Invoices are bogging down A/R teams across the board: What’s the answer?

The more invoices a business is sending out, the better the health of the company. After all, a lot of invoices in the pipeline means a company’s products or services are in demand. What CFO wouldn’t be happy in that situation?

Answer: The CFO who knows his or her accounts receivable (A/R) team is hopelessly behind on processing said invoices. As a result, cash on hand is always shorter than it should be.

Nearly 40% of CFOs revealed their “A/R teams are weeks or months behind and will never catch up on invoices,” according to the Versapay/Wakefield report, The Path to Better Invoicing: How Collaborative Technology Accelerates Cash Flow. “[Fewer] than a quarter of CFOs (23%) report their A/R teams are completely up to date on invoices.”

Three hundred CFOs were surveyed, split 50/50 between chiefs utilizing collaborative payment portals or standard systems, and all from companies that send out a substantial number of invoices on a regular basis.

To the question “How backed up is your A/R team generally?”:

• 2% said “we’ll never catch up”
• 14% reported “weeks behind”
• 22% said “months behind”
• 38% are “almost caught up,” and
• just 23% are “up to date.”

Two factors contribute most to delays in processing payments – invoice volume and invoice amount. The median amount of invoices processed per month is 1,800.

Bottom line: Tech spend is the only way to boost cash flow

The good news is, CFOs are well aware of their A/R shortcomings and what can be done to fix it. “[96%] agree their A/R teams would be more productive if they could work more collaboratively with their customer’s accounts payable and their own internal teams, with more than half (54%) strongly agreeing.”

Upgrading to a collaborative – or automated – system takes time and money. Some companies try convincing their largest customers to make automated payments or accept payments without the help of a software vendor. If A/R is already behind in processing invoices, the time spent on an in-house invoicing overhaul is sure to make the problem worse.

Companies have a variety of software solutions available to speed up payments and processing and eliminate paperwork. Just remember, the best vendors should be able to:

• guarantee an automated system is up and running between 30 to 90 days
• handle almost all of the “heavy lifting,” such as customer outreach and syncing bank accounts
• train A/R staff on all the bells and whistles of a new system, and
• demonstrate success stories with similar-sized companies.