Jared King, co-founder and CEO of cloud-based accounts receivable platform Invoiced, urges CFOs to rethink their accounts receivable function, saying a digital revamp could save companies millions of dollars.
King wrote an article in Forbes detailing the ways CFOs can maintain a handle on accounts receivable despite the ever-shifting landscape. He listed “five ways CFOs are rethinking accounts receivable,” and acknowledged “managing the overall financial health of the business, financial reporting and supervising the finance and accounting organization” is more difficult than ever.
King maintains relying on automation and outsourcing can ease the many financial and accounting burdens weighing down finance teams and executives.
King said that in selling Invoiced, he’s met with CFOs managing their accounts receivable in new ways. Which is to say: they’re looking for smarter, quicker and more reliable means to ends.
King recommends CFOs adhere to the following tenets: customer experience as everyone’s responsibility (accounts receivable is when they actually hand over their money, so you want to be sure that it’s seamless); Integration as the key to transformation; don’t wait for information and answers; online billing and collections are becoming imperatives; accounts receivable should be highly accountable.
The basis of King’s recommendations are familiar; CFOs are busier than ever, as their range of duties has expanded considerably in recent years. When it comes to accounts receivable, with which all companies grapple, it’s crucial to be ahead of the curve.
“Paying customers are asking for frictionless experience,” King said in an interview with CFO Dive on Tuesday. “It may seem odd for CFOs to be thinking about customer experience, but it really does impact everything.”
King says he’s been seeing “a lot of demand for banning manual and paper processes,” but this doesn’t mean every task should be automated. Digitizing can be as simple as sending an email invoice, or taking credit card payments, he said.
But CFOs must retain the customer relationship and know it comprehensively. “[The customer relationship] has to be respected, and sometimes automation isn’t appropriate,” he told CFO Dive.
But in King’s experience, CFOs are becoming more comfortable with cloud and web-based software, which reflects the plasticity of the role, as well as the consumer demand for online business. Integrating new and old systems that work in tandem across the company is integral, he said.
“Without proper integration, you end up shuttling data in really inefficient ways between departments and systems.” he said. “It can work for some time, but it’s duct-taped together. Things get lost in the cracks and it results in a worse customer and payer experience.”
“Business and pricing models are getting more complex, and keeping up with that complexity can be difficult,” he said. “When companies become more complex in how they price their services, that makes the AR function more challenging, for instance.”
King’s bottom line? CFOs must get comfortable with automation and understand what possibilities it entails. Additionally, CFOs need not worry about the cost of implementing the software, because leveraging it correctly can “virtually grow your headcount,” meaning a team of 15 or 20 can perform like 25 or 30, he said.