Accounts receivable teams are understandably stretched thin right now. If they’re not impacted by supply chain issues, the ongoing digitization of core functions across the business and rapid inflation, they could be left in analog limbo.
I could sit here and tell you that your team can just slog through that. I could assure you that a stellar work ethic and a can-do attitude will be a difference maker. The truth is that you can’t just throw people at chasing payments down, reconciling those payments and dealing with managing a dizzying number of portals and logins. If you have to do that, there’s just no time to get anything else done.
That’s a bit of an open secret in accounts receivable departments I speak with. Portal fatigue is a real thing, and the level of manual effort associated with just the basics has become overwhelming. So how do you solve that?
The first and most critical step is to take as much manual, labor-intensive work out of your processes as possible. That means not having to manually take in and reconcile payments, especially across a wide number of portals. The quickest way to do that is to use tools to simplify receipt and reconciliation, which starts with A) moving away from checks entirely and B) finding a way to get detailed remittance without the headaches that sometimes come with it.
That requires creating opportunities for automation that otherwise would be difficult for companies to achieve on their own. For example, many of our suppliers choose to enable Corporate Trade Exchange (CTX) remittance in order to make reconciliation easier, as it is passed to your bank with ACH instructions and removes the need for any manual data entry. If you need a cash posting file for your specific ERP, that’s also a potential offering and a way to get around having to manually intake and deal with payments. The functionality and benefits are similar to CTX, but with the added advantage of flowing directly into your ERP.
In addition to automating, you’ll want to make it easier for you and your team to see payments and understand your cash picture at-a-glance. Again, you don’t want to have to sort through a ledger or log in to a portal multiple times a day to get that kind of visibility.
Ideally, that information would come to you, via emailed reports. With scheduled reports sent from the solution when you receive payments, you obviate the need to log in, shaving precious minutes (and maybe a password reset) off your day. Because you’re already working out of your email, and because rich remittance detail is provided in every email a day prior to funds hitting the bank account, you’ll have everything you need at your fingertips.
However, setting up CTX or an ERP cash posting file, gaining access to scheduled reports and other cash allocation tools isn’t something that’s easily done in-house, and the hours and money you spend on doing so could be better spent on pressing business priorities.
When you’re looking for that partner—or if a payer is requesting you use one so they can pay you via virtual card or ACH—you'll want to keep it simple and ask them what they can bring to the table in terms of automation and visibility. There are bells and whistles and buzzwords providers can offer you, but if they’re not taking work off your plate and making it easier to both process payments and get information on them without logging into a separate portal, it’s probably not going to make a difference for your business.
With the hours you free up by adopting technology you’ll be able to stop chasing payments down and start thinking big picture success for accounts receivable. As the title of this article says, it’s time for your AR function to have more time to tackle what matters.
Evan Hall is the Director of Vendor Enrollment Success and Strategy for Paymode-X, where he has spent the past six years. In this role, Evan regularly talks to suppliers about their accounts receivable pain points and strategies.