Consumerisation has changed the way we all do business; the longer buying cycles that businesses operate at often struggle to keep up with personal buying habits. In the past, that’s meant people bringing PDAs, smartphones and DropBox accounts from their homes in to work in order to improve their productivity. These employees are early adopters, and they often prove the business case for new technology in the workplace, and they force change. However, they don’t seem to be doing this in the finance department of half of typical UK businesses.
Perhaps it’s because few people operate their own accounts receivable department. We’re used to our employers paying on time. We’re used to monthly and quarterly bills from our credit card company, our water, electricity and gas providers – assuming we haven’t already set up a Direct Debit to pay these off as they come in.
Meanwhile, back at the office, our employers are still paying an army of people to chase late payers using letters, phone calls and schedules. It’s an incredibly labour-intensive job when done this way, and large companies routinely offshore it as part of their business process outsourcing strategy. Often, this move to cheap labour has a negative effect on customers- and it’s hardly rewarding work for the BPO employees, either.
In the US, the vast majority of companies automate their accounts receivable, and it frees up their finance staff to do far more productive things than chase invoices manually. The finance departments that do this often find they can concentrate on more strategic thinking – and deliver more advice back to the business – as a result. And automation also means that the dreaded ‘Dave in accounts has handed in his notice’ message doesn’t also translate into invoices, payments and cash falling between two stools during the handover process – assuming there is one.
One problem that we’ve yet to overcome here in the UK is the assumption that a good (possibly brand new) Enterprise Resource Planning (ERP) platform will do all of this. Put simply; it won’t. All too often, I talk to finance departments which take an invoice spat out by their company’s ERP and process it manually. Once it’s printed and mailed, the accounts team is on its own, with no technological backup to call upon.
Businesses in the States are far more ready to take on automation as a means to up their productivity – and we know that there’s a minimum of a 30% productivity gain for AR departments that take this step.There’s all kinds of reasons to automate: which one will you choose?