AUTOMATING ACCOUNTS RECEIVABLE (11/7/18)

Transcription

1 AUTOMATING ACCOUNTS RECEIVABLE (11/7/18)

2 Jon Seaman Senior Account Executive/AR Partner Manager

3

4 Jon Seaman

5 AGENDA Introductions & Goals Who is Esker/TermSync? NACM Member Customers and Benefits they are seeing 5 Reasons Companies & Their Customers Love AR Automation Tools/Techniques to take advantage of Automation Q & A Next Steps

6 GOALS Educate you on what Accounts Receivable Automation is and how it can help you Q & A at the end and always welcome to stop by my booth if you have additional questions or would like to discuss

7 ESKER ONE SOLUTION, ANY BUSINESS PROCESS

8 AR AUTOMATION FUNCTIONALITY

9 ESKER NACM CUSTOMERS

10 CUSTOMERS SUCCESS STORY

11 CRESCENT PARTS & EQUIPMENT Challenges prior to developing strategic AR: Time wasted fielding invoicerelated customer inquiries No central location to store and access notes Lack of time and resources One person managing 3,000 customer accounts

12 CRESCENT PARTS & EQUIPMENT Using Esker, it was amazing how fast past-due balances, skipped invoices and disputed invoices started getting cleaned up just by sending automated reminders. In fact, one chronically poor payer actually turned into one of our best four-star customers. Staci Cima CCE Credit Manager Customer notes are tracked in the solution More free time for key accounts and new customers to receive more attention Reduced overdue balances by nearly 30% Increased visibility

13 LUBE TECH Challenges prior to developing strategic AR: Fielding too many invoice-related customer inquiries Frustrated with increasing DSO Increased invoice volume and customer base (stagnant AR resources to handle accounts) No visibility into collector activity

14 LUBE TECH Reduced DSO by seven days over 12 months Cut percentage of past-due accounts in half Nearly eliminated accounts 90+ days past due over 12 months Eliminated 90% of invoice requests with self-service option

15 BENEFITS OF AUTOMATION 29% is the average reduction for a client of ours after only 6 months of use 30% is the percentage of AR time spent prioritizing and preparing for collection calls when using only an accounting system. Only 5% of AR time is spent performing those same tasks with TermSync 72% is the percentage of people that prefer an online self-service option for invoice questions compared to or phone support 2.2 is the average AR rep can manage 2.2 times as many active customer accounts when using AR automation Only 33% of AR departments use software to help manage workflow and measure performance Compare that to nearly 83% of sales teams that leverage CRM software on a daily basis

16 BENEFITS OF AUTOMATION 52% indicated that a majority of their invoices are sent via postal mail 24% of companies do not send any account statements or payment reminders at all Only 16% of respondents have an automated process which sends out the majority of their payment reminders Customer adoption rates are 8 times higher for companies using TermSync compared to traditional customer payment portals 30% of credit departments are understaffed (according to data from Credit Today s Staff Benchmarking Survey)

17 EXCUSES/MYTHS ABOUT AUTOMATION

18 AUTOMATION OVERVIEW STATE OF ACCOUNTS RECEIVABLE Levels of Automation High: Significant use of automated workflow, near paperless collections follow up, ACH & Credit Card payments, automated invoice reminders & delivery. Medium: Some use of technologies listed in the high category, but still very reliant a manual processing operation. Low: Mostly manual, paper-based processing operation with limited automation technologies.

19 #1: Sending Snail-Mail Invoices

20 PAPER INVOICE PROCESSING By the numbers 50% AR department still deliver their invoices via postal mail 1-96% Loss of processing efficiency with manual input $12 Paper invoice cost 2 Source: 1 The Institute of Financial Operations study (2013) 2 Billentis Report (2016)

21 INVOICE PRESENTMENT & DELIVERY I NEVER RECEIVED THE INVOICE.

22 EINVOICE PRESENTMENT & PAYMENT Factors Driving Focus on einvoicing Lack of data integrity 7 Improve ability to budget/forecast 14 Increase payment options 21 Strengthen customer relationships 21 Better cash management 29 Remove paper 43 Better efficiency/productivity 57 Speed up payment cycles (DSO) 57 Reduce overall processing costs Factors Driving Focus on einvoicing Source: PayStream (2017)

