In the dynamic world of finance, accounts receivable (AR) and accounts payable (AP) are taking on a more strategic role in driving business success – 75% of finance leaders acknowledge this shift (1).
Organisations can streamline operations, reduce errors, and improve overall efficiency by digitising AR and AP workflows.
In our latest webinar, Pieter Le Roux, Group Manager of National Shared Services at Coates, shared how his team transformed their AR and AP functions through automation. Here, we’ll recap the discussion on how Coates tackled their AR and AP challenges.
The challenge in AR at Coates: Dispute management overload
Dating back to the gold rush period, Coates is Australia’s biggest equipment hire and solutions provider. With thousands of customers and transactions every month, managing AR effectively significantly impacts cash flow and customer satisfaction.
In the past, these would be flagged by an Accounts Receivable Officer through emails to branch managers and recorded on a general dispute register. This approach was cumbersome for several reasons:
- Manual processes: Previous systems relied on AR officers flagging disputes and sending individual emails to branch managers. This created an overwhelming volume of emails and inconsistent follow-ups.
- Lack of accountability: Without clear tracking, disputes could linger unresolved, leaving AR teams chasing responses and impacting the company’s ability to collect cash.
- Customer experience: Delays in dispute resolution created a negative experience.
“We wanted accountability and a better way to control disputes. Ultimately, we wanted to stop just reacting to disputes, but understanding them,” says Pieter.
During the webinar, a poll revealed that 71% of attendees still rely on email for AR and AP communications. Here’s how automation could help your organisation drive efficiency and productivity – just like it did for Coates.
How workflow automation streamlined AR and AP
To address these challenges, Coates implemented an automated workflow solution, which they applied to both AR and AP processes:
- Centralised workflow: Disputes were logged into a system that assigned them to the responsible branch or individual.
- Consolidated communication: Instead of multiple emails, branch managers received one summary email per day with all pending disputes, making it easier to prioritise and act.
- Automated follow-ups: The system sent reminders for unresolved disputes, ensuring timely resolution.
- Performance tracking: Service level agreements (SLAs) were attached to every dispute type, leading to better performance and accountability.
Since implementing the new system, Coates has seen significant improvements across several areas:
- Accelerated cash flow (the average resolution time decreased by 54%).
- Reduced administrative effort and workload efficiency, staff can perform more value adding activities to grow the business.
- Strategic insights on the root causes of disputes, to proactively reduce them.
- Enhanced customer experience.
Practical tips for success
Avoid perfection paralysis
Rather than strive for a flawless system from the outset, address the most pressing issues. Overly complex solutions can lead to delays and stall progress. By applying the 80/20 rule, businesses can prioritise the critical 80% of problems with the most significant impact, leaving less critical refinements for later.
Start small
Build a proof of concept to demonstrate benefits with minimal cost and risk. Pieter says, “If there are ten issues, just focus on two of them. You’ll be amazed how that real-time factual data speaks volumes when you start trying to convince stakeholders. Now you can say, ‘Imagine what we can get if we do the other eight’ – that’s very powerful.”
Ensure continuous improvement
Implementing a solution and thinking it’s done is a mistake. The finance environment is constantly evolving. Assign clear ownership to maintain and optimise the solution over time. Regularly review and update processes to meet evolving business needs, ensuring the organisation doesn’t fall back into inefficient manual workflows.
Leverage compliance benefits
By identifying process gaps and highlighting areas of non-adherence, they create accountability across teams. Actionable analytics help address problem areas and individuals resistant to change, while targeted training and refined processes reinforce compliance and foster a culture of continuous improvement.
Streamlining AR and AP doesn’t just improve cash flow – it also enhances customer experiences and boosts accountability. Coates’ transformation highlights the power of technology to drive real business results.
If you face similar challenges, speak to the Satori team and explore scalable solutions that deliver real results.
(1) Treasury Webinars and BlackLine Survey 2024
