Transforming the CFO playbook with data analytics

Over the last few years, the finance function has been going through a significant digital transformation, driven by the ever-increasing importance of data and analytics. Today, CFOs are no longer content with simply reporting on past performance; they are demanding real-time insights and predictive capabilities to make informed decisions and drive strategic growth.

Data and analytics take center stage here. A strong data foundation is now a non-negotiable aspect of measuring, managing, and transforming the business for long-term value creation. It's even a priority initiative for a CFO’s first 100 days.

The order-to-cash cycle, central to Billtrust's operations, offers a prime opportunity for comprehensive data gathering. Diverse data streams course through our products and payment channels. Through timely and reliable data analysis, we assist CFOs and finance teams in gaining valuable insights for refining forecasting, enhancing cash management, and reassessing organizational frameworks.

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This blog post explores how leveraging analytics for accounts receivable (AR) management can empower CFOs to unlock new levels of efficiency and effectiveness. We give a sneak peek of new features that you can expect in the Billtrust platform, starting with the dedicated analytics workspace. We'll walk you through the different types of data analytics you can use.

Traditional accounts receivable (AR) management is stuck in the past, relying on manual processes and waiting for problems to arise. While everyone can't even imagine going through a day without looking at least a couple of spreadsheets to analyze, forward-thinking CFOs are embracing technology and software for improved efficiency.

As discussed in a recent blog post, data and analytics, with the help of AI, are becoming invaluable digital allies for modern businesses. CFOs can get valuable insights from their own raw financial data, gain a deeper understanding of their customer base and payment behavior which can drive strategic decisions.

But just tracking payments isn't enough. Pinpointing delays across different customer segments and identifying the root causes are equally important. These insights are essential for developing targeted strategies to address challenges effectively.

Not all analytics are created equal. To truly optimize accounts receivable (AR) management, CFOs can leverage a combination of four key types of data analytics:

• Descriptive Analytics: This is the foundation, providing insights into historical data and past performance. Track payment trends, invoice cycles, and customer segmentation to understand how things have been done. Think of it as a rearview mirror for your AR operations.
• Diagnostic Analytics: Go beyond "what happened" and delve into "why." This advanced analysis explores the underlying reasons behind financial issues and discrepancies. For example, identify reasons for late payments from specific customers or diagnose declining payment trends.
• Predictive Analytics: Shift to a forward-thinking perspective. By analyzing cash flow projections and identifying contributing factors, you gain a comprehensive view of the future. This strategic assessment helps CFOs make data-driven decisions to mitigate risks and optimize cash flow.
• Prescriptive Analytics: This is the most advanced level. It utilizes algorithms to propose actionable steps and approaches for enhancing AR processes. For instance, it can advise on suitable credit limits per customer segment, suggest optimal payment terms for swift collections, and forecast the efficacy of various collection methods.

By leveraging this analytical toolbox, CFOs can transform their traditional playbooks and further streamline AR operations, enhance cash flow management, and drive strategic decisions for the long-term.

Numerous businesses find themselves limited to the initial stages of descriptive or diagnostic analytics. This tendency is understandable: going to the next level involves leveraging data to surpass the sum of its parts.

Billtrust's new analytics workspace empowers CFOs to take that leap, pulling together data from different sources into a single and comprehensive view. This latest environment in the Billtrust platform is engineered to house an array of analytical tools to help you move finance forward. The workspace provides real-time insights through customizable dashboards, predictive reports, and drill-down capabilities for in-depth analysis, delivering answers to your receivables inquiries.

While the Cash App User Access Audit is the first module in this workspace, it will continue to grow in 2024 with several new strategic dashboards and analytics modules to help you take action on the wealth of data and information available within the Billtrust unified platform. As the year progresses, we’ll release additional modules, including Payments Analytics, Invoicing Analytics and more advanced Cash Application Analytics.

Users of a single solution within the Billtrust order-to-cash cycle have access to a dedicated environment for domain-specific analytics. Those utilizing the full Billtrust platform will soon benefit from a broader range of cross-domain analytics. In the first phase, we will merge data from payment and cash application in products to provide a comprehensive overview of customer payment processes, from initiation to reconciliation. These insights will help you identify trends, inefficiencies, and benchmark your AR operations against industry averages, so you can start perfecting your team’s performance.

