Accelerating Cash Inflow: How Process Mining Optimises Your Accounts Receivable (AR) Cycle

Accounts Receivable (AR) + Process Mining

The Accounts Receivable (AR) process – the critical cycle of invoicing customers and collecting payments – directly impacts your organisation's cash flow and financial health. Inefficiencies and delays in this process can lead to increased Days Sales Outstanding (DSO), higher bad debt, and strained customer relationships. To gain a clear understanding of your actual AR operations and drive significant improvements, process mining offers a powerful, data-driven solution.

Imagine having a transparent view of every invoice generated, every payment attempt, every collection activity, and every dispute resolution. Process mining acts as your AR intelligence agent, automatically analysing the digital footprints left in your ERP, CRM, billing systems, and communication logs. This objective insight allows you to move beyond assumptions and target the root causes of delays in getting paid.

Unlocking the AR Bottlenecks: Where Process Mining Provides Clarity

The AR process, while seemingly linear, often involves numerous touch points, departments, and potential friction points. Process mining provides a detailed view of critical stages, including:

  • Are invoices being generated accurately and promptly after goods or services are delivered? Are there delays in the billing cycle?

  • Are invoices being delivered to customers efficiently through their preferred channels? Are there issues with delivery confirmation?

  • Are payment terms clearly communicated and enforced? Are payment reminders being sent out effectively and at the right time?

  • Are collection efforts prioritised effectively based on risk and aging? Are collection teams equipped with the right information?

  • How are customer disputes being logged, investigated, and resolved? Are there recurring reasons for disputes?

  • Are payments being accurately and efficiently applied to the correct invoices? Are there issues with matching payments to open items?

Realising Tangible Benefits: The Real-World Impact of Process Mining in AR

By providing a factual, data-backed understanding of your AR process, process mining empowers you to achieve significant and measurable improvements:

Reduced Days Sales Outstanding (DSO)

Identifying and eliminating bottlenecks in invoicing, collection efforts, and dispute resolution directly accelerates cash inflow and improves your working capital.

Minimised Bad Debt

By understanding patterns in late payments and identifying high-risk customers, process mining enables you to implement proactive measures to reduce bad debt write-offs.

Improved Cash Flow Forecasting

A streamlined and transparent AR process provides more predictable payment patterns, leading to more accurate cash flow forecasting.

Lower Collection Costs

Optimising collection strategies and automating routine tasks reduces the cost associated with chasing outstanding payments.

Enhanced Customer Relationships

Proactive communication, efficient dispute resolution, and accurate billing contribute to a better customer experience and stronger relationships.

Better Visibility & Control

Process mining provides a holistic view of the AR process, enabling finance leaders to gain better control over receivables and identify areas for continuous improvement.

Increased Efficiency and Productivity

Automating repetitive tasks, such as sending reminders and logging collection activities, frees up your AR team to focus on more strategic customer interactions and complex issue resolution.

Improved Compliance

Ensuring adherence to credit policies and collection procedures is facilitated by the transparency offered by process mining.

Supercharging Your Cash Inflow: Transform Accounts Receivable with Process Mining

A healthy Accounts Receivable process is vital for the financial well-being of any organisation. Process mining provides the powerful insights needed to move beyond reactive collection efforts and proactively optimise your AR cycle. By embracing a data-driven approach, you can accelerate cash inflow, reduce bad debt, enhance customer relationships, and ultimately transform your AR function from a cost centre into a strategic driver of financial stability and growth.

Leveraging process mining to optimise your Accounts Receivable cycle typically involves these key steps:

  • Connect your process mining tool to your relevant AR systems (ERP, CRM, billing systems, communication logs).

  • The tool automatically generates visual process maps illustrating the actual flow of your invoicing and collection activities.

  • Analyse the process maps to identify bottlenecks, delays in payment, deviations from your ideal process, and areas of high manual effort.

  • Investigate the underlying reasons for the identified issues, often involving discussions with sales, billing, and collection teams.

  • Based on the insights, design and implement improvements to your AR processes, potentially involving changes to invoicing schedules, collection strategies, or dispute resolution workflows.

  • Pinpoint repetitive, rule-based tasks that are suitable for automation using RPA or platform-native automation capabilities (e.g., automated invoice delivery, payment reminders, logging collection notes).

  • Implement dashboards and reports within the process mining tool to continuously track the performance of your AR process and identify new opportunities for optimisation and accelerated cash inflow.

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