The Evolution Of Modern Receivables Management With Machine Learning

Benno Eberle

Receivables management has been an essential function for finance departments for decades. It improves days sales outstanding (DSO) and working capital and builds customer trust and relationships, to name a few advantages.

And while the supporting tools have matured over the years, some people don’t expect big innovations in this space. But there are a lot of new trends that again can boost efficiency and open fascinating new ways of optimizing processes.

Trend 1: A strategic leadership role for finance via digitalization

While in the past, most of the data was accessible only from receivables managers, today it’s crucial that the business gets access to the latest numbers directly. It’s essential to make better decisions while having complete transparency into the customer relationship. Here’s an example: A customer might have a good credit rating in some countries but a poor one in others. As a solution, we need to implement and enforce a global credit policy across the enterprise and to get a holistic view of the customer in any business situation, in any country. Direct access to this consolidated information from the relevant stakeholders is the fundamental basis for better business decisions.

Trend 2: Lower risk with real-time market information

The economy is changing fast, and volatility is constantly increasing—thus, access to market information is more important than ever before. Having real-time access to credit information is an essential pillar for successful businesses. The upside: There are many credit rating agencies out there, and most have a regional or industry expertise where they are the leaders. Hence, global companies need contracts and real-time integration with many credit agencies around the world. State-of-the-art solutions are connecting finance systems with credit agencies in real time without the need to build and maintain the integration to the agencies. These cloud solutions are always up-to-date, aligned with the newest agency interfaces, and easy to use with one user experience, regardless of agency used.

Trend 3: Increased customer collaboration

Every business is looking for ways to improve customer interactions. When it comes to understanding customers’ bulk bank transfers, however, reconciliation can be a challenge due to incomplete deliveries and cash discounts for some line items. By giving customers access to data with the help of a cloud solution, both sides win tremendously. The customer can advise on payments or even directly start payment processes, which can eliminate obscurities on both ends by nearly 100%. Interacting during disputes based on a joint data sources greatly simplifies and streamlines handling on both sides. Finally, this new transparency and openness between customers and vendors increases customer satisfaction, trust, and loyalty.

Trend 4: Higher automation and efficiency with machine learning

Finance functions need to get rid of manual recurring activities that create no value; employees need to focus on more productive and strategic tasks. Machine learning, for example, optimizes the matching of payments with invoices. As a foundation, the algorithms learn from a human’s decisions from the past and don’t just start with a very high matching rate. More important, they constantly learn from the newest exceptions and adapt and optimize their behavior.

Watch this video to learn more.

How to get there and benefit from new technologies

Successful enterprises need to drive innovations without disrupting their current business processes and applications. Even when existing system landscapes are highly complex, with a cloud extension, you can start to benefit immediately.

Simply choose the scenarios you would like to benefit from and start your transformation with specific, affordable, easy-to-run cloud extensions. This will allow you to solve specific pain points and to gain experience with new technologies while keeping your core stable.

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Benno Eberle

About Benno Eberle

Benno Eberle is senior director of Global Solution Marketing at SAP. He is responsible for product marketing for SAP's solutions for the Finance line of business. Benno focuses on the SAP S/4HANA Finance solution portfolio, which comes with mature but easy-to-use functionality for finance professionals and is crowned with the newest innovations and technologies in the cloud. His objective is to make existing and future customers aware of the fascinating business value this portfolio brings to successful organizations across the globe, helping them to transform and shape their organizations for the future.