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Top Tips to Improve Cash Flow Forecasting With Digital Accounts Receivable Automation

Financial professionals invest heavily in learning how to improve cash flow forecasting. Knowing what to expect in revenues and expenses can significantly improve business operations. Managers can use this information to make time-sensitive decisions that allow them to seize opportunities or avoid crises.

How To Improve Cash Flow Forecasting

Predicting expenses is the easier task of the two. Determining whether clients will settle their invoices on time presents a far more complex undertaking. The good news is that digital accounts receivable can significantly transform and simplify this process for your business. In fact, 92% of executives holding top finance positions have already begun to leverage this tool.

1. Identify a Potential Task for Automation

Automation has a wide range of potential applications. This holds true even if you focus on accounts receivables. Take a close look at the process and determine the exact steps you would like to automate and why you choose those over others. Ideally, you start with tasks that meet the following criteria:

  • Requires workers to perform tedious and repetitive tasks
  • Involves high risk of human error
  • Requires little or no creativity or strategy
  • Creates bottlenecks in the organization

2. Look for Customizable Solutions

The whole point of automation is to make things easy. Shouldn’t the process of digital transformation be just as easy? This is the rationale business managers often use when choosing off-the-shelf solutions for complex problems. Instead, look for solutions that offer opportunities for customization.

3. Expand Your Criteria With an Evaluation Checklist

Customizability and integration are top criteria, but they are only the tip of the iceberg. Managers often complete a thorough needs analysis to determine what they need from potential vendors. These are some of the critical issues you need to consider:

  • Whether the software provider has experience working with companies like yours
  • How well the product integrates with your existing business hardware and software
  • Whether the company offers good customer support to assist with the transformation
  • Whether the accounts receivable back-end design looks user-friendly for your A/R team
  • Whether the customer portals look user-friendly for your customers
  • Whether the costs match your budget

4. Get Stakeholder Buy-In

Digital transformation is a big undertaking. It requires financial investments and human resources to complete the task. Ensuring you have all hands on deck before you begin can ensure a smooth transition. Failure to get buy-in across the board will lead to resistance. This can negatively impact worker productivity and your ability to collect payments on time, so treat this as a priority.

These are some of the top questions you might need to answer:

  • How much control will we retain over A/R processes?
  • Why should we change the current process?
  • Will it cause a major upheaval for our clients?
  • Does this affect job security for the A/R team?
  • How much will it cost?

Managers often only seek buy-in from the higher-ups funding and approving the transformation but look beyond this. For example, you need buy-in from your employees who will use the system to manage the A/R process. Ideally, you also get buy-in from customers who will rely on the customer portal to make payments.

Examples of How Businesses Use Automation To Improve Cash Flow Forecasts

Most managers accept that automation can boost cash flow. Nevertheless, you need to know how well it accomplishes this and how other managers orchestrated their success. Consider these brief examples. Both companies saw an improvement in cash flow forecasts because automation boosted revenues from invoices and reduced the cost of extra labor hours.

1. Wochit Eliminated Manual Tasks

Wochit reviewed its accounts receivable practices and determined they needed more efficient processes. The A/R team spent a lot of time on manual tasks that took a significant amount of time. Consequently, the cloud-based video creation company turned to Gaviti to automate these tasks. They enjoyed the following results:

  • Offloaded manual tasks to an automated system
  • Achieved effective collections performance despite limited human resources
  • Freed up time the A/R team could use to handle more complex issues

2. Burwood Reduced Receivables at Risk

Burwood faced serious challenges collecting payments. The IT company’s accounts receivable team racked up overtime hours trying to resolve the issue, but this did little to boost cash flow. The company used Gaviti to automate its collection process. It saw the following results in less than six months:

  • 77% reduction in RAR
  • 60% reduction in outstanding invoices
  • Consistent boost to cash flow
  • Reduced overtime hours

How To Improve Cash Flow Forecast With Gaviti

We make it easy to streamline and automate even the most complex A/R tasks at your organization. Our software can make it easier to optimize all A/R tasks involving tedious and repetitive steps. Our clients have used our software to automate their dunning strategies and create customer portals that give control back to customers while saving your team time. Speak to a Specialist to get started.


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