Why Cash Intelligence Is Vital to the Controller

In a growing business, a controller’s job can get very complex, very fast. Managing cash flow, overseeing budgets and financial projections, and reporting to the CFO—these and other duties quickly get complicated as a company creates new product lines, enters new markets, or acquires or merges with other businesses.

The last thing the controller needs is to face these challenges with an uncertain grasp on accounts receivables, stemming from uncertainty about cash reserves. Or, to put it bluntly, uncertainty about which customers are paying, which are not, and why not.

“For a controller, knowing that you will be paid—and when you’ll be paid—is a top concern,” says Brian Morgan, Director of Product Marketing at BlackLine. “It can affect everything from budgeting and new-business planning to investor confidence in the company.”

Being paid has always been important to organizations, but never so much as in the past year—and continuing into this year—thanks to the long-reaching global impact of the COVID-19 pandemic.

As the Institute of Finance & Management (IOFM) said recently, “Slow-paying customers created a ripple effect during 2020. Their delay in paying vendors—or their failure to pay altogether—not only impacted the vendors, but the vendors’ own suppliers.

“Collections professionals had a delicate line to walk—between being sympathetic to their customers’ plights and collecting the cash needed to fund their own organizations.”

The solution? The IOFM advocates for AR automation. Brian Morgan takes a step further and advocates for AR intelligence in BlackLine Cash Application. This solution can typically—and instantly—automate reconciliations for at least 80% of all payments received.

Cash Application also has an intelligence feature that produces trend reports ranging from payments versus terms analysis and Days Sales Outstanding to bank utilization and customer behaviors.

These reports are useful throughout Accounting, but they prove essential to the controller.

“The controller’s job has changed and progressed in the past few years,” says Morgan. “The controller’s role used to be making sure the numbers stack up before presenting them to the CFO. That’s now a given.

‘’But in most companies, the controller is seen today as a forward-looking chief value extractor. This is someone who can maintain good governance, drive technological change, and contribute significantly to future revenue streams and investment returns.”

In the same way, notes Morgan, AR automation was first seen as simply replacing keystrokes. Effective, for sure, but not nearly as impactful as today’s more intelligent versions. The added AR intelligence now gives the controller a solution that can, according to Morgan, bring data alive and in real-time.

“By having this data available quickly and easily, various teams—AR, sales, and others—can see what actions are needed to improve cash flow,” he says. “But for the controller, this information is gold. With it, he or she can quickly understand the revenue stream of the business and the organization’s working capital position.

“This is the kind of knowledge that the CFO and other executives are crying out for, and that can help them position the company to its best advantage.”

Read our latest issue of BlackLine Quarterly for more stories like this that can help your F&A organization move out of the disruption caused by the pandemic and into the light of a more normal—and fruitful—future.