# Companies that don’t upgrade their financial processes this year will get left behind
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-01-19
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: The Importance of Accounts Receivables Automation in
Meta Description: Learn how automating AR processes can improve cash collection efficiency, reduce errors, and maintain strong customer relationships during economic crisis. Find
URL: https://financedigest.com/companies-that-dont-upgrade-their-financial-processes-this-year-will-get-left-behindhtml

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_By **Anthony Venus,** CEO of Yaypay_

Accounts receivables (AR) is often a misunderstood department. Not only is AR all about financial operations and collecting money, but it is also at the coal face of customer relationship management. It [turns out that managing these credit-based relationships becomes even more important in economic crises](https://www.financedigest.com/back-to-the-land-lebanese-family-turns-to-farming-to-survive-crises.html "Back to the land: Lebanese family turns to farming to survive crises"). COVID has brought a fresh urgency to AR, and in recent months we’ve seen that AR is not only critical to [business growth](https://www.financedigest.com/how-technology-consultants-impact-business-growth.html "How Technology Consultants Impact Business Growth") but also survival.

The [pandemic has wreaked economic carnage on business](https://www.financedigest.com/tripling-the-size-of-my-business-in-the-pandemic-the-mistakes-made-and-lessons-learned.html "Tripling the Size of my Business in the Pandemic — The Mistakes Made and Lessons Learned") and society. Cash has truly become king, and [companies have scrambled to shore up their liquidity](https://www.financedigest.com/companies-are-empowered-to-retain-control-with-alternative-routes-to-liquidity.html "Companies are empowered to retain control with alternative routes to liquidity") in a bid to survive, often tapping government support schemes. But they also need to get their invoices paid in a timely manner, while navigating the delicate fact that many [customers are navigating their own financial](https://www.financedigest.com/financial-companies-delivering-better-value-for-customers-in-loyalty-programmes-compared-to-other-sectors.html "Financial companies delivering better value for customers in loyalty programmes compared to other sectors") challenges.

Companies we have spoken to tell us that AR has become a C-suite issue with chief executives closely monitoring debtor days and asking for daily updates. But AR teams have had a [tough time](https://www.financedigest.com/building-economic-resilience-in-tough-times.html "Building Economic Resilience in Tough Times") of it. Businesses that still rely on spreadsheets, paper files and physical reconciliations all performed from a central location have struggled to [work separately from home](https://www.financedigest.com/remortgaging-a-home-to-buy-to-let-how-does-it-work.html "Remortgaging a Home to Buy-to-Let – How Does it Work?"). Chasing down late payers by phone is traditionally an antagonistic affair made harder with customers [working from home](https://www.financedigest.com/working-from-home-what-does-it-mean-for-your-taxes.html "Working from home: what does it mean for your taxes?"), and errors can sour an important relationship. This has only become more challenging during the downturn.

These ‘analogue’ pain points served as the tipping point for some companies, who have used the pandemic as a reason to speed up the [automation of their business processes](https://www.financedigest.com/automating-business-processes-is-essential-to-digital-transformation.html "Automating business processes is essential to digital transformation"). In fact, software [group Twilio estimates that six years’ worth of business](https://www.financedigest.com/uk-needs-to-make-politically-unpopular-reforms-to-boost-growth-business-group-says.html "UK needs to make politically unpopular reforms to boost growth, business group says") digitalisation has been crammed into just a few months. Effective SaaS tools have finally freed AR teams from the tyranny of office-based working. Financial controllers have seen that it really is possible to manage the AR [functions](https://www.financedigest.com/easing-the-burden-of-data-overwhelm-in-finance-functions.html "Easing the burden of data overwhelm in finance functions") of an entire company, from your kitchen table with a laptop.

The [automation of financial processes](https://www.financedigest.com/the-implantable-biomaterials-market-to-move-ahead-on-rpa-robotic-process-automation.html "The Implantable Biomaterials Market to move ahead on RPA (Robotic Process Automation)") such as AR has become a necessity. The mass adoption of remote working and the need to reduce costs means that companies must make [finance functions](https://www.financedigest.com/why-do-modern-finance-functions-strive-for-automation.html "WHY DO MODERN FINANCE FUNCTIONS STRIVE FOR AUTOMATION?") more agile and efficient. Those that fail to [automate in 2021 will be at a competitive](https://www.financedigest.com/how-automation-gives-fs-leaders-a-competitive-advantage.html "How automation gives FS leaders a competitive advantage") disadvantage, forced to dedicate more manhours to AR and wait longer to get paid less money. Here’s why:

**More effective cash collection**

Getting paid can be an emotional process that’s prone to human error such as lost invoices, incorrect balances and missing information. These errors can strain client relationships. But [clients can also be slow to pay](https://www.financedigest.com/impact-com-closes-2021-with-new-google-pay-integration-150m-in-funding-and-51-increase-in-clients-yoy.html "impact.com closes 2021 with new Google Pay integration, 0M in funding and 51% increase in clients YoY") up, especially during a downturn. Debts can turn ‘bad’, punching a hole in a company’s [balance sheet](https://www.financedigest.com/ecbs-villeroy-lays-out-plan-for-shrinking-balance-sheet.html "ECB’s Villeroy lays out plan for shrinking balance sheet") and threatening insolvency.

