Karen Stephen, COO, SurePayd, tells us that 2021 will likely see a shift that will see the potential of Accounts Receivable unlocked by CIOs, CMOs and CFOs.
Our focus is in the digitization and cloud migration of a traditionally manual area of most businesses: Accounts Receivable, a classic back office function, and this focus has given us a front-row seat on what changes 2021 might bring for many organizations.
Accounts Receivable, or AR, is one of the world’s most ancient and unchanged commercial activities. The Code of Hammurabi laid out AR terms for the Mesopotamians as far back as 2000 BC. While the past few hundred years have seen refinements, there have been no dramatic changes until recently.
Where Digital Transformation and automation has taken over in most business areas from customer experience to sales and marketing, AR has somehow been left behind. People are still working off Excel spreadsheets, filling in payment details on a piece of paper or a Post-it, and trying to make a dent in money owed by picking up the phone.
Part of the challenge has been that businesses have traditionally seen AR as largely transactional and unlikely to benefit in a genuinely powerful way from digital re-imagining – thus the area has often been neglected.
The past year and emerging technological trends have proven this thesis wrong and 2021 will likely see a shift that will see the potential of AR unlocked by CIOs, CMOs and CFOs hungry for improved cash flows, secure transactions and additional channels through which to reach and retain the people they do business with.
Cash is now king more than ever before in a post-COVID world because of the inherent business failure risk but bringing that cash in will depend on harnessing the human relationships with the customers who owe money – something that a digital-human blend solution, something we have identified as a relationship engine, enables. A purely manual system, ironically, does not accomplish this because the sheer volume of work makes the human unable to be human when it counts.
One of the drivers of this change toward digital in AR has been the disruption caused by COVID. Typically, the manual nature of AR could be overlooked because it was largely done on-premise. COVID forced a near instant transition to a remote workforce and suddenly employees were being sent home with computers covered with sticky notes. Overnight we saw a demand to apply the same cloud answers for AR that had already been applied to other areas of the business.
In 2021, we will see this trend toward cloud support for the AR department accelerate, but it will likely become more measured and strategic, less reactionary since 2020 taught organizations the limitations of out-of-the-box solutions and the critical need to incorporate security and data integration into the process. The lesson from 2020 will be that the wrong approach plants the seed of trouble down the road.
2020 also showed many organizations the need for an ability to be able to nimbly adapt to the changing economic conditions facing their customers. Only digital can provide the kind of consistency and visibility to support smart and caring decisions around payment terms.
Such decisions become critical in building loyalty and even supporting the up-sell when challenging economic conditions improve. With COVID, businesses struggled that weren’t before and AR teams that were able to respond in ways that communicated in a more measured, circumspect and gentler way reduced the stress and likely built the long-term value of the relationship. This will pay dividends in 2021 and beyond, as will the accompanying digitization of payments that will help improve the speed of paid invoices and overall cashflow.
The net effect of this movement toward a more digitized AR will be a recognition within many businesses of the central role played by the function and its potential to support other functions, like sales, as a front-line rather than a back-office connection to the customer. A truly relational AR will also become a brand builder, especially important as organizations seek to find ways to stand out in an increasingly competitive landscape.
Karen Stephen is COO of SurePayd and has a background in the space where technology and community engagement meet.Click below to share this article