Credit Professionals Alliance, Inc.

The eCredit News is produced in partnership with the ACA, NACS Credit Services and Credit Today. Online at www.credittoday.com

July Dates To Remember: 4th: Independence Day

July 2021

Volume 229

Page 1-4: Industry News: One Year COVID: How Digital is AR? Page 5: Industry Partner Page 6-7: Education CPA Webinars CRF Webinars NCS Webinars & Extra Credit

None of Credit Professionals Alliance, its partners, employees, affiliates, representatives or advisors make any representation or warran-ty, expressed or implied, as to the accuracy or completeness of any of the information contained herein, including any opinion or any other written or oral communication transmitted or made available. It is each recipients responsibility to make their own independent judgment in regards to the information contained in this newsletter.

One Year COVID: How Digital is AR? How Finance Organizations Managed to Control Cash

By: Marko Kling, Serrala

Over the last year, finance organizations had to adopt new modes of working and acquire technology to make that possible at an acceler-ated pace. A recent report by McKinsey & Company concludes that the impact of COVID “speeded the adoption of digital technologies by several years — and that many of these changes could be here for the long haul”. Despite many organizations having some degree of automation and digital solutions implemented prior to the crisis, inefficient manual activities and a lack of consistent business pro-cess design across the board resulted in problems as global lock-downs impacted daily business. Did COVID change the perspective on digitization in finance? To keep daily cash processes running, accounts receivable (AR) de-partments had to find ways to ensure business continuity under com-pletely new circumstances – such as working from home. Many had to help themselves with workarounds to bypass manual and paper-based processes and still ensure standards were met with regard to security, data privacy and fiscal controls. The lack of automation quickly became a burden for many organizations, putting it at the top of the agenda at the highest levels of the company. For instance, CEOs and CFOs were unable to make decisions due to missing data, as generating accurate forecasts took too long. All of these develop-ments, among others, resulted in many organizations choosing to accelerate their digital transformation in finance – especially in ac-counts receivable, where (one could argue) it was needed most to ensure the cash process keeps running smoothly. Continued...

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How the Cloud took off in 2020 Organizations have been steadily moving to the cloud for over a decade now, but there were still many organizations hesitating – until recently. Past concerns about security and scalability have been replaced by a cloud-first approach, now ruling supreme in most organizations. Entry points for cloud migration oftentimes include the digitization of supporting documents that finance and treasury departments use in their processes. Paperless procedures bring significant benefits, as organizations can save storage costs, increase the speed of processing, and enable access to digital information across the globe. This played an important role as organizations were forced to lift and shift across global teams during times of lock-downs and reduced workforce. Another entry point is the extension or enhancement of processes using cloud-based services or solu-tions on top of the on-premises core. Adding new cloud-based capabilities became a viable strategy for many organizations during the crisis and beyond, as it provided greater process flexibility. Business in-telligence and artificial intelligence (AI) functionalities also play an increasingly important role in cloud computing, as companies need to process larger volumes of data in a shorter amount of time. Finally, in the remote work setting that we have experienced in 2020 and that is largely continuing to-day, the cloud makes it much easier for companies to get new solutions up and running – without a lengthily implementation and a lot of customization. Intelligent automation – the next level of business process design The year 2020 has been a catalyst for digital transformation and new thinking regarding business process design. Many organizations moved forward on implementing AI-enabled automation, which uses self-learning algorithms. Areas of deployment include the exploration of data connections, helping to identi-fy patterns and unveiling relationships faster than humans. AI also supports users in their daily work by determining and suggesting possible next steps within the business process, based on previous behavior and experience – for instance, during complex approval procedures or exception handling. Furthermore, financial planning and forecasting can be significantly accelerated by AI-powered automation. While some organizations have been working with RPA and other automation techniques for some time to gain more speed and accuracy, especially for structured and rule-based processing tasks, intelligent automa-tion is the next level of business process design. Intelligent document capture technology is one example that has boosted efficiency in finance recently. These solutions that are sufficiently and intelligently automated can read and interpret unstructured data from business documents in various formats – including remittance advices, bank statements, checks, lockboxes, settlement files from payment service providers, debit notes or dispute claims and supplier invoices. As users process these documents, the AI-powered technology constantly learns and builds a virtual library of digital fingerprints.These self-learning capabilities enable the solution to improve the quality of all the captured data automatically. This results in faster processing, including the possibility to self-trigger follow-up activities, depending on the information extracted from the document, and low-er the cost.