Automated processes driven by artificial intelligence (AI) can do a more efficient job than humans in executing routine [communications and tasks while at the same time keeping customer](https://www.financedigest.com/why-poor-customer-communication-is-holding-open-banking-back.html "Why poor customer communication is holding open banking back") engagement consistent and on message. AI processes can also help companies manage credit risk in [real time](https://www.financedigest.com/how-real-time-data-innovation-is-driving-up-customer-experience-in-fintech.html "How real-time data innovation is driving up customer experience in fintech"). AI is also getting better at correctly reading the emotion and tone in client emails: spotting subtle annoyance, stalling tactics, and acting on it through automated messaging. That can make all the difference in ensuring you are front of line for getting paid.

**Recruitment edge**

More and more [companies are offering](https://www.financedigest.com/factbox-european-companies-offer-one-off-bonuses-hike-pay-amid-cost-of-living-crisis.html "Factbox-European companies offer one-off bonuses, hike pay amid cost-of-living crisis") flexible working, having quickly adapted to a new way of operating through the pandemic. This is also increasingly seen as a way to [maintain an edge](https://www.financedigest.com/fintechs-should-accelerate-into-edge-computing-to-maintain-momentum.html "Fintechs should accelerate into edge computing to maintain momentum") in the job market, with talent seeking flexibility. Three quarters of U.K. companies surveyed by the Institute of Directors said they plan on [maintaining home working](https://www.financedigest.com/how-to-maintain-physical-and-mental-health-while-working-from-home.html "How to maintain physical and mental health while working from home"), and more than half intend to reduce their long-term use of workplaces. Companies that cannot manage financial processes from home with a decentralised [team](https://www.financedigest.com/finance-teams-using-ai-outperform-peers-as-demand-for-skills-grows.html "Finance Teams Using AI Outperform Peers as Demand for Skills Grows"), stand to lose out.

**Smaller payroll**

Automating [back office](https://www.financedigest.com/google-mandates-workers-back-to-silicon-valley-other-offices-from-april-4.html "Google mandates workers back to Silicon Valley, other offices from April 4") processes reduces manhours and improves productivity: you can do more with less. Companies looking to [control cost](https://www.financedigest.com/back-to-basics-for-cost-control-as-the-usual-levers-lose-value.html "Back to basics for cost control as the usual levers lose value") during the economic downturn will want to keep a lid on headcount. Many have also seen the [volume of transactions increase with the value](https://www.financedigest.com/fluid-coolers-market-by-covid-19-impact-analysis-volume-and-value-revenue-business-opportunity-future-projections-and-key-trends.html "Fluid Coolers Market By Covid-19 Impact Analysis – Volume And Value, Revenue, Business Opportunity, Future Projections, And Key Trends") per transaction significantly down. Companies we speak to that have managed to increase their revenues through the pandemic [say that automating their accounts receivables process means they haven’t had to take on more staff to deal](https://www.financedigest.com/g20-to-back-global-corporate-tax-deal-says-french-finance-minister.html "G20 to back global corporate tax deal, says French finance minister") with the added invoices, collection and managing credit risk. They empowered their existing team to scale with smart and efficient technology.

**Laggards’ risk**

Many [companies began their digitisation journey well](https://www.financedigest.com/corporate-wellness-market-insights-by-leading-companies-and-emerging-growth-till-2026.html "Corporate Wellness Market Insights by Leading Companies and Emerging Growth Till 2026") before Covid struck. The pandemic [means that this transformation is no longer](https://www.financedigest.com/why-fundraising-no-longer-means-kissing-a-lot-of-frogs.html "Why fundraising no longer means kissing a lot of frogs") simply a ‘nice to have.’ In the accounts receivable department. Laggards that continue to rely on paper or excel based manual processes and that fail to leverage automation to re-engineer the financial and customer processes risk losing their [competitive edge](https://www.financedigest.com/using-cloud-based-communications-to-gain-a-competitive-edge.html "Using cloud-based communications to gain a competitive edge").


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