What a world we’ve been plunged into. Organizations have been frantically deploying their BCPs and coming to grips with a new way of working. What normal will look like again, we don’t know, and likely won’t know for quite some time.
But one key business practice that remains a high priority for everyone is ensuring a healthy cash flow and safeguarding the future of their businesses. SSON recently surveyed shared services teams globally and gathered their initial responses to the crisis in this industry report.
Here are the highlights.
Access to Cash Is Vital
There is no substitute for cash, and in uncertain economic times, enterprises that survive and accelerate are generating cash to keep their operations running. As a result, SSC and GBS businesses are rethinking their financial strategies and turn their growing focus on cash flow, working capital, and for many, the largest asset in their businesses: debtors.
SSON’s latest report states that a few weeks into the “new normal,” 12% of respondents reported an increase in the cost of shared services operations. They also reported a decline in productivity of core shared services processes, such as collections, where 6% reported declines leading to significant profit margin erosion and bad debt write-offs.
Therefore, in the current times and the months to follow, focus and priority will be placed upon turning invoices to customers into cash from customers.
Turning Lemons into Lemonade
SSON suggests that now is a good time to review, reduce, and even eliminate policies and procedures that create bottlenecks or just simply don’t add value. Once teams move away from a “this is the way we’ve always done it” mentality, they can begin carrying out their roles and tasks in a different way.
The survey suggests that the shared services model will change in the times ahead, and organizations are looking to recalibrate global service models.
The New Order: Work From Home
Working from home (WFH) previously held many concerns for shared service leaders, but the report highlights that 75% of service-level agreements are still being met. WFH also provides organizations with flexibility not previously imagined prior to the crisis.
As a result, SSC leaders are looking at ways to enhance operational agility and scalability. Also important is providing the team members with direction on which tasks are priority, thus ensuring the outcomes needed will be achieved. At the same time, productivity can be measured and balanced against the results being achieved.
Cloud-based finance automation software can be accessed from anywhere in the world, so when remote working is necessary, it gives SSC businesses the ability to ensure seamless operations at no extra cost.
Can Automation Unlock More Cash?
Fifty-two percent of the respondents stated that GBS/SSO models will become increasingly digitized, and 37% say it will accelerate their automation initiatives to reduce their dependency on physical locations/humans. So, it’s inevitable that COVID-19 will inspire change and trigger more investment in automation and the cloud.
With less commuting, executives may have more time for reflection and planning, using this time to fast track their automation initiatives and improve the operations of SSC centers.
They also now have precedence to eliminate and streamline processes that are error-prone, time-consuming, and require much human intervention, justifying investment in smart intelligent tools that previously were low priority or constrained by budget.
Now is the time to create the “new normal,” automate what can be, and allow human effort to focus on managing customer relationships to maximize cash collections and reduce the risk of non-payment.
Ready to get started with automating your cash application process? You can learn more here.