What Accounts Receivable Teams Can Learn From Netflix

Blog | August 17, 2016

Reading time: 2 min

It may be hard to remember, but prior to 2007, Netflix – now a global provider of streaming movies and TV series – was mailing DVDs to its customers. Netflix made their DVDs available through a monthly rental model, so customers were constantly receiving and returning DVDs through the mail. This meant Netflix was receiving roughly 100,000 returns a day, and employees opened and examined every single DVD they received, one by one. Employees were also expected to stuff DVDs in envelopes at a rate of 1,000 per hour and with required breaks every 90 minutes for mandatory exercises to ward off Carpal Tunnel Syndrome.

If you’re in the Accounts Receivable department, this might all sound eerily familiar. In fact, most A/R teams today operate in a striking similar fashion to pre-2007 Netflix – manually printing and stuffing thousands of invoices into envelopes and manually keying remittance information from returned checks into their ERP. Manual outputs, manual inputs.

Person holding remote pointing to tv to select netflix

So what did Netflix do to eliminate their manual processes and increase operational efficiencies? They embraced technology with open arms and framed every business decision they made around a single question, always asking “What would our customers want?” Netflix automated their business entirely and leveraged existing technology and shifted away from physical DVD shipments towards online streaming. Electronic transmission not only improved efficiencies and reduced costs – it also gave their customers what they craved: instant, 24/7 access to content and control over how and when they received that content.

Accounts Receivable teams can benefit from the very same principles that propelled Netflix into Fortune 500 stardom. Leveraging new technology, accounts receivable (AR) teams can now easily replace old, analogue systems (think paper folding machines) with an end-to-end solution that automates the entire invoice-to-cash process – from invoice delivery, to payments, all the way through to cash application.

When the invoice-to-cash process is managed within a single, automated digital ecosystem, AR teams have more flexibility than ever to give their customers what they want. Whether a customer wants to switch from email invoice delivery to online delivery, make a quick payment online, or retrieve a copy of an invoice from last year, an automated invoice-to-cash ecosystem has the bandwidth to accommodate all of their preferences and needs without accounts receivable (AR) staff having to step in. It can give your customers instant access to the content and functionalities they require to do business with you.