As originally published in the Credit Research Foundation’s publication, Perspective by CRF (Q4 2020). (link)

Sustaining the productivity of the OTC organization and processes without proper tools and enabling technologies can be an enormous challenge for any finance function. Given today’s environment, as many companies have migrated to nearly 100% remote working environments, it is even more imperative that Finance seeks to maintain and support these operational processes with proper tools to maintain visibility and overall performance effectiveness and efficiency. Core challenges facing OTC organizations today with remote working teams are:

• Lack of visibility of team and individual performance productivity.
• Maintaining job accountability and completing meaningful performance reviews.
• Ability to easily collaborate in real-time with peers, cross functional teams and customers.
• Limited and disparate reporting and analytics leading to reactive decision-making.
• Delayed response times to key OTC activities (I.e., credit approvals, order holds and releases, collection contacts and follow-ups, invoice dispute resolution, payment processing and cash application activities, etc.).

Many source billing systems, ERPs, and even niche or Excel spreadsheets can provide a vehicle to enable receivables resources to manage daily activities. However, these disparate and siloed tools tend to fall short of providing an integrated approach for overcoming the many challenges facing OTC organizations.

Addressing these challenges requires new approaches with supporting technologies and applications that allow organizations to not only maintain current performance levels but to thrive regardless of the operating model – and certainly in a remote working environment. In fact, many organizations are making the decision to permanently shift much of their back-office OTC functions permanently to a remote work operating model. As organizations realize their teams can be trusted to work outside of the traditional four walls of onsite office environments, the growing demand for supporting technologies is coming to the forefront of this new operating model. Cloud-based, real-time technology solutions are bridging the gap by effectively maintaining customer communications, completing daily accounts receivable tasks, and providing the proper visibility into the overall performance of the OTC function.

Enabling technologies that have emerged and continue to take a foothold in the OTC space address the core challenges facing organizations today:

• Team and individual portfolio views with real-time management visibility and tracking of daily activities and task completion.
• Leveraging task and AR performance analytics of the team member to provide tangible indicators for employee performance reviews.
• Real time rules-based workflow capabilities to communicate across functions and with customers.
• Highly configurable and flexible interactive analytics allowing management and team members to take proactive customer actions and execute necessary corrective actions without hesitation.
• Expedited task and activity processing with supporting AI (artificial intelligence) and machine learning to expedite effective core OTC activity completion such as credit review and approval, collection contacting, invoice dispute resolution, and cash application.
• Integrated telephone technology thereby eliminating complex call center and dialer setup requirements.

Deploying such technologies and tools of course is not always easy and must address an element of data complexity and compatibility with existing ERP and accounting systems. The market today is seeing a move to address these challenges with the advent of cloud, web-based AI-driven applications, with a high degree of automation that can be easily deployed and maintained, while also providing the highest levels of security and ability to manage high volumes of transactions. A key component to any deployed solution is for that application to provide robust performance to the user community (i.e., high speed for executing transactions and activities, minimal to no downtime, quick response times when running analytics, etc., that drive higher productivity).

Organizations seek to address these remote working technology requirements with leading-edge, cloud-based tools and applications that provide AI automation to drive AR ledger and customer actions, streamline workflows for cross-functional collaboration to resolve issues and expedite approvals, interactive actionable analytics, and cash management features such as cash forecasting and target setting, and managing team members against meaningful working capital objectives.

Leading solutions available today offer a suite of integrated OTC solutions, with next-generation AI automation, machine learning (ML), and Natural Language Processing (NLP) technology to tackle the challenges and pain points facing organizations today – and particularly with the remote working operating model.

With cloud-based SaaS order-to-cash solution applications driven by AI Automation, Machine Learning (ML), and Natural Language Processing (NLP) technology, F&A Teams can perform their jobs regardless of location by harnessing the digital tools made available with the right enabling technology. Finance teams can support cash flow improvement, drive productivity, maintain accountability, and provide the necessary cross-functional collaboration. Remote-working environments require robust solutions, real-time workflow and visibility, streamlined communication capabilities (both internally and externally) and the ability for customers to self-service via web portals.

Leading Technologies Offer these Critical Features

• Credit Management – Online credit applications for new customers that integrate into the SaaS solution to drive the timely approval of customer credit ratings and credit limits. Automated rules-based credit scoring and evaluation for existing customers, limiting manual credit reviews to higher risk, higher value cases
• Receivables and Collection Management – Risk and value-based collection strategies, using AI to drive a high degree of automation of daily activities, NLP to determine and execute required customer actions with minimal steps
• Dispute and Deductions Management – Enhanced dispute management and escalation workflows to drive resolution of customer invoice disputes and payment deductions
• Cash Forecasting – Cash forecasting capability that cascades DSO and cash targets from portfolio level down to individual team member level with daily tracking against a monthly target
• Cash Application – AI and ML technology to drive high payment match rates, automate deduction resolution action, and expedite exception processing
• Electronic Invoice Presentment and Payment (EIPP) and Customer Portal – Highly scalable full-featured customer portal for invoice receipt, dispute identification, and payment processing
• Reporting and Analytics – Best is class supporting actionable metrics and KPIs to measure the overall OTC process, working capital performance, drive effective decision making, and to further drive team and individual performance and accountability.

The Benefits of End-to-End Integrated Receivable Applications
Having the right tools and technologies solves many problems and provides many benefits, especially given the unique circumstances of today’s working environment. Here are some of the more critical benefits that companies can and should expect from leading technology solutions:

• • Seamless interaction with customers and cross-functional team members
  • Enhanced and consistent productivity across team members with visibility to management
  • Clear and meaningful accountability for team members and management
  • Real-time visibility to customer details, notes, payment promises, etc., across team members
  • Real-time visibility and monitoring of AR and DSO performance at the executive and operational levels to drive working capital levels
  • Reduced cycle times for addressing customer invoice disputes providing an enhanced customer experience while supporting working capital objectives
  • Reduced reliance on internal resources through the provision of self-service options to customers

Leading technologies seek to solve the growing challenges in this new world of remote working teams across the OTC spectrum by providing tools that are easy to deploy and simple to learn, thereby elevating the performance of all team members while providing superior levels of customer service to internal and external customers.

Assessing Existing Landscapes and Making a Call to Action
With the evolution of next-generation technologies, particularly in the areas of AI, machine learning and Natural Language Processing, now is the time for organizations to evaluate their existing OTC IT landscapes. Whether a company does not have a solution or is maintaining a legacy solution that has been in place for a very long time, the time is now to conduct an evaluation of the options available in the market today. Newer age technologies tend to offer expanded functionality and features, often at a much better price point and almost certainly provides improved working capital performance and overall increased effectiveness and efficiency for the OTC function.