Painting a Picture by Numbers in Accounts Receivable

Cash application is the cornerstone of the accounts receivable (AR) function and having visibility into your true debt position is the starting point to effective collections. For many of our customers, BlackLine Cash Application is not just about transactional matching, but the start of the journey to excellence in AR.

Here are the key performance metrics or business measures that are currently most impacted in accounts receivable, and the solution for all four of these challenges.

1. Business outcomes being challenged.

$1.2 trillion of cash is held hostage in debtor balances on the balance sheet.

PWC working capital report

According to the recent IOFM Survey:

• 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

According to the B2B Payments Innovation Readiness Report:

• Businesses that rely on manual AR processes often have 30% longer average DSO

2. 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.

According to the recent IOFM Survey:

• 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
AR automation.

According to the B2B Payments Innovation Readiness Report:

• 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.

Orange, yellow, while and clear connected geometric shape.

Hovering geometric shape comprised of a collection of white and orange balls.

3. How automation makes a difference.

These customers have used AR automation as a catalyst to improve processes and outcomes.

“BlackLine Cash Application is a brilliant product. I'd question anyone not wanting it. You can absolutely reduce your costs by at least 75%. The cost vs. benefit is a no-brainer. The solution has so much functionality and flexibility to set up processes exactly the way you want.”

“BlackLine Cash Application has allowed the credit controllers to focus on collecting cash and managing risk. It is no coincidence that in the same period we have achieved outstanding cash collections, our bad debts have been lower than the industry standard.”

“We now enjoy an 85%-95% multicurrency cash application match rate, which allows the accounts receivable team to focus on debt collection using a clean, accurate, and up-to-date sales ledger.”

“In more than 50 countries we now have one process, rather than 15 to 20 variations of the same process. This brought stability to the process, and now our auto-match for cash application is far beyond our expectations.”

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4. How BlackLine automation transforms cash application.

Cash application is much more than a matching process—it is the cornerstone of the AR process and an enabler for success.

Process

80%

of payments applied to the invoice level in minutes

85%

of manual effort removed

100%

of payments matched the same day

People

Confidence

in the process plus real-time visibility

Reduction

in unnecessary and costly rework

Time to Focus

on actions that drive outcomes

Results & Outcomes

Unapplied cash reduced by 99% and associated rework removed

Greater control, with audit reviews done in hours, not days

Some organizations saw an 8-day DSO improvement within 12 months

Painting a Picture by Numbers in Accounts Receivable

Here are the key performance metrics or business measures that are currently most impacted in accounts receivable, and the solution for all four of these challenges.

1.

Business outcomes being challenged.

$1.2 trillion of cash is held hostage in debtor balances on the balance sheet.

PWC working capital report

2.

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.

12 is the lower number of days taken to collect debt for those businesses using AR automation.