Netsend http://netsend.com e-invoicing and e-billing solutions for business Tue, 21 Nov 2017 17:28:32 +0000 en-GB hourly 1 http://netsend.com/wp-content/uploads/2016/10/cropped-Netsend_Stacked_CMYK_square-1-32x32.png Netsend http://netsend.com 32 32 What is Robotic Process Automation (RPA)? http://netsend.com/blog/what-is-robotic-process-automation/ Mon, 20 Nov 2017 16:28:23 +0000 http://netsend.com/?p=3349 A popular question this year has been “What is Robotic Process Automation (RPA)?” and more specifically “What are the benefits of RPA for my business”. The robots are coming.  It’s a fact that businesses need to embrace.  In a typical office, so many day-to-day tasks are completed by following repetitive behaviours, adhering to a strict […]

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A popular question this year has been “What is Robotic Process Automation (RPA)?” and more specifically “What are the benefits of RPA for my business”.

The robots are coming.  It’s a fact that businesses need to embrace.  In a typical office, so many day-to-day tasks are completed by following repetitive behaviours, adhering to a strict set of rules.  How many of us recall the mind-numbing copying, or transcribing, of data from one place to another in our early careers?  As you knew at the time – humans are more valuable than this.

Robotic Process Automation enables businesses to free up staff to focus on valuable problem solving, creative challenges and direct customer or partner interactions – areas where automation simply isn’t possible (at least in this day and age).  Through RPA, tasks that involve repetitive, rules-based, behaviours can be assigned to a robot (typically a software-driven system, rather than an archetypal mechanical robot).

Research by McKinsey & Company indicates that the automation market is likely to be the third most impactful change for businesses over the remainder of the decade (just behind the growth in mobile internet and wireless technologies).  In another report, McKinsey and Company suggest that up to “45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies”.  It’s time to consider not whether RPA is relevant to your business, but how it is relevant.

45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies

What are the benefits of Robotic Process Automation?

    • Accuracy – once programmed, an RPA ‘bot’ will not deviate from the task, copy-pasting is 100% accurate, information is never miskeyed and quality never wanes due to fatigue.
    • Scalability – bringing more bots online to tackle greater volumes of the same process is a simple task of cloning the original bot, no training required. Modifying a bot’s programme to extend their remit can be just a tweak to a few lines of code.  RPA enables businesses to rapidly scale up, or down, without the need to train, hire or restructure employees to meet changing demands.
    • Speed – working at the speed of a machine, bots can process vast amounts of information, far more quickly than a human. With the advent of Artificial Intelligence (AI) and Machine Learning, RPA paves the way for self-refining processes that improve in efficiency and speed as time goes on.
    • Security – when programmed correctly, RPA presents a reliably secure workforce. Gone are the worries of accidental data leakage, malicious acts, or vulnerabilities from the exploitation of human weaknesses.  Security becomes a matter of encryption of data transfers, hardening of firewalls and something that can be outsourced to an RPA partner, rather than an HR concern.
    • Visibility – every action a bot takes can be recorded for review and auditing at a later date. Total transparency and visibility of all activity is achieved through RPA.

How to implement Robotic Process Automation

There are various ways to bring RPA into your business, typically it is advisable to partner with a specialist for automating whichever aspect of your business you wish to focus on.  Some solutions are driven by code level commands, and some use a full abstraction layer that accesses the user interface of your business systems as a human would.

The initial set up of Robotic Process Automation is key to its success.  Taking the time to ensure all eventualities are covered and any outliers or extremes can trigger a manual checking request will save time later.  Where data is transferred between systems, ensure this cannot be intercepted and establish a protocol for handling breaks in communication.

RPA only works when processes can either be digitised, or are inherently electronic in nature.  In addition to this, automation needs to follow rules.  Without complex AI, it’s hard for RPA solutions to handle tasks which require evaluation or judgement of any kind.  RPA is best suited to repetitive, rules-based, tasks, leaving the decision-making process for humans.

Robotic Process Automation and Accounts Receivable

Accounts Receivable is an area of business ideally suited to Robotic Process Automation.  Many businesses underutilise their AR teams, losing time to repetitive tasks that can be automated via RPA.  Automating repetitive tasks frees up AR teams to focus on the areas that require human expertise, such as dealing with anomalies and answering questions.

