The digital transformation movement is modernizing — and automating — business operating systems in every industry and throughout every department. The benefits in increased efficiency more than offset the costs of implementation, particularly for accounts receivable (A/R) tasks. But according to one new study, most commercial credit professionals have an inaccurate perception of just how modern their A/R systems are, and understanding the difference between the perception of technical functionality and the reality of your company’s capability makes all the difference to A/R success.
The perception of “modern” business practices depends on digital capacity and the comfort level of the leaders who govern business policies and procedures. Most A/R teams believe they are highly modernized and efficient, and when asked, 86% of polled leaders believe their department is at least somewhat modern. Whether it’s a gap in knowledge or a disproportionate attachment to the way things have always been done, the perception of modern A/R capability often differs drastically from the reality of digital functionality.
In truth, most AR teams are mistaken in their beliefs — or claims — of modern efficiency. Many still rely on paper invoices and checks. Those which have implemented some degree of digital transformation often do so haphazardly. The majority still lack self-service payment and account management capabilities. They have no real-time or automated integration with enterprise resource planning (ERP) systems or customer accounts payable (A/P) procure-to-play platforms. Uneven digital implementations are frustrating and/or time-consuming to operate, so while team leaders may believe their A/R functionality to be modern and efficient, their employees — and customers — tend to disagree.
What does true modernization — aka, digital transformation — look like? And how does it benefit your commercial credit customers, employees, and overall business?
Effective digital transformation is a process that requires research, systems integration, employee training, conscientious implementation, and a focus on customer experience. Resist the urge to grab the new, shiny, “next big thing” without full regard for its functionality and how well it integrates with existing systems. Begin your A/R digital transformation by carefully evaluating department needs, identifying areas of potential improvement, and conducting thorough research. Know new technology inside and out before investing company time and money adopting an incomplete or unsuitable solution.
Even with every useful digital tool at your A/R team’s disposal — and nothing extraneous — the most efficient digital solutions rely on integration with other systems. A loose collection of disparate parts is clunky and impractical — and does little to ensure seamless business operations. An integrated system is just the opposite, incorporating automation and real-time data sharing to keep everything, and everyone, on the same page. Before investing in modern A/R technology, be sure of its ability to integrate with the business systems already in place.
A/R upgrades should prioritize the commercial credit customer experience. Self-service capability is the number one tool for maximizing customer convenience, and making it easier for your customers to pay keeps company revenue flowing. Hands off, digital customer service is more efficient and increasingly popular in this era of rapid innovation. Build digital payment processing capability into your A/R department, and make things more efficient and convenient for your employees — and your customers.
Whatever the perception, the reality of A/R modernization is an efficient, digital solution which combines the functionality your business needs with seamless systems integration and an optimized customer experience.