October 20, 2021

3 Reasons AR Is Important to the Office of the Controller

3-minute read

From ensuring balance sheet integrity to balance sheet optimization, the Controller is no longer solely focused on making sure the numbers stack up. Their role has evolved into a forward-looking chief value extractor, driving technological change, good governance, and a bias for action on future revenue streams and investment returns.

Accounts receivable processes impact a number of the company’s key financial statements, and with the current focus on working capital optimization, the management of debtors has never been more in focus.

Here are three reasons why AR automation is high on the agenda for today’s controllers.

Too Much Cash Is Being Held Hostage in Debtors

In a report from 2019, PWC calculated that $1.5 trillion dollars was held hostage on balance sheets. When cash becomes more difficult to obtain from customers or when the cost of borrowing increases, we find a new focus on the importance of cash. 

By optimizing cash collections from customer sales and reduced debtors, cash availability provides the CFO with opportunities for how the money can be utilized in the business and drives further value, rather than looking for working capital from other sources which comes with a cost.

AR automation allows people to focus on the tasks and activities that will drive more cash into the business.

Cashflow: Knowing When You’re Being Paid

Getting paid is critical. AR automation transforms the accounts receivable processes that drive efficiency and increase the productivity of the AR team, who can then focus on the value-added tasks that will drive results to achieve our business outcomes—like more money in the bank.

But for today’s organizations, it’s no longer just about being paid, but understanding when payment will be received.

BlackLine’s AR Intelligence solution brings data alive in real time so finance, AR, and credit teams can use a wealth of data that’s not easily obtained on customer behaviors across the whole sales ledger. And the Controller can use this data to understand the revenue stream of the business and working capital position.

Cash Provides Shareholders with Confidence

In recent years, shareholders and investors have placed far greater emphasis on the financial health of a business and trading results. As a result, measures such as liquidity and gearing are critical key performance indicators of the financial wellbeing of a business. 

After the financial crash of 2008/9 and subsequent years, businesses invested in solutions in the procure-to-pay process, and have greater process control between the procurement and accounts payable departments.

At a time when trading performance for business is far from certain, AR automation is an enabler for the Office of the Controller, and front and center in finance initiatives to drive debtor performance.

AR Automation Delivers Value for the Entire Business

AR automation is about achieving optimum results relating to debtors and cash availability. It improves and transforms your processes, and solves the challenges of manual and outdated systems that absorb time and effort and result in rework.

Learn more about how accounts receivable automation can deliver value across your business, teams, processes, and stakeholders.

Brian Morgan

Modern Accounting