At Netsend, we have been helping global businesses automate AR processes for over a decade.  We can help you pinpoint the most repetitive AR processes, establish secure and dependable automation routines for these and roll out automation in a scalable manner – even across multiple countries, business units or brands within a parent company.

Our approach requires minimal time and technical support from your IT department, enabling fast deployment based on proven approaches refined over years of experience.  Netsend integrates with existing Accounts Receivable infrastructure directly – removing the need to export or copy data from one system to another.

With Netsend, the output of the automated processes needn’t be restricted to electronic format communications.  If certain customers still require paper-based communications, Netsend offers a centralised print and postage service to deliver each communication at a fraction of your existing cost.

Talk to us today to find out how we do this for businesses all over the world.

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Improve Accounts Receivable Performance through Better Communications http://netsend.com/blog/improve-ar-performance-better-communication/ Mon, 23 Oct 2017 09:49:18 +0000 http://netsend.com/?p=3273 The post Improve Accounts Receivable Performance through Better Communications appeared first on Netsend.

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Improving Accounts Receivable performance can provide a valuable impact on cash flow for any business.  This improvement can be thought of as spanning a number of focus areas, these are:

  • Communications – types, frequency and content
  • Production – systems and tools to create communications
  • Management – reporting, proactivity and escalation processes

We look at each of these here and outline recommendations to review your existing processes and improve AR performance.


Communication tactics to improve AR performance

The communications process in AR is all about striking the right balance between chasing prompt payments and maintaining good customer relations.  Invoices are sent with plenty of notice, and ideally customers pay promptly with no further reminder.

In reality, many customers require a little extra nudge.  Often this takes the form of a statement – outlining invoice details and reminding of the need to pay.  Or a dunning letter, which is typically sent after progressing from polite reminders and direct contact to the need for a firmer demand for payment.

Conventional wisdom is that if an invoice is not paid within an acceptable period, a statement is sent, followed by direct contact and then, if needed, a dunning letter.  However, it is valuable to identify whether a customer has actually seen the initial invoice, or statement, before sending the next communication.  One of the most common excuses for late payment is ‘not having seen the invoice’, but tools exist to reduce the risk of this now (see the later section on managing AR communications).

In the world of digital communications, many businesses are moving over to electronic invoicing as part of an e-billing intuitive.  This presents many benefits to the business, such as improvements in efficiency and accuracy, but increasingly electronic formats are preferred by customers too.

Consider your customers’ needs, do they have automated Accounts Payable systems, or require invoice submittal to a Value Added Network (VAN)?  In such cases, connectors exist to mesh invoicing systems from AR with their customer-side counterparts.  In some cases, customers will prefer to receive communications by email, or even SMS.

There have been countless studies showing how communication preferences have changed from Generation X, to Y, to Z.  Think carefully about your customer demographics, should you be targeting younger customers with SMS, WhatsApp messages, or other channels?  Where is the sweet spot for email communications, and when do you need to fall-back on sending printed letters by post?


Improve AR performance through better production

Once you have mapped out your customer communication needs and preferences, you need the tools to effectively deliver these communications.  Leading e-billing systems, such as Netsend, offer the ability to send communications in a variety of media types, spanning print and post, to email, to EDI and direct integration with AP systems and VANs.

Where possible, invoicing and other AR communications should be automated – flowing directly from accounting systems to reduce the risk of human error in the copy-paste of information.  Outsourcing to an e-billing specialist, such as Netsend, enables the AR team to deliver accurate communications quickly and efficiently, allowing them to focus on more profitable tasks, such as chasing late payments and dealing with anomalies.

In the era of electronic communications, it makes sense to allow customers access to their invoicing archives – through an online portal.  The use of such a portal can also provide a location for customers to self-service requests for reprints, or even pay invoices online with a card.


Managing AR communications to improve performance

Where modern, electronic, solutions are deployed for AR communications, there is an opportunity to use these to record engagement levels.  Forever removing the risk of customers claiming not to have received, or read, an invoice or similar communication.  Through the advent of such tracking, reports can be generated on a regular basis to understand who has indicated intent to pay, or paid, and who hasn’t even engaged to any degree.

Armed with the insight into who is engaging, or expressing intent to pay, AR teams can more effectively organise proactive communications to remind customers to pay, or identify who they need to pick up the phone to.

