COVID-19 has swiftly impacted our world in more ways than we can imagine. It has quickly affected the world’s health sectors, all-sized businesses, and tourism, but furthermore, even basic business functions such as the collection and payments of account receivables for companies. Businesses are currently experiencing large delays in account receivable functions and are struggling to find plausible solutions to this issue. The hit to their balance sheets paired with manual, outdated receivables processes has resulted in corporations struggling with decreased earning and trapped liquidity.
Though in the past accounts receivables have largely been overlooked, the current situation has brought to light the importance and urgency it has to the smooth operations of any business. So, how can businesses preserve their relationship with clients while enforcing more efficient processes and saving their businesses in the long-run?
AR Strategies to Navigate The COVID-19:
Evaluate Risk Management Processes
If businesses do not already have impeccable risk management operations, this is a critical time to evaluate, create, and implement one which will help manage continuous changes.
- Credit Management — It’s vital to have a good credit management process in place, as more and more applications are coming in during these difficult times. A business should be empathetic to its customers and partners, however, strong measures should also be in place in order to ensure the business continues to function smoothly. To minimize risk factors for businesses, it’s important for owners to re-visit their tools for pre-screening clients, financial statements, credit reports, and reference checks.
- Collections Management — Putting smart tools in place will help a business improve collection efficiency and minimize risks associated with late payments in today’s turbulence. If companies do not have a unified collection workflow or centralized collection management system, now is the time to put one in place.
Digitalization and Automation of Collections Management
Digitalized and automated all-in-one receivables management platforms that handle all steps of the receivables management lifecycle can help businesses minimize costs, risks, mistakes and increase efficiency. Such platforms can handle a wide array of AR activities:
1. Invoice Management — An automated all-in-one platform can allow businesses to automate invoice management activities and free up time and efforts of the team for more strategic activities. Such platforms can handle all necessary invoicing activities such as:
- Invoice initiation which automatically creates invoices, pulling data from multiple sources.
- Invoice distribution through email, online portals, messages, or any other form of preferred communication channel of the business and its clients.
- Payment reminders in case of payment delays through preferred communication channels.
- Payment processing which enables payment transactions between customers and creditors from various channels.
- Pre-legal collection in case of late payments. This automates prejudicial collection processes based on dynamically scalable communication patterns.
- The initiation and execution of legal collection process for all claims with high chances of success
- Automated monitoring of currently non-processable claims (in case of bankruptcy, health issues, insufficient data etc.)
- Cross-border capabilities that can help businesses enter new markets efficiently and effectively.
2. Tech-driven Solutions — the innovation of technology has had a great effect on receivables technologies. All-in-one solutions platforms encompass the latest software and tech that is tried, tested and designed to fulfill every phase in the receivables management organism. Smart automation tools can:
- Utilize AI-based communication processes which can capture and translate information such as invoices and communication outreach
- Accurately match invoices to payments through data enrichment. By automatically comparing and adjusting all customer-related data points such as names, contact information and bank information, human-made errors are entirely eliminated.
- Provide a variety of digitalization levels with ease and efficiency. Receivables management platforms allow flexible and flawless data transfer through the Web, RESTful API, JSON, CSV., etc., and have integrated PSD.
The Benefits of Digitalization and Automation
The benefits of digitalization and automation through all-in-one receivables management platforms are tremendous. A business with an impeccable receivables management solution can handle all turbulence of today and the possible changes that tomorrow may bring.
- Processing of an incredibly high number of invoices, all while delivering better communication and process quality.
- Provide a high success collection rate on unpaid invoices through constant automated payment reminders and legal collection wherever applicable.
- Minimizes internal costs, time, and efforts related to new employees and human-made errors. Manual account receivable activities are time-consuming and repetitive which can result in a variety of errors. A simple misspelling of a name could mean a huge invoice payment delay and as a result a lower cash flow for the business. This issue is entirely eradicated through automation and digitalization.
- Tremendous cross-border capabilities through the multitude of covered territories and easy onboarding of new territories on demand. This is made easy thanks to multi-language communication and international transaction capabilities which promote easy integration and seamless penetrations within new markets.
- Establishing fluent processes by integrating all accounts receivable activities into one seamless platform that is automated, digitalized, and self-capable.
This added value also allows businesses to focus on more vital business processes with all the money, time, and effort they save. They can focus on stabilizing and prioritizing a variety of other internal processes such as targeting new clients and focus on new revenue inflows.
As COVID-19 continues to spread throughout the world and create more and more uncertainty for businesses, this is the perfect time to adopt these new strategies. The situation has impacted businesses and clients in unforeseeable ways. It’s vital for businesses to respond to this crisis in a strategic, well-thought-out way, rather than easy short-term tactics which will likely be ineffective in saving a business.
Finding the “new normal” may be a challenging task, yet one that is absolutely necessary in regards to the survival of any business.
All-in-one receivables management systems can offer end-to-end operations support for all necessary receivables activities. These platforms can help owners and employees put accounts receivables initiatives on autopilot and allow them to focus on what truly matters — growing businesses.
Make sure to visit the eCollect website for more information regarding account receivables innovations and solutions.