Technology Record - Issue 23: Winter 21/22

126 www. t e c h n o l o g y r e c o r d . c om V I EWPO I NT Digitising accounts receivable processes C RA I G O ’ NE I L L : V E R S APAY Implementing technologies to digitise accounts receivable operations is an important strategic priority for manufacturers wanting to build resilience to withstand future disruption During 2020, manufacturing companies struggled to maintain steady cash flows. Due to the pandemic, many faced forced shutdowns, reduced workforces, and supply chain limitations. But in 2021 and onwards, the global manufacturing community is using these hardships to inspire innovation. Historically, manufacturing companies have been keen to introduce technology and automation on the production floor. Yet, the finance and accounting sides of the business have seldom seen these kinds of improvements. In these industries, accounts receivable (AR) processes are by and large reliant on highly manual work involving reams of paper and antiquated systems. But at a time when effective cash management is paramount, these same dated processes no longer work. In an industry where profit margins are already tight, dealing with frequently late or delinquent payments can be especially damaging, even crippling, for some businesses. This is why more manufacturers are now setting their sights on adding technologies to the back office and prioritising investment in critical cash flow contributors like AR. Our research found that among industrial and manufacturing firms with at least $25 million in revenue, 96 per cent of them are currently digitising their accounting functions. Chief among their priorities for digitisation within AR are invoice management, tracking payments received and due, collections management, and payment processing. Overdue receivables have cascading impacts for manufacturers; often shipments can’t be released until payment has been received, customers can’t be sold more goods until their credit has been replenished, and cash flow issues can mean having to incur debt to ensure enough supplies are present to fulfil outstanding orders. By introducing automation into their invoicing, collections, payment processing and cash application practices, manufacturers can collect receivables faster, maintain positive cash flow, and avoid these harmful ripple effects. One of the greatest challenges manufacturers dealt with as a result of the pandemic was uncertainty. Having learned from the events of the past two years, one area where manufacturers are investing with the hope of building a more resilient future is improving visibility into accounting operations. Through more unified and accurate tracking of the status of receivables, manufacturers can identify trends in customer payments and make smarter decisions on how best to manage their cash. An important way for manufacturers to achieve this is by partnering with an AR automation solution that integrates seamlessly with their Microsoft Dynamics enterprise resource “More manufacturers are now setting their sights on adding technologies to the back office”