Cash & Liquidity Management

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Modernising Credit-to-Cash with Artificial Intelligence An overabundance of overdue accounts receivables in the portfolios of credit and collections professionals are inciting many companies to explore new opportunities facilitated by technological innovation.

Modernising Credit-to-Cash with Artificial Intelligence

Modernising Credit-to-Cash with Artificial Intelligence

By Keith Cowart, Senior Product Manager, FIS


More than two-thirds of credit and collections professionals report that overdue Accounts Receivable (A/R) averages are greater than 10% of their portfolio, according to the FIS 2019 Credit and Collections Market Report: Modernising Credit-to-Cash with Artificial Intelligence that surveyed more than 100 credit and collections professionals. Of the respondents 78% report that over the past 24 months, their days sales outstanding (DSO) has remained flat or increased. Doing business using the same processes and systems is not getting the results that companies are seeking.


The good news is that companies are exploring new technology opportunities such as specialised technology combined with artificial intelligence (AI) and process automation to overcome these challenges. Just over half, 58%, of companies have either already adopted it or are looking to implement some form of AI in the next 18 to 24 months (fig. 1). This article uncovers more of the challenges companies are facing and examines how they are modernising the credit-to-cash process with specialised solutions combined with AI and process automation.

 

 Fig 1:  how likely are you to implement ai in your credit-to-cash operations?  

Fig 1:  how likely are you to implement ai in your credit-to-cash operations?   


Top challenges holding credit and collections departments back

The increasing collection volumes is the number one challenge with which credit and collections departments are struggling to keep up. According to the report, 31% indicate collections volume has gone up with same or reduced staffing (fig. 2).

Every company is being forced to do more with less and many are also still using enterprise resource planning (ERP) systems or manual processes to manage their credit and collections. Rather than struggle to squeeze more out of their limited staffing and technological resources, companies are making the move towards modernisation. While the adoption has been slow, 27% of organisations now use specialised systems to automate their credit-to-cash operations (fig. 3). These specialised solutions create capacity within their teams and enable them to address the secondary and tertiary challenges that plague businesses.

 

Fig 2: Looking back over the past 24 months, which has been your top challenge?

Fig 2: Looking back over the past 24 months, which has been your top challenge?  

  

Fig 3:  What systems do you use to automate your credit-to-cash operations?  

 Fig 3:  What systems do you use to automate your credit-to-cash operations?


Another challenge facing credit and collections departments is the assimilation of new finance systems and/or acquisitions, according to 12% of respondents. Given that credit-and-collection functions have major cash flow implications for every organisation, the expectation to continue to improve the collection rates of outstanding A/R puts a major burden on businesses to look for solutions that provide strategic interoperability. This includes the ability to consolidate disparate ERP systems into a single view of risk and cash. Especially in a good economy, companies acquire other businesses that bring the complication of assimilating the legacy system and data into current processes and systems.

 

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