Why Financial Services Institutions Need AR Automation Right Now

Nicole Dwyer
Financial Services

It’s an unusual time for financial services companies. And difficult.

Recent shocks to overall market supply and demand have created significant disruption to the financial services industry, including stress on available liquidity and limited access to credit. While central banks around the globe have been taking steps to alleviate pressure, most financial institutions are still struggling with managing the day-to-day activities of their business.

One aspect of daily operations that can be dramatically improved is accounts receivables. And the way to impact it is through automation. A smart AR platform that provides automation and machine learning throughout the entire credit to cash cycle will not just help businesses survive today’s economic crisis, but will provide a foundation for success as we emerge from it.

Automating your AR processes will positively impact four key areas of your business:

  • Employee satisfaction
  • Cash flow
  • Customer happiness
  • Forecasting and future planning

An automated AR system can alleviate both the old and new burdens of AR management. A smart AR platform will:

  • Automate the repetitive tasks that eat up valuable employee time
  • Provide anytime, anywhere access so employees can manage their workflows from their kitchen table, their living room or their office
  • Integrate with your ERP, CRM, and billing software so all customer data is consolidated in one easy-to-access portal
  • Predictive analytics and automated workflows that help employees prioritize which tasks require their immediate attention
  • Provide a structured, consistent collections workflow to manage cash flow activities and expectations
  • Send automated communications to ensure that employees and customers are both alerted to invoice status, payments due and any issues around disputes
  • Allow customers to access and pay invoices through a centralized customer portal
  • Track and report key metrics in an easy-to-read dashboard that shows the health of the business 

When considering the above features and benefits in AR automation, then it’s clear why the actual impact to your business makes AR automation not a nice-to-have, but a must-have for your business.

Improving employee satisfaction

Your employees are facing a whole new stress today. In addition to new regulations about social distancing and work-from-home requirements, your business and your employees are trying to adhere to industry compliance standards that were never designed for remote work. In the case of your AR team, you layer upon that the fact that many of their tasks were manual activities that shuffled physical paper from mail, to desk, to file.

With tools and systems that help employees prioritize their day and easily access the information they need, you benefit from:

  • Reduced stress on both your business and your teams
  • Up to 3x improvement in productivity and efficiency
  • More focus on cash-generating, essential activities
  • A happier work environment - wherever they happen to be sitting.

Increasing cash flow

Cash flow is a challenge in all industry sectors right now. In some areas, there is bona fide restricted cash. In others, there’s hoarding any available cash until there’s a more stable sense of “what’s next.”  Regardless, business does not survive without working capital. 

The most widely recognized challenge with cash flow is an unstructured or inconsistent collections process - one where both the AR team and customers are unclear on which invoices are due, how much is owed and when the last time any communication occurred. This is common when your AR processes are still manual and often paper-driven, with customer information scattered across multiple systems.

Automating your AR process can help drive a stronger, healthier cash flow for your business by:

  • Ensuring no invoices “fall through the cracks”
  • Prioritizing activities for the AR team based on urgency and impact to the business
  • Providing self-service so customers can manage their business on their time, not hindered by your business hours
  • Offer flexible payment options to accommodate changes in business and improve the likelihood customers can pay

Customer happiness

Customers are as concerned about their businesses surviving in today’s economy. Consumers are stressed by an unstable job market and uncertainty about the future. All of this impacts how your customers are feeling - and how they are feeling impacts your business.

This means anything you can do to help remove friction from your customers’ interactions with you and your business is important.

  • A self-service portal gives them the power to manage their business on their time
  • Regular communications keep customers informed of the state of their account with you, giving them insight and control
  • Flexible payment options shows you’re sensitivity to today’s conditions, allowing both you and your customer to figure out the best way to continue working together
  • Proactive and empathetic outreach through automated and individual communications can increase share of wallet, even during stressful economic times
  • A thoughtful, frictionless experience increases customer loyalty, which influences customer retention and acquisition in any market

Forecasting and future planning

Forecasting and future planning is key to continuity planning, and critical at a time when everything has gone sideways. Expectations have to be adjusted and new parameters for survival and success explored. For financial institutions, this includes how you manage those day to day operations - when are offices and branches open, how are you managing traffic flow, which client services are available in the branch versus online? 

And which new processes you are implementing today will become permanent services?

To be able to plan for the future and determine where you will be investing in your business, having some visibility into your cash flow is necessary. A smart AR solution helps you get the metrics and data you need, by:

  • Visibility and transparency across individual customer accounts and by customer segments for customer management and trending data
  • Consolidating customer information from various sources (ERP, CRM, billing software) so you have a full picture of your customers’ stories
  • Providing key performance indicators that allow you to assess if particular points in your AR process need adjustment for improved performance
  • Predictive analytics that show you where you’re trending positively - and what needs your attention

It may be hard for financial institutions to be thinking of making major changes to any internal systems right now. However, the right automated solution today can make a huge difference to your success tomorrow. Look for a cloud-based solution. Talk to your peers and to vendor references. Download The Definitive Guide to Buying an Automated AR Solution and get a step by step guide to the features you need, expectations in the buying process and other key attributes to consider. 

Implementing a new AR solution does not have to be complicated or expensive. But it is smart. 

Nicole Dwyer
About the Author

Nicole Dwyer is Chief Product Officer for YayPay, bringing more than 10 years’ experience in accounts payable and receivable technology to ensure YayPay continues to meet the needs of its customers. Having spent her entire career in commercial payments, Nicole understands high- and low-value payment systems, the complexities of how businesses pay and get paid, and has worked with distributed teams spanning the globe. She is a graduate of Worcester Polytechnic Institute. Residing in New Hampshire with her husband, daughter, and son, they spend their time outdoors and creating new adventures.

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