A few weeks ago, I read “Finance Pros Say You’ll Have to Pry Excel Out of Their Cold, Dead Hands” in the Wall Street Journal and I’ve been thinking about it ever since. I happen to be on a mission to bury Excel and in process help save Excel users – at least when it comes to managing their accounts receivable.
Two years ago, I co-founded YayPay — a company with a mission to make collecting money fast, easy and highly predictive. Prior to YayPay I owned several businesses and experienced first hand the pain that comes with running your collections process in Excel. I learned that if you aren’t very, very careful, simply using Excel may put your entire business at risk.
I needed to know what money to expect in my account and when. I needed to keep my cash flow consistent. I needed every edge that I could get. I wanted to be in control and I just couldn’t get that with Excel.
If I spent hours staring at my Excel aging report I might figure out who to chase up for payment but the process was very manual. There was no indication of recurrent problems like clients who made a habit of paying late.
My finance team tried to figure out hacks and develop strategies on how to align with each other by setting up multiple recurring meetings, all while trying to keep on speaking terms with the sales team in case they needed them to help collect money too.
They established procedures, pounded those phones and sent out email after email — all manually regardless of the payment history of the account. It wasted a lot of time and the results were mediocre. They would spend too much time on those customers who were going to pay us anyway and not enough time on those that needed the most attention. The answers were lurking deeper in the historical data and this was much more than excel could handle.
That’s when part of the idea for YayPay started forming. Ultimately we developed YayPay out of necessity. There had to be an easier way, so automating the cash collection process became, well, let’s be honest with the wording – an obsession. Yes, I’ve said it. I’m obsessed and it is with absolute conviction that I believe you should join me by digging a hole and burying excel and pledging never to use it again to manage your accounts receivables. It’s just too risky and too painful. Let us come out once a year on the day of the dead to remind you why you buried it but for god’s sake where a protection amulet.
YayPay was created to ease all the collections pains we have all lived through. It was designed to keep all accounts receivable information from your ERP, CRM and other billing applications consolidated in one place. All the logged calls, notes & emails — all the activity and detail readily accessible.
You can create collection workflows on the fly, set credit limits for clients based on their payment history, and update their billing contacts. Everything is easily accessible and updated in real-time. There’s no fussing with complicated formulas or making manual adjustments to figures. No worrying about small errors being next to impossible to find.
If accounts receivables automation is the next evolution in SaaS accounting why do companies still use Excel? Two reasons:
1. It’s the devil they know: According to that same WSJ Article “One of the reasons Excel endures is the sheer amount of time employees spend futzing with it.”
This makes sense. Most companies start out using Excel when there are not too many entries to keep track of. They stick to it when the company expands because of their familiarity with it, not because it is an easy system to use. Excel is a very familiar tool — and there is a natural resistance to change.
Financial organizations stick to it even though a small mistake in a formula or one decimal point added where it shouldn’t be — and the whole system could be thrown out. This can be incredibly costly. Referencing the same WSJ article, the Clallam County Sheriff’s Office lost almost half a million dollars because of a mistake in Excel… And mistakes like this happen all the time. They happen because in Excel you have to manually apply payments to the correct invoices, transfer the data across and hope that all your formulas are exactly correct. There’s an insane amount of extra work associated with it. It’s like operating your computer on DOS instead of MacOS or Windows. Although DOS was a breakthrough in its day, we have happily moved on along way since then. Yet doesn’t the sheer room for error and the time it takes to manage your AR in Excel bring to mind Einstein’s very definition of insanity? The one that states: “doing the same thing over and over again and anticipating different results”?
2. AR pros don’t know that automation is an option: The idea of managing collections with the assistance of Machine Learning and AI is a new concept so a lot of financial professionals simply do not know it exists. Taking the leap from the old world of excel into the new world of data science?
Excel has been around since 1985. Just try Googling “accounts receivable templates” you will find hundreds of thousands of results — most are downloadable Excel templates.
It’s understandable that, unless you are a techie, keeping up with all the innovations is not always easy. Those on top of their game, however, the forward-thinking early adopters, understand very well how much they have to gain with AR automation and what immediate impact it can have on their bottom line. Like reducing their DSO by up to 30%!, saving costs, creating a better finance work environment with less administrative work and more time to focus on the customer service aspects of AR.
Excel is dead for accounts receivables Industry.
YayPay is forging ahead into a new era of autonomous commerce.
I’m very excited to be part of this and I believe you will be too.