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The Digital Transformation of AR: Three Examples Stabilizing and improving cash flow was a top priority within the last twelve months to ensure business continuity. Finance departments in general and the accounts receivable managers played a vital role here. Getting customers to pay faster, collecting debt more efficiently, and applying cash promptly be-came more important than ever. Digital processes in AR helped organizations achieve those results fast-er and thereby improving their working capital. The following three areas of application exemplify how digital AR processes help companies improve their cash position. Touchless payments with digital billing processes Many B2C organizations struggled during the last year to provide their customers with safe payment methods in light of social distancing or offer to bill their products and services online during times of lockdown. At the same time, the payments ecosystem has never been as agile and dynamic as it is today. On one hand, new players such as third-party payment providers and platform companies like Google, Facebook and Amazon are radically reshaping the payments market. On the other hand, the way custom-ers experience the payment process is becoming as important as the transaction itself. They expect or-ganizations to design the payment process around their needs. On top of that, digital and mobile natives expect immediacy – payments must be quick, simple and intuitive. Cloud-based solutions for payment requests offer an easy, fast and frictionless payment experience. Highly automated and completely digi-tal, these payment request solutions pull payment details from accounts receivable systems, package them in a personalized link to customers, and offer online payment options to settle the open invoice in a matter of seconds. They provide real-time status updates, bringing clarity to both the sender and receiver to create an easy and completely digital billing process. Reconciliation of settlement files by payment service providers Customers today expect multiple payment options from the organizations they purchase goods or ser-vices from, enabling them to choose the payment channel that is the best fit for their needs. Payment service providers (PSP) contribute to a customer-friendly buyer journey but processing settlement files from PSPs can result in significant additional work for the accounts receivable teams of the seller. The challenges finance professionals face include the daily processing of settlement files provided by online PSPs in their own specific format. They need to comply with PSP-specific reconciliation rules to identi-fy process chargebacks and cancellations. Digital solutions can help to automate the entire process. The previously mentioned capturing technology can be used to consolidate settlement files from all payment service providers into one processable format for faster payment matching and more working capital. This speeds up the cycling time and eliminates manual errors as the complex and highly manual process of retrieving, converting and reconciling PSP settlement files is automated. Finally, automation helps to improve customer satisfaction, as organizations can offer their customers multiple payment options and an entirely digital payment experience. The result - conducting business becomes easier, translating di-rectly into more sales.

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Cash application Digitizing the allocation of cash can also bring significant benefits for AR departments – and it makes a lot of sense too, due to the repetitive and rule-based nature of cash application. Manual and repetitive tasks can oftentimes be completely automated. This way, organizations can achieve higher application and matching rates in a shorter amount of time. With intelligent automation, using various payment methods does not pose a challenge. Smart solutions can process bank statements, remittance advices, lockbox and settlement files automatically. Organizations can clear unallocated cash and update custom-er accounts first thing in the morning, overcoming delays in cash application. Automation can also help to address lack of visibility, as AR teams are able to monitor important KPIs and gain full transparency of the process. And finally, fragmented and decentralized processes can be overcome by building a standardized and reliable cash application system. Conclusion: Digital AR is here to stay Digital AR is the standard and has been for some time. But COVID has changed the perspective towards digital and remotely operating AR in many finance organizations. While some were already on their dig-ital transformation journey, others saw digitization of AR as a matter of the distant future or were still somewhat skeptical. Even more, this holds true for remote working. But as the circumstances forced fi-nance departments and their leaders to change and adapt, many realized that digital and remote AR man-agement is very possible – and oftentimes even more efficient. And, while digitization improves process-es on-site and remotely, for the latter, powerful solutions are an absolute prerequisite. Finance teams can-not sufficiently work and collaborate remotely without an efficient and solid digital infrastructure. Whether they send out payment requests, reconcile settlement files, collect or apply cash – digital solu-tions are the future of any AR department and many organizations have taken big steps towards this fu-ture within the last year. About the Author Marko Kling, Vice President Solution Architecture, Serrala In this role, Marko is responsible for the pre-sales processes across all Serrala entities and together with his team, he drives the conversations between prospects and clients and Serrala to find the best technical solutions for our customers. Marko joined Serrala initially as a consultant for payments solutions in the beginning of 2008 and has since then taken over extensive responsibilities particularly around O2C and P2P solutions by managing and conducting more than 100 projects and assessments with multiple cus-tomers around the world.

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5 Education

Credit Professionals Alliance has been working hard to provide our clients with the most up-to-date webinars concerning today’s challenges in the credit field. Watch your email for upcoming registration information on all of the following webinars. July 13th: Sales & Credit “It’s A Team Effort” July 15th: Transformation: How to Successfully Shift and Grow Miniseries July 21st: Recent Stimulus Changes to the Bankruptcy Code (Watch-Together Webinar) Be sure to check out our website www.nacskc.com/education.html for additional educational opportunities as these are constantly being updated. Are you looking for Certification and Certificate opportunities? Credit Professionals Alliance can lead you in the right direction, contact Rhonda Ross for additional information at

6 Education

Educational Update: Credit Research Foundation Webinars

July 2021 CRF offers a variety of educational programs: Proctored Courses, On-Demand Courses as well as webinars. August 16-18, 2021: Forum & Expo in Austin, TX October 25-27, 2021: Forum in Ft. Lauderdale, FL It is very simple to participate: Go to http://www.crfonline.org and click on the Education. Now offering a Certificate Program! For additional information go to http://www.crfonline.org/events/current.asp

The following webinars are being offered by NCS Credit to register for these go to: www.ncscredit.com/education-center/webinars July 6, 2021 Webinar: Equipment UCC Filings July 13, 2021 Webinar: Post 2010 Amendments, Article 9 of the Uniform Commercial Code Is Popping Up in Courts July 17, 2021 Webinar: Bond Claims and Public Construction July 27, 2021 Webinar: Understanding the Mechanic’s Lien Process for States With Notices of Non-Payment