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The next big thing in B2B credit and collections software

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The next big thing CFOs need to pay attention to has actually been the next big thing for a few years already. Credit and collections software that’s powered by machine learning (ML) and artificial intelligence (AI) is the digital innovation that progressive organizations currently use to stay ahead of the game.

Over four years ago, a  McKinsey report warned CFOs who weren’t on board with adopting AI-driven digital tools that they were at risk of lagging behind their counterparts in other operational functions like marketing and IT. Then the pandemic hit and reinforced the need for finance teams to prioritize going digital. McKinsey estimated that the world-wide health event accelerated digitization by about seven years and further widened the gap between forward-thinking businesses and less progessive ones.

The push for implementing digital tools isn’t simply about getting in step with the times. Boston Consulting Group reports that organizations who adopted digital tools early on have almost twice the revenue growth of those who didn’t. 

How can one tech tool make such a significant impact? For starters, accounts receivables automation software helps finance and accounting teams by reducing the amount of time they have to spend on spreadsheets and manual tasks.The technology takes care of crunching the numbers at levels that aren’t humanly possible. 

Add in the accurate real-time predictions and actionable insights based on behavioral trends that ML and AI provide and the result is a team with better data and more time to focus on strategy. They’ll also be able to tap into their critical thinking, problem solving and communication skills–something that most of these professionals welcome.

In this article, we’ll discuss the four reasons why CFOs should lean into credit and collections software, especially those solutions that leverage AI, for planning, budgeting and forecasting. The benefits of this popular digital tool are truly transformational, improving accuracy, speed and reliability of AR processes. Specifically, teams that adopt AI-powered software quickly see results from:

  1. Real-time insights for improved cash forecasting
  2. The elimination of human error and data bias
  3. More time that allow finance teams to focus on more value-added initiatives
  4. Streamlined operations for scaling with ease

Four Transformational Benefits of AI-driven Credit and Collections Software

There’s no denying that the volume of data that finance and accounting teams have to deal with is steadily growing while their reporting deadlines seem to be ever shrinking. In other words, they have more to do in less time. That’s where ML and AI make a huge difference.

1. AI provides accurate real-time predictions and actionable insights

In today’s economic climate, where things are changing quicker than ever before, management may want to see financial reports more frequently. It’s not uncommon for a finance team to be asked to present data on multiple scenarios or budgets weekly–at times even daily. 

To meet this demand, businesses can either add to their headcount or they can accomplish the same amount of work by relying on technology. Hiring more team members will most likely mean there’s going to be people working too many late nights for that solution to be sustainable. Over the long haul, employees will not be satisfied with their jobs, performance will suffer and unnecessary turnover is bound to happen. And at the end of the day, leaders will find themselves empty-handed, not having the analysis they need for decision making.

Using cloud-based data, AI allows finance teams to produce all kinds of reports–multiple scenarios, different budgets, whatever is requested–exponentially faster than they could using spreadsheets. Besides being much faster, the real advantage here is that the reports will present accurate data in real-time.

CFOs and other leaders will know cash positions for more accurate forecasting and will be better informed for optimizing cash management. If modifications are needed or if fluctuating market conditions call for a revised business model, they won’t be second guessing based on numbers that aren’t up-to-date.

2. AI-enabled software removes human error from the equation

No one is suggesting a completely automated office of the CFO run by robots. Humans are vital to finance operations for oversight and the ability to make innovative decisions. But the benefits of AI are undeniable: No incorrect data input, no miscalculations, or sick days which can slow progress. Human mistakes and even poorly designed software can have undesirable consequences. Imagine the ripple effect of problems that can happen when just one clerical error shows up on a spreadsheet and an invoice is sent with an incorrect amount due. Of course, an overpayment can always be refunded and staff can be retrained on new workflows, but as a business scales and the volume of collections increases, fixing mistakes after the fact is inefficient.

Not only does AI accurately capture data from sources, it can pick up on abnormalities and discrepancies at granular levels because it’s programmed over time to detect historical patterns and behavioral trends. These errors can be flagged for review by the finance team before they become problematic.

3. Solutions with AI free finance teams to work on strategic initiatives

When you use automation to complete the tedious, repetitive manual tasks that normally would fall into the hands of finance professionals you improve their job satisfaction and reduce the risk of employee burnout. With the time they would have previously used for simple data input, they can focus on the high-value items that they find rewarding and challenging. They will be empowered to make informed decisions that ultimately drive growth.

Also, keep in mind that the next generation of professionals expect organizations to be using advanced technology, including AI-enabled credit and collections software. The younger workforce embraces digital tools and places a high importance on having them available so they can make meaningful contributions at work. According to Oracle, “91 percent of Gen Z employees say they would trust AI to manage their organization’s finances.” 

4. AI helps businesses scale without the usual hiccups

Reporting and reconciliation can take countless hours if done manually. AI efficiently handles all those monotonous tasks in a fraction of the time–without errors. Companies save on the time it takes to complete the necessary tasks and also save time by not having to conduct an investigation to find where an error occurred. 

So with AI, companies save on overhead costs. They end up gaining valuable working hours that can be put to better use. Some may wonder if finance and accounting professionals risk losing their jobs if credit and collections software is implemented in their organization. Put those fears aside. It’s more likely that a company will experience higher profitability and be in a position to hire more employees rather than let any go. It’s the companies that stick with their outdated manual processes that face the real risk of losing a competitive advantage by not adopting credit and collections software. 

Are You Ready for the Next Big Thing?

Automated credit and collections software solutions have been streamlining AR processes for a while now. And more and more of these solutions have evolved to leverage advanced data technology, machine learning and AI to further improve and enhance forecasting and overall cash management.

Leading the way in AI-powered cash management software, Payference has become the preference of finance teams everywhere because it allows them to manage their entire cash flow and working capital options with a single solution. It gives them all the features they need to do their jobs in less time with higher accuracy. The platform integrates with accounting and ERP systems and is easy to use. In fact, businesses can go live in a matter of hours.

If you’d like to find out more about the benefits of credit and collections software and how it can impact your AR processes, reach out to Payference today.