As finance teams enter the third quarter of an unpredictable year, the balance between preserving longevity and meeting growth goals has been a challenge. With thoughts about the impacts of technology blending with a continued desire for work-life balance on the minds of many finance teams, the desire to succeed at an organizational level, and the necessary workloads in the second half, companies will require motivated employees who are empowered with the proper tools.
Despite a well-defined mindset geared for success, most CFOs are still playing catchup. In an environment where talk is all about the future of things like the economy, technology, labor, and work environments, over three quarters (77%) of the 300 CFOs VersaPay interviewed in their annual State of Digitization in B2B Finance report said their teams are not up to date on their account receivable (AR).
Identifying the Issue
Accountants are more likely to join and stay with a company that offers better technology to their finance teams. So, allocations towards these types of solutions may benefit teams drowning in AR processing tasks. If CFOs and their teams meet sales growth goals, transactions will presumably increase; therefore, finance teams that can’t deal with their AR demands now will be outpaced and overwhelmed by the company’s growth.
Although VersaPay data doesn’t compare the number of transactions with the number of people on each finance team per se, the research showed that 41% of finance teams processed between 300 and 2,500 invoices per month. About 39% of CFOs said their finance teams deal with more than 2,500 invoices per month. In the entire dataset, the average amount of invoices processed per month was just under 5,300.
Outside of the accounting setbacks delays in AR processing cause, the limits it puts on a CFO’s greatest tool, working capital, can tremendously inhibit growth efforts.
But many finance teams have identified the first step toward a solution. According to the Versapay findings, nearly all (96%) of CFOs said their AR team would be more productive if they could work more collaboratively with the organization’s accounts payable and internal teams.
Communication Problems
Workflows and the communication channels within them may be at the root of AR teams failing to keep up. On average, over a quarter (27%) of CFOs credited communication problems as the cause of payment processing or collection problems. Nearly a fifth of CFOs say this is an issue for over half of all their payment issues.
Apart from their catch-up duties and other tasks, many AR teams spend significant time dealing with disputes. About a quarter (27%) of CFOs told Versapay their AR teams spend over half or more of their workdays dealing with invoice disputes. Another 27% also said their AR teams spend between a quarter and a half of their days dealing with these disputes.
Improvements in communications may remedy delays in these processes. With the similar approaches CFOs have taken to improve their internal communications, that same effort should be directed toward communication with customers.
Whether through productive and constant communication between customers or sales representatives or technology that harvests all customer information needed for a proper invoicing process, data suggests finance teams who limit the back-and-forth of information requests with customers may be be better at getting invoices paid faster. Ninety-one percent of CFOs say their teams occasionally, often, or always need to request additional information from customers when receiving billing escalations.
CFOs Want More Out of Technology
As many finance leaders have already pledged to spend more on fintech products to improve workflows, data shows that most are underwhelmed by their current tech stack’s ability to process invoices. Nearly three-quarters (74%) of CFOs told VersaPay their system could either do more or use a major upgrade. Just under a quarter (24%) of finance leaders said the technology around invoice processing did everything they wanted it to do.
According to the data, the underwhelming sentiment around technology isn’t from a functional perspective, but a consistent inability to address common issues. According to Versapay, 19% of CFOs said their finance teams run into daily issues that are outside the abilities of their current processing systems. About 80% of CFOs reported their teams faced these issues multiple times a month, with over half (53%) indicating these issues come about multiple times a week.