Companies around the world are still coming to terms with the impact that COVID-19 is having on their business. But even before the current situation emerged, many companies were experiencing pressures on profit margins. Declining profitability will impact cash flows and late payments will impact provisions which in turn will impact on profitability. All at a time when many businesses and their customers will be facing an uncertain trading position when we return from the lockdown.
According to the recent report from EY the crisis presents opportunities for companies to build resilience and reshape results. We’ve summarised this report in bitesize chunks for you to read.
Companies will restart their transformation plans after the immediate crisis is over. Pre-crisis, transformation was high on the corporate agenda. These plans have been paused for many companies. But they will restart, possibly with added energy, once the situation stabilises. The case for change is never stronger than when adapting to a crisis — and in many ways, the unwelcome and unexpected emergence of COVID-19 will further cement transformational strategies in the boardroom. Managing through the downturn requires operational focus to preserve revenues. Planning for recovery will see a greater focus on raising profitability, attracting and retaining customers, and being paid. Transformation requires a shift in strategy. But that strategy itself should always encompass an ability to transform. Agility, flexibility, and resilience today are the foundations of success tomorrow.
Cash is king
One key attribute in the report, and indeed in the majority of the reports and commentaries in the news at present, is the essential requirement for cash. More than a third (36%) or organizations surveyed confirmed they are fast-tracking their investments in automation. In previous years P2P has received a large amount of investment to improve the process. In reaction to uncertainty, Finance Executives are now turning their attention to work out how they can accelerate their cash collections and improve working capital when reviewing their Accounts Receivable processes.
The report also highlights that good working capital management will allow investment in future growth opportunities. Cash was, is, and always will be, critical for the financial health of a business. Now is the opportunity to reshape how debtors, one of the largest assets of any business are managed.
Reports say “transform now for success tomorrow”
Can you look beyond the immediate crisis to see the next steps? Executives need to develop systems that can pivot quickly as circumstances change and this as never been more important for the management of Debtors. Doing what we have always done is no longer an accepted norm. Therefore, looking at automation in the Accounts Receivable process is not only needed to improve results and increase efficiency for emerging out of this current crisis but will provide the basis for companies to transform their business.
The report suggests that one lesson from the global financial crisis from just over a decade ago was businesses that outperformed their peers were the ones who made successful acquisitions. It is clear and the time is now for investment in the Accounts Receivable function to use intelligent automation from best of breed solutions to not only survive but to transform and accelerate future performance.
To learn more about how to turn your debtors in cash read some stories from our customers who already automated their accounts receivable function.