23 EFFECTS OF MANUAL BILLING & COLLECTIONS Higher operational costs Lower productivity Increased Days Sales Outstanding Greater risk for regulatory non-compliance Lengthened dispute resolution Limited control over post-sale collections interactions No visibility for data tracking or reporting Decreased customer satisfaction rates

24 #2: Sending One-Off Payment Reminder s

25 PAYMENT REMINDERS 45% Don t follow up with customers until they are at least 20 days past due 2016 Billing & Collections Guide

26 #3: Prioritizing Collection Calls Manually

27 PRIORITIZING COLLECTION CALLS MANUALLY

28 ANALYTICS & DELINQUENT ACCOUNTS According to a survey by the Commercial Collection Agency Association (CCAA), after three months the probability of fully collecting on a delinquent B2B account drops dramatically with the length of delinquency. At 90 days past due, likelihood of full collection drops to 73% 6 months past due, drops to 50% 1 year, it s down to 25% 2 years, it s a meager 10.5%

29 #4: Fielding Every Customer Inquiry in Person

30 #5: Compiling Data to Generate and Send Reports

31 COMPILING DATA TO GENERATE AND SEND REPORTS

32 CONFRONTING OUTDATED PROCESSES Tools/Techniques to take advantage of Automation

33 EMBRACE TECHNOLOGY Too many AR departments view technology as a threat to their existing staff Another person added to your team who could help you: Get paid faster Reduce processing costs Improve customer relationships Employee would improve the productivity of all your staff members and doesn t need a sick day No need to replace your current staff, you can automate parts that should be automated, allowing team to optimize their time or get to other more value-added and business-critical tasks

34 GO BEYOND DSO Keep your staff accountable Have the ability to measure or monitor how well your staff is doing Sales metrics go beyond sales (83% of sales teams use CRM solution to better manage their workflow) Enables you to: Track performance Hold your team accountable Get the results you want

35 PUSH FOR E-INVOICING Savings of 60-80% compared to traditional paper-based processes Virtually everyone nowadays has capability and internet access Strategies include: Setting defined goals (e.g., increasing e-invoice delivery via by 20% over four months) Collecting accounts payable (AP) addresses from all new customers Reaching out to existing customers in order to convert them from paper to (make e- invoicing an expectation, not a request

36 CONFIRM INVOICE RECEIPTS One of the most common reasons customers give for not paying is claiming I never received the invoice With an e-invoicing tool, it would allow you to track invoices from start to finish You can also set up workflow rules, such as teaching your system that any unopened invoice (based on when it was sent, dollar amount, customer group, etc.) should show up in a list to your team They can then reach out to the customer to ensure they received it, eliminating the issue of lost invoices This capability accelerates collection times while also helping your team identify potential problems early before they snowball into larger issues

37 FOLLOW UP EARLY & OFTEN Limited time and staff make it tough to follow up when they would want to, which is often Most companies would love to contact their customers before days past the due date, but can t Automation tools allow you to easily achieve on-time payments via automatic friendly payment reminder s so that no human involvement is necessary Payment reminders can be customized to match your company s unique brand and message, giving it a more familiar, personable touch for your customers The tone of the s can also be escalated as you see fit

38 OPTIMIZE TEAM EFFICIENCY As much as on-third of an AR representative s time can be spent prioritizing who to call and searching for contact and account information Automated AR management solutions can drastically increase productivity by prompting staff members with to-do lists based on customized ruled (ex s: risk levels, account balance, aging, etc.) As a manager, you will now your staff is calling who they re supposed to be calling, and can assign tasks to other team members and departments as needed

39 OFFER SELF-SERVICE TOOLS Approximately 72% of people prefer self-service over phone or support. Failure to meet these expectations means fewer satisfied customers Customers would rather make an invoice payment or get a question answered online and on their own time For companies, it comes down to a simple question: Are you easy to do business with? Those who are have self-service tools in place for customers to: View invoice information online Make payments electronically Apply credits to open invoices Sign up for auto-pay functionality Get questions answered rapidly

40 TRACK LATE PAYMENT REASONS Late payments. Customer disputes and deductions are all things AR departments would like to avoid Using automated AR management tools, your team can identify, track and categorize root causes for latepaying customers, deductions management and other areas Over time this data can allows you to know what customer pattern are while improving processes and fixing any problem areas originating from your department

41 CONTACT INFORMATION AND Q&A Jon Seaman Esker AR Partner Manager/Senior Account Executive