The Covid-19 pandemic has inadvertently brought about several years’ worth of digital change in a much shorter time frame, with the share of digitally enabled products in business portfolios accelerating by as much as seven years. It’s no surprise that this trend has been fast-tracked with businesses needing to streamline operations and communicate with clients via new channels as economic pressures continue, and this requirement has also extended to the order-to-cash process.
While effective cash management has always been a crucial element of business survival, the financial landscape transformed in 2020, with payment delays measured by DSO increasing to an average of 68 this year, its highest level in a decade. Maintaining reliable and efficient cash collection is therefore crucial as time and resources are increasingly spent on manually chasing debts and deciphering the best solution for customers with cashflow issues.
Technology solutions available today allow businesses to proactively manage their risks, accelerate their collections processes and manage debtors and disputes. But transforming the order-to-cash process in isolation is not enough. It’s now time for the entire order-to-cash workflow to be brought under the umbrella of the wider digital transformation strategy of the business, and the way to do it is via the cloud.
Cash processes via the cloud
The cloud may be a long-established business buzzword that has covered a wide range of applications over the years, but that doesn’t mean that its use cases can’t also extend to the order-to-cash process. The Annual Fintech Barometer survey by Visma | Onguard discovered that uptake of cloud-based infrastructure by organisations in the UK sat at 43%, with a further 49% planning to do so in either 2021 or in the coming years, representing huge potential for its future adoption.
As with many new platforms that businesses wish to integrate into their operations, ensuring a cloud-based implementation removes the need for potentially costly in-house maintenance and expertise to prevent downtime. Lower upfront costs of a cloud deployment also enables businesses to save money from the outset and is likely to win favour with business leaders. With internal IT teams already stretched due to the need to work on projects such as improving security measures, a cloud-based deployment will help to ease the strain on IT teams that are already feeling the pressure.
Many organisations may have the misconception that keeping data in-house allows for greater control and autonomy to facilitate efficiency in financial processes, but in the cloud, the ERP architecture is already maintained. Data can be integrated quickly and easily across systems, enabling synergy between processes.
This benefit also helps with the breaking down of silos, where disconnected and manual processes have caused finance professionals to complete tasks in an isolated manner. This ability is crucial when considering that alignment, as integration of systems was identified as the biggest challenge in the order-to-cash process in the Annual Fintech Barometer survey by Visma | Onguard (33%).
Cloud as a component of business transformation
Utilising cloud-based platforms not only allows for greater opportunities for in-house efficiencies in terms of teams and processes, but can also enable additional state-of-the-art technologies to be effectively integrated into the order-to-cash process such as robotics, artificial intelligence (AI) and machine learning (ML), enabling business transformation on a much wider scale.
Effective use of robotics allows manual and tedious tasks to be eliminated, enabling finance professionals to focus on more higher value work. However, implementing this technology in-house can prove to be costly venture. The bots needed to ensure that tasks are automated efficiently require continuous development and maintenance if implemented in-house. Similar issues arise when it comes to AI and ML. Although the capabilities of AI are vast, such as being able to determine the likelihood of whether a customer will pay an outstanding invoice, the need to hire data scientists and the outlay involved in a data platform investment can place strain on budgets at a time where every penny counts.
The good news for finance teams is that the cloud is facilitating the availability of AI and ML-driven plug-and-play applications. These off-the-shelf solutions mean that organisations can apply these technologies quickly and easily, immediately transforming the order-to-cash process and having an immediate impact on the finance department.
Transforming CX with cloud processes
More businesses are now turning to automated order-to-cash platforms, and those that commit to cloud-based versions are additionally benefitting from seamless deployment, simpler process management and the breaking down of silos, both in terms of data and people. Alongside these internal benefits comes the ability for finance professionals to provide a more streamlined customer experience.
With Visma | Onguard’s study revealing that finance professionals identified the most fun part of their work as creating the best solution for clients (29%), cloud-based platforms not only help professionals maximise the enjoyment of their role, but provide them with the toolkit to understand their clients’ needs and requirements and provide a better service. Integrated cloud-based platforms will ultimately help to drive transformation as businesses move towards digitisation.
This was also published by Finance Digest and Finance Derivative.