CM September 2020

OPINION
START THE
REVOLUTION
Invoice-to-Cash (I2C) automation is coming of age.
AUTHOR – Holly Scott-Donaldson
THE COVID-19 crisis hasn’t so much
changed business priorities as focused
attention on a smaller number of
absolutely critical issues. Invoice-to-
Cash (I2C) automation is one of them.
From a business perspective, the
COVID-19 pandemic has been a huge wake-up call.
For most businesses, a small number of ‘nice-tohaves’
have suddenly become mission-critical. For
instance, banks have always aspired to have good
online services; but with physical branches closed,
this ambition became a necessity. Manufacturers
always prized agility; but when the lockdown caused
demand to surge or wane – or demanded that the
company pivot to a completely different business
model – agility took centre stage.
The finance function is no different. Prelockdown,
the number of invoices that were paid
late was below 16 percent: by May, that number
had ballooned to 53 percent – or more than half!
Suddenly, poor I2C management became an
existential threat: for many companies, getting cash
through the door was the difference between getting
by and going under.
With many sectors closing their doors as a
result of the lockdown, some of these non-payment
problems were clearly attributable to customers’
cashflow issues. However, many businesses found
that the problems were much closer to home.
DEAD LETTERS
Companies issuing paper invoices found that these
were effectively ‘dead letters’ sent to offices that were
no longer open and so simply weren’t reaching their
intended recipients. Many finance departments
rushed to furlough employees in a bid to stem their
outgoings; only to find that they hadn’t retained
enough resource to staff the AR function effectively;
or that furloughed sales staff were not available to
provide the insight necessary to resolve queries.
Suddenly, casual conversations about automating
the I2C process took on a whole new significance,
because those companies that had already invested
in I2C automation found that they were far better
placed to cope with the impact of the COVID-19
crisis.
For example, an online billings portal gives
customers access to all the information they need
– from wherever they happen to be. It also allows
customers to self-serve – for example, highlighting
specific issues they have with an invoice so that
these can be resolved quickly.
At a time when all expenses are under intense
scrutiny, I2C technology also dramatically lowers
the cost-to-serve by eliminating print and post costs;
and automating routine tasks so AR staff can do more
with less, and focus on value-adding activities. It
can also serve as a repository of all key information,
reducing the dependence on individuals who many
not be available to provide input.
THE ‘C’ WORD
But, focusing on the ‘I’ in I2C – the invoicing –
addresses only one part of the problem. As the crisis
unfolded and cash was recovered from more liquid
customers, attention shifted to aged debt – putting
the focus strongly on the collections end of the I2C
process.
With as many as half of invoices unpaid, it’s often
difficult to see the wood for the trees. One of the
key benefits of I2C automation is that it provides
clear, consistent and data-driven visibility of your
aged debt profile; enabling you to develop smarter
approaches to aged debt, testing and optimising over
time based on real results rather than assumptions
and habit.
Aged debt analysis
Advancing the credit profession / www.cicm.com / September 2020 / PAGE 18