According to the Harvard Business Review, “If you can identify a few key microdecisions that can be addressed and improved, you can often dramatically improve performance.” We believe that 2018 will be the year of data, details and microdecisions that will drive AR teams to greater efficiency and give organizations a competitive edge.
Finance and accounts receivable trends in 2018 will be focused on getting data and using it to make microdecisions which will create a macro impact within businesses. By building out the infrastructure that will give everyone from credit manager to CFO complete transparency into cash flow and the real costs of invoicing and payments, decision-makers can refine accounts receivable (AR) processes and improve strategies. All of these small decisions will add up to big impact on the bottom line; by optimizing the details and finding small ways to cut costs, teams can improve cost management and customer experience while efficiently allocating resources.
None of this is possible without access to data. Data shines a light on the details, the inefficiencies, the tiny areas where the time is wasted and money is lost. You can only make smarter financial decisions when you have the accurate information that shows the complete picture.
So how do we get access to this data? Organizations will need to implement new analytical tools and automation technologies in order for managers and executives to gain access to real numbers that answer questions they never thought to ask. Here’s a look at the three 2018 trends that will create the biggest impact:
Predictive and Prescriptive Analytics
Executives and other decision makers need to insightfully process the exhaustive amount of data crossing their inbox each day. Anyone who needs to take full advantage of the data at their fingertips should utilize what Gartner analysts are calling predictive and prescriptive analytics.
Predictive analytics seeks to answer the question “What is likely to happen?” It emphasizes prediction by analyzing data over a period of hours or days, instead of months or years, and it focuses on relevant business insights using predictive modeling, regression analysis, and patterns. Prescriptive analytics answers the question, “What should we do?” or “What can we do to make ‘X’ happen?” Instead of providing theoretical insights, it helps business leaders identify the best decision option in any situation. Prescriptive analytics uses machine-learning, graph analysis, simulations and other processes to help leaders understand their data and achieve the right outcomes. Combining these two analysis models helps credit managers and CFOs develop concrete answers to cash flow questions, and can align goals, such as cost savings, with real business strategies.
Artificial Intelligence
In 2018 the uses for AI technology are becoming more sophisticated than ever. Beyond using smart technology to handle manual labor, such as robotic process automation integration for automated cash application tasks, artificial intelligence will transform organizations in new and creative ways. Instead of focusing on single tasks, smart technology will predict events and activities for a more holistic approach to automation. Over the next few years, we predict that artificial intelligence (AI) technology will be adapting to the way we do business instead of the other way around.
What does this mean for the world of accounts receivables? It means that organizations will be able to increase customer engagement and provide a better overall experience more efficiently. This will help increase loyalty and sales, while reducing costs and utilizing fewer resources. The use of virtual assistants in devices and smartphones has already provided the first steps into this new technology landscape. By laying the foundation for the business application of AI using cloud-hosted solutions today, organizations can benefit from not only operational efficiency, but also from the data that automation provides. And as we know, real-world data can help accounts receivable (AR) teams make decisions that yield optimal results.
IT Financial Management
In 2018 companies are going to drive strategic business outcomes by focusing on IT financial management. Gartner predicts that business will spend up to 17% of their budget on IT financial management solutions this year, which can provide businesses with greater cost transparency. When finance leaders have insight into the real cost of doing business, from sending invoices to collecting past due balances, it can help them find the right answers and take action to drive down costs and remain competitive. The analytical reporting these tools provide can be the most important tool in any CIOs toolbox, giving them the ability to identify weakness, forecast trends within their industry, and make decisions to remain competitive.
Are you ready to face 2018?
Each year it becomes more difficult to stay competitive. Rising above the competition gets harder and harder each year, especially when faced with challenges such as smaller margins, growing costs, postal increases, data security threats, government regulations, and an aging workforce. The only way organizations can stay in business in 2018 is to become leaner through automation technology and increasing transparency. Once these pieces are in place, improvement isn’t completed, it’s only just started. Leaders need to constantly monitor data and use it to make tweaks that focus on optimizing the details. Organizations that master the art of using data to make microdecisions will stay relevant and competitive and reap the maximum impact.
About the author:
Adina Rubin is a writer at Billtrust. She can be reached on LinkedIn and Twitter.