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AR automation: Boost cash flow and resilience in 2024

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Are you wondering whether 2024 will be the year when everything settles down again? It’s an optimistic thought given the confluence of events that have made succeeding in business in the 2020s such a challenging proposition.

From the extraordinary uncertainty engendered by the pandemic crisis to the inflationary conditions and interest rates rises that came hot on its heels, finance and business leaders have had their mettle well and truly tested; forced to deal with existential challenges and make critical decisions that have shaped the fate of their organisations.

Many are concerned that the upcoming months will bring more of the same – significant external challenges over which they have little control, and to which they have no choice but to respond.

For 78 per cent of leaders, a potential global financial crisis is the foremost worry, according to the results of the fifth annual BlackLine survey, which polled senior finance and business leaders in seven countries, including Australia, the US, France and Germany.

Other pressing concerns included cyber-security issues, the impact of climate change and the unstoppable march of disruptive technologies such as AI.

Preparing for whatever lies ahead

Worrying about risks on the horizon (or right around the corner!) is one thing. Being prepared to weather them is quite another. Many businesses are not positioned as well as they might be to counter high severity events and implement contingency plans to help them pivot and – ultimately – prosper.

So, how can they improve their resilience? Sharpening their focus on planning and analysis is a great place to start. Being able to dive deep into the data and extract meaningful insights enables leaders to identify emerging issues that require attention and action, sooner rather than later.

Always providing, that is, that the data they’re accessing is comprehensive, accurate and reflects the current status quo. For organisations that continue to run on legacy financial platforms, that’s rarely the case. 

Operating in manual mode as many finance and accounting departments here in Australia continue to do, means there’s a lag of weeks, and very often months, between what’s happening on the ground right here, right now, and what’s recorded in the books. 

The continuous accounting advantage

If they adopt continuous accounting, it’s a very different story. 

An approach to managing the accounting cycle which allows workloads to be distributed evenly across the accounting period, rather than concentrated at period-end, the continuous accounting concept centres around three principles: automating repetitive processes; eliminating end-of-month bottlenecks; and establishing a culture of continuous improvement.

As well as reducing finance overheads, it can provide companies that are prepared to retire their legacy methodologies and platforms with the accurate, up-to-the-minute data they need to inform their decision making in turbulent times. 

In uncertain times, cash flow is king

Having healthy cash flow and effective cash flow visibility can help them act on those decisions from a position of strength. Here, too, many businesses haven’t positioned themselves as strongly as they might.  

A tiny two per cent of organisations have complete confidence in their real-time cash flow visibility, according to Blackline’s research. The remainder are feeling its lack, with 48 per cent of survey respondents stating that poor visibility makes it harder to adapt to market fluctuations.

 Almost the same percentage expressed concerns about making decisions based on outdated or inaccurate cash flow information.

Embracing AR automation 

The good news is, it doesn’t have to be that way. 

Automating the accounts receivable function can provide businesses with up-to-the-minute visibility into the payment status of all their customers, as well as a picture of their payment patterns over time. This data can be used to improve the accuracy of the financial forecasts that are used to inform critical business decisions.

Automation can also boost cash flow by making the collection of payments simpler and faster. Local businesses that have made the switch have slashed manual processing activity, cut payment times and reduced their accounts receivable overhead.

Ready for anything

When trouble strikes, readiness and resilience can mean the difference between sinking and swimming. Having access to comprehensive, accurate financial information can enable business leaders to respond more decisively and effectively to disruptive events. Finance automation can deliver it, reliably and cost effectively. If you want your organisation to be able to face the future with confidence, it’s foundation technology you can’t afford to be without.

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