The Covid-19 pandemic has exposed all the pitfalls of manual accounts receivable (AR) processes, forcing businesses to introduce greater automation and adopt new technologies.
This is according to a new report from global payment technology firm BlueSnap, which asserts that legacy AR processes are impacting cash flow, human resources and talent acquisition, as well as wasting the time of senior executives.
Of all the negative consequences of an outdated approach to AR, BlueSnap singled out the inability to properly forecast cash flow as the most heinous (37 percent). Many organizations exceed their payment terms, resulting in monthly revenue being tied up in AR. The report argues that this is “such a major issue” that the majority of senior management believes the future of their business is in jeopardy due to poor cash flow.
In all businesses, at least some AR practices are still manual, including faxing and posting invoices, as well as accepting payments in cash and physical checks.
Besides being time-consuming, these processes are also error-prone, BlueSnap said. A single invoice can take up to 11 working hours to process, and could keep as many as 15 people busy.
Many of these pain points could be alleviated through automation, the report further states.
“While many of the businesses we surveyed consider themselves to be on their digital transformation journey, the B2B arena lags significantly behind the B2C market, where payments innovation is not only welcomed but expected, as consumers come to demand greater flexibility and more ways to pay,” said Nikhita Hyett, Europe MD at BlueSnap.
“It is only by automating these outdated systems and procedures that will enable firms to improve forecasting, reduce costs and reconcile payments more efficiently, as well as free up their teams to focus on higher level tasks that drive business growth.”