With Billtrust bringing data analytics to a whole new level, you'll have a comprehensive view of your AR performance, find opportunities in your order-to-cash processes and collect cash faster.

The key here is a deeper understanding of buyer payment behavior, facilitating more precise customer segmentation and early detection of potential payment obstacles. For instance, a report on poor payers can pinpoint consistently problematic payers and accounts.

This awareness paves the way for targeted, proactive, and efficient customer engagement strategies. It enables the isolation of buyers paying on unfavorable terms and methods, provision of flexible payment alternatives, or the launch of initiatives to transition more buyers to online or digital platforms. By doing so, CFOs can cultivate strong customer relationships and mitigate the risk of customer turnover.

Outcomes

Customer data holds immense potential, and our analytics dashboard unlocks it to deliver impactful results for your business. Here's how:

• Strengthen your cash flow
  • Granular visibility: Gain a deep dive into payment patterns, invoice lifecycles, and customer segmentation. Analyze cash flowing through Cash Application by various timeframes.
  • Proactive collections: Identify trends and potential delays early, allowing you to optimize collection strategies and accelerate cash inflows. Imagine proactively addressing late payments from specific customer segments based on data-driven insights.
• Boost productivity
  • Centralized workspace: Eliminate data silos by consolidating analytical data in a central location. This streamlines access to crucial information and saves valuable time.
  • Effortless insights: Identify trends and patterns quickly, leading to significant productivity and efficiency gains. For example, easily spot critical data points like invoicing trends or bad payer patterns. We'll even quantify the time saved through our cash application tool, highlighting your efficiency gains.
• Mitigate risk
  • Early detection: Our analytics go beyond just identifying late payments. They utilize advanced tools to predict potential bad debt with greater accuracy, giving CFOs the ability to implement precise interventions.
  • Data-driven risk management: By adjusting credit limits early or enforcing stricter credit controls, risks can be minimized, and the financial well-being of the organization can be protected.
• Empower smarter decisions
  • Data-backed decisions: Comprehensive data and insights empower informed decision-making for process improvement. Scrutinize payment patterns to identify potential issues or opportunities in your payment procedures.
  • Strategic planning: A consolidated view of invoice presentment metrics can guide strategic business choices, like payment acceptance and surcharging strategies.

By gaining deeper customer insights through our analytics dashboard, you can achieve a healthier cash flow, increased productivity, reduced risk, and ultimately, make smarter business decisions.

Although highly useful when serving as the basis for identifying risks or opportunities affecting businesses' overall cash flow, traditional predefined dashboards and standard analytics frameworks have their limits. Our vision is that you will use both analytics modules and generative AI to gather the insights you need, when you need them.

Generative AI can enhance and streamline access to information by offering a platform for posing natural language questions tailored to specific use cases. In this case, AI and natural language generation will automatically analyze data and generate insights in a narrative format. Gartner even claims that by 2025 these 'data stories' will be the most widespread way of consuming analytics.

Billtrust's Finance Co-Pilot module, which will be launched in 2024 on a limited basis, leverages Generative AI to allow you to effortlessly address both common and more complex questions about payment data, with the simple click of a button. This action generates a customizable prompt that can be modified. Answers are presented in a narrative format, or whatever prompt enquiry was launched, reducing the time users spend in these predefined dashboards.

Watch the on-demand webinar → When AI meets AR: How to bring AI to life in your business

Integrating Billtrust's cutting-edge solutions into your financial operations isn't just about adopting new technology—it's about setting your business up for unparalleled success. By harnessing the power of our analytics workspace, complemented by the revolutionary capabilities of Generative AI through the Finance CoPilot module, you can unlock tangible benefits that resonate across your order-to-cash cycle.

From achieving a healthier cash flow and boosting productivity to mitigating risks and making smarter strategic decisions, the potential for impact is profound. By offering this full picture of receivables, Billtrust is committed to ensuring your organization is not just prepared but thriving in this new era.

Join us in perfecting your teams' performance and turning your AR processes into a strategic asset that drives growth, enhances customer satisfaction, and secures a competitive advantage in your industry.

Want to learn more about accounts receivable software and how it can help your company move finance forward?

Talk with a Billtrust Expert today!