Stories : Ours & yours

Accounts Receivable - Don’t try and change the customer

December 22, 2017
By Rimilia

Stop trying to change the customer’s accounts payable process

It’s not unusual to have customers that pay on time but provide bad information. It’s frustrating, but the answer is usually a case of turning bad information into usable information.

Unfortunately, for some, they see the solution as trying to change the customer’s behaviour to suit them rather than looking for another way around.

You can try, but in reality, you’re going to have limited success. We’ve seen it so often, a company trying to send out remittance templates for suppliers to complete. They just won’t do it.

You have to remember that the customer might be dealing with thousands of suppliers and they’re not going to change their AP system and processes just to suit you.

Thankfully, there are ways to get around the dilemma without encouraging the customer to drastically change their processes. To start with, let's not go back and annoy the customer by making them change something they probably won't do anyway. It’s better to interpret and read it.  

For repeat customers who constantly cause issues, it’s possible to identify the ones where you need a remittance and where the remittance always comes after the payment.

In the interest of both the customer and the finance team, it’s best to just ask for the remittance a little bit earlier, prompting the right customers to change the right behaviour for the right reasons.

With this, you end up providing better customer service by focusing on the right change, not on complete change.

Beyond these small incremental changes, it’s possible to use AI-driven software and predictive analytics, which can analyse the customer behaviour and adapt to it rather than trying to change it.

Predictive Analytics

Despite the fact that customers might provide bad payment information, most companies are sitting on a lot of raw data that isn’t being utilised.

By taking advantage of this data with predictive analytics, it’s possible to pick out patterns that can be used to predict when customers are going to pay, meaning you don’t need a remittance for every payment.

While some companies are realising the value of this, three out of five people in leadership roles are saying that a failure to get on board with big data could lead to obsolescence. To truly be data-driven, finance departments need to harness the power of big data and predictive analytics.

Along with machine learning and RPA, predictive analytics contributes to a true AI solution  and when used together can produce tangible results above and beyond their use individually within finance teams.

Software utilising predictive analytics can exploit patterns found in historical and transactional data to identify risks and opportunities. This can be used to great effect where there is a huge amount of historical data such as in credit collections and credit management, providing additional intelligence to a credit professional to make strategic decisions.

Stop trying to change the customer’s accounts payable process

By putting new processes and procedures in place in your finance department, you can make changes without requesting customers to. Better still, you’re only changing one process rather than relying on multiple customers to adapt their accounts payable for how you work.

At Rimilia, we always say: "Don't always try to change the customer's behaviour because AI-driven software can analyse that behaviour and adapt to it instead."

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