Receivables Digital Tech Accelerating
Keith Cowart | senior product manager, FIS
October 19, 2020
For credit and collections teams, there are many challenges in today’s uncertain environment – particularly when it comes to managing collections efficiently and tackling days sales outstanding (DSO). The new market report, Crisis as a Catalyst for Change, from FIS® surveyed 336 treasury, payments and receivables professionals. The results showed that improving DSO and past-due AR is the primary challenge facing 50 percent of the receivables respondents. Other primary concerns included management and prioritization of the collections process, accessing quality risk scoring and visibility of credit risk in portfolios.
Of course, difficulties in managing collections are nothing new. Last year, our Credit and Collections Market Report found that the top challenge was an increase in collections volumes with the same or reduced staffing, followed by an increase in DSO and past-due accounts receivable.
But while collections teams have long struggled to optimize the process, it’s also clear that the COVID-19 crisis has compounded the difficulties. In particular, the 2020 survey identifies collections management as the activity most significantly affected by the crisis – ahead of credit risk management, dispute management and cash application.
With COVID-19 negatively affecting many companies’ payment behavior, it is more important than ever to contact higher risk accounts as quickly and efficiently as possible. Digital solutions can help you achieve this by automating processes and mitigating risk.
While many organizations have previously concentrated on treasury when adopting digital improvement initiatives, they now recognize that investing in credit and collections can not only reduce costs and increase efficiency, but also optimize cash flow forecasting and working capital management.
As such, 59 percent of receivables respondents are planning to increase their investment in digital initiatives in the next year. The move to remote working is a particular catalyst for this, given that over half of receivables respondents are able to perform less than half of their functions remotely. By adopting SaaS or cloud systems, you can give credit and collections staff the tools they need to perform their activities from any location, while improving productivity, eliminating infrastructure costs and taking advantage of robust security and controls.
Furthermore, receivables teams are also turning their attention to advanced technologies, including process automation and artificial intelligence (AI)/machine learning, which are top priorities for 58 percent and 43 percent, respectively.
In particular, AI and machine learning can support credit and collections in a number of ways – for example, by prioritizing collections, reducing manual work and supporting more accurate cash forecasting. As such, these advanced technologies can help companies not only overcome perennial obstacles within collections, but also navigate the challenges brought by the current crisis.
See the full research findings for yourself and understand how digital and advanced tech can drive your receivables operation forward.