In the previous article in conversation with Ben Sepehri, Director, AR Finance, Taulia, the impact of inflation on AR, and the best next steps for businesses, were explored. In this follow-on piece, he picks up the thread with an examination of the increasingly useful role that technology – both cutting edge and everyday – has to play in bringing key AR metrics under control.
The best position from which to make any decisions around AR is having a full view and understanding of the receivables book. This may sound somewhat obvious, but many businesses are simply not in a position to immediately see the status of AR across their entire set of systems. They will not therefore be able to see the flows and trends within that process, and thus not be able to see trouble coming, nor be in a position to enhance those processes for longer-term benefit. “We see many companies struggling to draw insight from their data, let alone implement a financing and liquidity strategy in an efficient manner,” notes Sepehri.
A typical corporate set-up might see decentralised processes, multiple ERPs, and different billing and collections methodologies fragmented across various geographies. This lack of cohesion can, and often does, create unnecessary challenges for AR teams, which in turn leads to reporting issues.
Indeed, with AR teams trying to merge multiple reports in a central repository, it forces a time and cost penalty into the process. It also heightens risk where manual keying and rekeying of data is required. “Where legacy processes that are deeply embedded in business practices are still used, these can be very hard to unwind, presenting an unnecessary risk,” says Sepehri.