Business outcomes being challenged.
$1.2 trillion of cash is held hostage in debtor balances on the balance sheet.
PWC working capital report
• DSO (days sales outstanding) has increased by 59%
• 25% of businesses have seen an increase in DSO of 10 days or more
• Aged debtors have increased by 48%, increasing bad debt provision
• 17% have seen an increase in bad debt
• Businesses that rely on manual AR processes often have 30% longer average DSO
Process not fit for purpose. What finance leaders are reporting on AR processes.
The current challenges are showing that existing processes are not enabling AR departments to achieve business outcomes.
• 55% of finance leaders are less than satisfied with AR processes
• 52% of finance leaders say too many manual processes are the biggest weakness of AR
• Only 23% have some kind of cash application automation
12 is the lower number of days taken to collect debt for those businesses using
• Organizations without AR automation spend 67% more time following up on late payments
• 50% highlight operating costs as an AR problem area, followed by manual processes (49%) and process speed (48%)
The degree of automation used in managing AR strongly relates to businesses ability to shorten collection cycles.