Controllers Council recently held a panel discussion entitled, The Digital Shift in AR: Smarter Strategies for Better Outcomes, sponsored by Billtrust.
Billtrust is a B2B order to cash software and digital payments market leader. Billtrust helps the world’s leading brands move finance forward with AI powered solutions to transition from expensive paper invoicing and check acceptance to efficient electronic billing and payments.
Our subject matter experts (SMEs) and panelists were Joy Mbanugo, Mike Passifione, and Todd Bailey.
Joy Mbanugo is Chief Financial Officer of CXAI (pronounce Sky), a Palo Alto-based technology start-up. Her 20-year career includes CFO at ServiceRocket, the Controllership office at Google where she managed $100 billion in cash, FP&A at BlackRock, and a 12-year tenure at EY. Joy is also a private investor and limited partner in various funds, including women-led ventures. Joy holds a Juris Doctorate from Cleveland State, a Master of Accountancy from Case Western Reserve, and a double bachelor’s degree in accountancy and Black World Studies from Miami University of Ohio.
Mike Passifione is Vice President, Pre-Sales & Payments at Billtrust, and former Wells Fargo executive. Mike studied at California Polytechnic State University.
Todd Bailey was Chief Business Officer at X-Golf America with F&A responsibilities, and former Controller and Business Intelligence Director at Relativity Software. Todd had a 4-year stint in public accounting at CROWE. He earned a Masters and BS Accounting from University of Illinois.
Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.
1.What specific AR functions are automated, or planned to be automated?
Todd: I’ll go back to the software company years at Relativity. I think our biggest challenge was the creation of invoices themselves and month-end billing, where this was usage-based. Then you’re comparing to a certain monthly threshold, a certain monthly volume that the customer bought. Some of the challenges were collecting the usage data from the customers, installation of the software, processing it, figuring out how much they did use, and then actually creating the invoice. We had to think big, but we had to start small because we couldn’t automate every aspect of it right away, therefore, we started with the invoice creation process.
Joy: There’s part of our AR process that is automated, but there’s some room for improvement. Right now, I do have the benefit of having one tool where I go in and hit a checkbox and say, yes, this invoice bill looks good, send it to a customer. That tool then kicks over to our ERP and then the ERP generates an invoice and then that invoice comes to the team and the team sends an email. There are still some manual processes in there to meet, but I’m working on to create APIs between different tools to make sense.
Mike: Oftentimes when we talk to customers or prospects, they’re having cash application issues. So, some have started automating some sort of invoice process, but there’s a lot more advanced ways of doing that. I will tell you that Billtrust does help people do career defining work in the AR world.
2. What are some of the challenges you experienced when moving from manual processes to automated, and how did you overcome obstacles?
Joy: I’m going to speak broadly because I’ve worked at 5 companies now, so I’m not necessarily talking about my current employer, but what I’ve seen, I would say accounting and finance systems in general, is that certain teams sometimes get prioritized and then lesser teams get deprioritized and that team that gets deprioritized kind of flounders for a while. And so, you know, at a different point in time in my life, I worked at a big company and part of the business got all the time, love and attention, and then the business that didn’t just kind of floundered and everything was still manual. In that instance, I didn’t overcome it. And then in another position, I would say we installed a collections tool, or the company installed a collections tool and that was great, but there are still a lot of manual process around collections.
Mike: Oftentimes we hear from our suppliers that it’s an IT bandwidth issue or a cost issue. They just can’t privatize it within their walls. I will say that for those out there that are experiencing those same types of issues or hurdles, oftentimes if you look at your payments, you tend to have a real compelling ROI that sits there. And part of that ecosystem we talk about is how you get paid. The cost of acceptance and the interest to fund DSO, all these different elements add up. So, there’s some intangible and some hard tangible ones as well. So many suppliers are accepting credit cards as an example to get payments in the door. There’s a tremendous number of ways in which you can create a much more automated, streamlined, efficient way of accepting just card payments alone, which could equate to seven plus figures to the bottom line.
Todd: Even when we were building business intelligence solutions that were taking reports, then someone in the business was compiling manually and we automated it, is that you’re always going to have holdouts that you need to sell and that you need to convert. It’s highly unlikely that everyone’s going to be on board, that your staff, your team, some people cross-functionally that are bought in to what you’re trying to sell, the vision that you have and that you’re trying to make a reality. And I think that’s a part that I found is that I had to learn how to be a salesperson internally, both on my teams and with peer leaders in the business because you have doubters, you have people that don’t believe that you can do it.
3. How do you measure the success and ROI of AR automation? Metrics? KPIs?
Joy: One that was important in another life was just days to collection, very cash heavy business, relying on cash and I think just that collectability and timing to collection is super important.
Todd: My favorite one wasn’t necessarily a metric, but I kind of started measuring smiles on people’s faces and team members, the team members that were bought in, how less stressed they were during our month end period when things were automated. Another one is you take measurements of how long it was to complete the process and how many people had to be invoiced, then you see how you can reduce that going forward. Also in a growing business, where you’re trying to scale things, it’s not always about how much you save today, but how you’re going to be able to continue to be successful.
Mike: I would just say that we work with our suppliers to understand what their key KPIs are and help drive towards that. So, we take them through a very detailed process when we sell them like AR automation tools. That’s going to clearly depict what the ROI is for them.
4. Are you exploring or implementing AI for AR or other functions?
Joy: Yes, I am looking at implementing AI for AR any other functions as an AI-first company. Just one of my projects for the year is to will look across the board at all the functions, not just for finance, but internally as well, and just trying to find ways to process improvement.
Todd: I haven’t experienced AI yet because it’s kind of like a crawl, walk, run. You’re not going to jump straight to AI. You likely must establish some type of automation base first.
Mike: At BillTrust, we take a little bit of different approach across AI and how it works with our tools. So, we’re blessed enough to have 20 plus years of experience in the accounts receivable universe. So, we have a ton of tribal knowledge here that we leverage to build in that tool. We’re really got so much rich data about buyer history and tendencies and how suppliers’ invoice and vice versa, that we use AI and analytics to kind of drive actionable results. Our approach is how can we create AI and agents that are really going to help drive key questions and create key objectives in the account receivable because if we don’t stay hyper focused there, then we’d be doing our customers of the services. So that’s kind of how we visualize and use AI across our platform.
5. What specific AR functions are automated, or planned to be automated?
To view this question and the complete webinar, download here.
ABOUT THE SPONSOR:
Accounts receivable needs people with vision, talent, and the technological genius to streamline B2B transactions from both sides. And it needs champions of the accounts receivable (AR) department who know their teams’ time could be better spent beyond the monotony of manual keying and paper processes. Billtrust began questioning the status quo in 2001, just as a new millennium was taking off. Perfect timing for the merger of inspiration and innovation to propel real change in AR automation. Today, the company continues its mission to modernize processes for a better balance throughout the order-to-cash cycle. Learn more about Billtrust at www.billtrust.com.
