Engage the AR function as a strategic partner for growth

Forward-thinking organizations and strategic CFOs are always on the hunt for ways to improve cash flow and optimize the finance function. 

According to a recent Gartner survey, four out of the five top priorities for CFOs in 2023 involved bringing about significant strategic change within the finance function, particularly via new technology and data. These same savvy CFOs also realize the power of the accounts receivable function to future-proof the business. Since AR teams are often the first point of contact for existing customers who have questions, arming them with new technology transforms them into the CFO’s secret weapon. AR then becomes a force that can improve customers’ long-term value and satisfaction. 

Historically, finance has been viewed solely as a back-end department, but as the push for automation spreads across businesses, AR teams are increasingly playing a larger role and serving as a partner for growth.

Improving customer relations and cash flow

In the era of social media, customers can make or break a brand with negative online reviews. It’s critical for business leaders to understand their customers and deliver exceptional service across all touchpoints, from sales to finance. The finance function provides CFOs with a distinct perspective into the customer journey as this department is often the front line for existing customers who may be confused or concerned about a transactional process. Given the right tools, AR staff can provide an enhanced level of understanding that strengthens customer relationships with the ability to solve recurring problems, thereby increasing the chance of repeat business.

Because customer trust must be earned at every turn, a positive experience in the early stages with the sales team can turn negative quickly with mistakes in invoicing. Implementing automated processes can propel the AR team to become the pinnacle of great customer service and drive growth as a result. AR automation applies digital technology to the more repetitive tasks associated with billing, payment collection and reconciliation. Contrary to misconceptions, automation doesn’t replace staff but, instead, encourages employee engagement with higher-level activities. Additionally, AR automation not only streamlines internal AR processes, it also improves external customer relationships.

Empowering employees for more strategic tasks

According to research from the Institute of Financial Operations and Leadership, more than two-thirds of finance teams still manually key invoices into ERP accounting software, and 58% spend more than 10 hours a week processing invoices and administering supplier payments. AR teams can get bogged down by mundane and time-consuming tasks that often preoccupy and frustrate employees, such as manually recording data and pursuing outstanding payments. Utilizing automation, finance teams can increase productivity, reduce errors and capture more time for strategic and creative planning. 

Deploying the right technology means your AR team spends less time gathering and correlating information and more time analyzing and predicting data for strategic decision-making. They can then use resolution workflows to automatically approve disputes for write-offs and prioritize those that need human intervention. By refining AR processes that free up cash and fortify working capital, CFOs shift to a proactive mindset in managing collections.

Fostering growth across the enterprise with greater visibility

The impact of providing AR staff with automated AR processes goes far beyond the finance function. AR staff can play a significant role in accelerating growth by collaborating with sales, customer service and other departments. For instance, finance teams can share their centralized data on a customer’s payment history to help sales determine which accounts could be more profitable. Another tactic is to embed artificial intelligence in the platform, so trends can be easily identified, making it possible to predict future behavior. These insights help sales make more informed decisions about which accounts to pursue, what types of credit to extend and how to develop pricing.

Likewise, CFOs can tap into this crucial data to develop more accurate cash forecasts. Key performance indicators, such as the percentage of customers who pay late, unreconciled items and monthly write-offs, help CFOs communicate a company’s financial well-being to the C-suite. By using these cash flow data points in strategic meetings, CFOs can provide clear financial context to steer decision making.

Why AR is a CFO’s key partner

The tools needed to convert the finance function into a growth driver are already there, but the mindset must come from the top. CFOs who encourage executive teams to embrace new technologies reimagine the AR function as a key strategic business partner.

While it’s difficult to predict what’s in store for the economy over the next year, CFOs can start future-proofing the business by harnessing the power of what has historically been thought of as back office by thinking of this department as a transformative solution that has the capability to nurture and enact a positive customer experience.