Automation in Risk Management for Finance Organizations

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How Can Risk Management Process Automation Help Finance Teams?

Automation in risk management helps CFOs and finance leaders modernize many aspects of finance operations to improve cash flow, boost efficiency, and promote enterprise growth. As leaders are under pressure to get dispersed finance teams working with better speed, coordination, and accuracy, automation helps to achieve a higher level of preparedness that will sustain their companies through disruptive events — now and in the future.

CFOs and finance leaders are increasingly implementing digital technologies and automation. They see value in ongoing digital transformation and investment in better tools to help them reduce time spent on manual finance processes.    

But when it comes to credit and receivables, large and small companies alike face the prospect of reduced cash flow and decelerating growth if they fail to address the main risk factors lurking within their finance processes. Automation in risk management can help finance leaders meet those risks head-on, especially within the credit-to-cash process, where rules-based decisioning capability can enable faster response times while reserving manual resources for exceptions, not routine matters.

Why is automation a desirable goal in finance organizations?

The current economic climate has elevated a variety of risk factors within the credit-to-cash process and exacerbated the need for the key commodities needed to deal with these challenges: control, consistency, and time.

Expanding automation of credit-to-cash risk management can create a range of sizeable benefits that will help finance leaders make faster credit decisions, acquire higher-quality customers, better manage portfolios and payments, and ultimately strengthen the company’s financial health.

Which aspects of the credit-to-cash process would benefit most from successful automation in risk management?

  • Credit Decisioning/Credit Onboarding: Credit decisioning automation software, underpinned by comprehensive, high-quality data, can streamline the tedious and labor-intensive process of performing risk assessments. Credit reviews to happen in minutes instead of hours or days. This makes the sales team happy and gets customer relationships off on the right foot, minimizing the risk of losing a good customer due to slow approval processes.
  • Objective Rules-Based Strategies to Manage Customer Portfolios: Automated systems can monitor for credit profile changes — both positive and negative — and then perform actions, such as real-time alerts or new policy recommendations, based on strategies you create for virtually infinite account management or payment pursuit measures.
  • Electronic Invoice Presentment and Payment (EIPP): Automated systems can enable more flexible payment solutions that are advantageous both to you and your customers, creating a better customer experience and reducing time-to-money. Combining electronic invoicing — or e-invoicing — with the capability for customers to pay you electronically via a payment portal further reduces the risk of slow or no payment.
  • Customer Contact Strategies: Automated customer contact systems allow you to set rules for generating and sending different types of template-based correspondence according to patterns of behavior and whether customers are meeting certain conditions. This relieves the need for human intervention and hours spent reviewing work lists and spreadsheets to arrive at a particular contact strategy for an individual customer.
  • Predictive Cash Forecasting: Automated cash forecasting systems enable rapid collection and analysis of data and trends from receivables, which in turn creates a faster and more reliable view of the future. With faster and more accurate cash forecasting, finance leaders can gain longer-term visibility of the company’s cash levels, allowing them to proactively address liquidity shortfalls before they create real problems for the business.

Download the eBook — Automating Risk Management in Credit-to-Cash: Five Areas with the Greatest Potential Benefits

Managing and minimizing financial risk is a necessary part of finance teams’ overall effort to run efficient credit, receivables and accounting operations. But in today’s digital landscape, companies that still rely on dated systems and manual processes are exacerbating their own risk factors. The inability to do more, and do it faster and more accurately with fewer resources, has high costs that can set the bar for growth and recovery even higher.

Dun & Bradstreet can help, with an AI-driven credit-to-cash platform that helps CFOs reshape their operations, mitigate risk, and reduce cost through insight, automation, and enhanced customer experience.

To learn more about the potential for automated risk management tools to transform credit-to-cash finance processes, read our eBook, Automating Risk Management in Credit-to-Cash: Five Areas with the Greatest Potential Benefits.

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