centralize, communicate, streamline, and execute.
To view the complete webcast panel discussion, link to the video archive here.
ABOUT THE SPONSOR:
Gaviti is a platform for collections teams that enables SMEs to get more of their invoices paid faster. Our solution optimizes the complete collections process, from automating highly personalized dunning emails to perfecting task management. Collections teams and their leadership will find payments forecasting, risk scoring, and actionable insights to enhance collections performance over time. Your in-house collections team will collaborate in the centralized workspace available to all stakeholders. Gaviti is ERP agnostic allowing SMEs to start optimizing within one billing cycle.