While the fears of economic uncertainty and global recession are unsettling most businesses amid the COVID-19 pandemic, focus on accounts receivable—minimizing risk, improving cash flow and optimizing working capital—has become paramount for every business. Enterprises are focusing on coming up with a profitable order-to-cash strategy to stay in the game in these trying times.
CFOs, treasury and order-to-cash (O2C) teams are now defending their business health from the COVID-19 impact much like the front-line doctors and healthcare workers saving lives during this pandemic.
As we continue to wage an uncertain battle, the last few months have been incredible – how the back-office finance in almost all global companies has responded so strongly to the biggest disruption and switched swiftly to “work from home” to maintain business continuity.
Now it’s time to use every accounts and finance software to steer your cash flow and business through this storm. The true test of leadership is how well you function in a crisis.
Here are eight imperatives we believe can help global receivables process owners and treasury leaders in managing their operations during this period of remote working and of rapid economic uncertainty.
1. Connect, Lead, and Inspire Your Remote Workforce
If any of your team members is infected by COVID-19, offer support and resources to help them take care of their health. Business continuity is the most important aspect during this time. Ensure IT support to enable necessary access to the core financial and order-to-cash systems to work from home safely and securely. Manage daily meetings using web conferencing.
Your leadership is at test now. Building a purpose, goal setting and communication are very critical. Managing your remote workforce and helping them balance work and personal life can help you make a difference.
2. Leverage Digital Tools to Minimize Manual Activities
Your workforce productivity as well as your customers’ attention will be much lower now. However you can’t take a chance with these. Hence you need to find ways to minimize the burden of manual activities on the team. Exploring digital alternatives for manual credit application processing or manual entries from checks, remittances, lock box images etc., can help.
An integrated accounts receivable automation software with support to other critical financial functions such as collections, deductions, cash application, EIPP, etc. should be a part of your digital order-to-cash strategy.
Make sure you automate the reminder letters and provide mobile payment options. Leverage accounting automation tools and communication tools you have to the best and explore the functionality you have ignored so far in these tools.
We are here to help you during these times and we have opened free access to our cloud-based productivity tools—credit, collections, cash applications, mobile payments—and help at https://www.emagia.com/covid-19/
3. Prioritize on Data-Driven Order-to-Cash Strategy to Reduce Risk
Having daily visibility on your global customer credit portfolio, assessing and understanding the overall risk is important. Factor in the impact of COVID-19 on the industry, country, region and others. For every new customer and also for credit line extensions of existing customers, ensure tighter control on the credit granting process.
Setting triggers on your portfolio will help you monitor, manage and refine your enterprise credit risk strategies dynamically during the pandemic. Stay alert to changing dynamics and risk conditions.
4. Focus on Maximizing Cash Flow from Receivables
It’s time to reach out to your customers for payments. Hence put the rigor on your global collections processes but with a very sensitive localized approach. Remember, your customers are also experiencing the pandemic. Focus on your collections strategy with a customer-specific approach.
Pay attention to their past payment patterns and watch out for any changing trends as many companies will delay accounts payable during these times. Leverage collections tools for sharing collections prioritization with your remote workforce, to send mobile-friendly correspondence to your customers.
5. Tighten Upstream Processes Such As Order Processing and Billing
Minimize billing errors by automating orders and billing to avoid costly cash flow problems, using an integrated AR automation tool. Stay on top of disputes to understand root cause and minimize the time to resolve them. Self-service customer portals, online payment options and dynamic discounting are some of the useful tools you can leverage in these times.
6. Manage and Expedite Cash Application
Visibility of cash receipts and cash application efficiency is important during this time. Manual data extraction from check copies, remittance advice, or lock box images can be time consuming and cumbersome for your remote teams. Leverage simple cloud-based cash application automation with remittance data gathering bots, OCR and data extraction tools that can help expedite cash application and strengthen liquidity management.
7. Sharpen Focus on Cash Flow Projections
Leverage AI, cash flow forecasting, and other analytics tools for a 360-degree view of customers. Gather daily updates on collections, receipts, disputes etc. Your data is your goldmine. Short-term rolling window forecasting will be a good way to put tight focus on managing receivables turnover performance. Communicating collections goals to your teams and staying close to understand collections risk is important.
8. Become a Partner to Your C-Suite and Business Leaders
Stay close to your CFO, treasury and business managers and provide timely reports with relevant data and help in working capital planning and business planning. Revising expectations on financial performance and communicating risk is what the business leaders are grappling with. This is your time to become a strong partner in strategic business management.
Digital tools such as automation, analytics and AI (3 As) can help you in these uncertain times. Leverage these tools in all ways possible to stay in control. For CFOs and treasury executives who have been contemplating digital order-to-cash strategy and transformation, this is a wake up call.
Look forward, stay strong and lead with confidence.
As technology partners, we are here to help you during these challenging times. Using robust business intelligence and analytic tools, we can help you run your order-to-cash operations better.
Right now, more than ever, we are leading through our purpose. We believe that opening access to Emagia order-to-cash AI tools is a clear way we can help the order-to-cash community. Get your free cloud-based productivity tools for – credit, collections, cash application, cash forecasting – and expert help at https://www.emagia.com/covid-19/.
Lets lead together.