Given the linear, procedural, nature of AR communications, it’s not hard to see how many steps in the escalation process can be automated – further improving AR efficiency and performance.


Conclusion

A carefully balanced approach is required to ensure the best communications, production and management practices are in place and aligned to deliver optimal AR performance.  Working with an expert partner to outsource aspects of AR processes, such as electronic invoicing and associated communications is one of the most effective ways to achieve this.

 

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How to Solve the Sales vs. Credit Control Battle http://netsend.com/blog/credit-control/how-to-solve-the-sales-vs-credit-control-battle/ Fri, 13 Oct 2017 15:56:44 +0000 http://netsend.com/?p=3262 The post How to Solve the Sales vs. Credit Control Battle appeared first on Netsend.

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It never ceases to amaze me that many squabbling factions can still comprise a successful business.  The case of sales vs. credit control is a classic example of this.

From the perspective of a sales person in a business whose main customers are credit controller departments, I’m privy to a unique perspective on this age-old divide.  In the most successful businesses, these two departments work seamlessly together – two equally valuable sides of the same process.  In businesses where this isn’t the case, there’s room for growth and improvement in efficiency when these departments are drawn together to work more effectively.


The Sales Perspective

As sales teams strive hard to win deals, it’s understandable that frustration is felt if credit control refuse to extend credit to close a deal.  Those who have worked in, or close to, a sales department may have heard inaccurate, but popular, reference to credit control as ‘the risk department’ or ‘order prevention’ at times.

There are many sales people out there who will go to great lengths to avoid involving credit control in the sales process – fearing they will shut down a promising deal, for undue worry about their ability to pay.

But stop and think about it.  If a deal is genuinely at risk of going unpaid, is it worth ‘closing’ anyway?  Credit control have no negative agenda, they are simply watchful to ensure credit isn’t overextended and cashflow is reliable.  So, let’s understand their side of the story…

The Credit Control Perspective 

Where credit control can be accused of being too cautious, the inverse can be true of their view of sales.  Credit control departments have to pick up the fallout from sales committing to working with unreliable clients who may struggle to meet invoice payment deadlines.

There’s a popular saying in credit control departments – “It’s not sold until it’s paid for”.  It’s no good winning the biggest deal, if the money can’t be brought in.  Businesses rely on cashflow, and it’s up to the credit control department to ensure that the money is brought in.

Understandably, it only takes a few bad experiences before credit control departments can be heard referring to members of the sales team as ‘sharks’ who will ‘sign anyone up, regardless of the risk’.

We should pause for thought here too, as how many sales people are educated on risk factors for payment, or encouraged to work collaboratively with credit control to ensure deals are landed that stand the best chance of success?

Reconciliation for Success

Reconciling sales and credit control, through better mutual understanding, and communication, is key to addressing any divide.  It’s common for businesses to focus on improving performance by training and educating within the narrow band of each employee’s designated role.  But great value can be achieved by interdepartmental training – particularly between complimentary departments such as sales and credit control.

Encouraging a tighter working relationship between sales and credit control will ultimately enable the business to chase more profitable business

Consider how much less time would be wasted if sales teams filtered out high-risk opportunities, which would be shut down by credit control anyway, before they progressed things too far.  Encouraging a tighter working relationship between sales and credit control will ultimately enable the business to chase more profitable business, more quickly, and ensure greater reliability in cashflow.  Benefits could also be measured in improvements in DSO or delinquency.

Taking the concept of sales and credit control collaboration further still, credit control could proactively furnish sales teams with information about any existing clients who have an uplift in credit-rating.  This would imply that they are growing, or at least present a lower credit risk.  Sales teams could use this insight to drive higher sales volumes with these clients.

Better Tools, Better Working

Tools such as credit information resources can provide inter-departmental value, as mentioned above, but what other tools exist to improve this working relationship?  At Netsend, we find that some of our clients rely on Netsend to provide deep insight into what is being sold where.  In some cases, detail of specific product sales, in specific locations, is only apparent from invoicing records.  Beyond this, our clients use Netsend to identify late-payers and address these, as well as calculating credit risks based in insight not available to credit information resources.

Sales teams can also benefit from knowing when a customer is facing payment reminders, so they can either hold back from trying to grow a troubled account, or even assist in the communication process to bring the cash in more quickly.

Ultimately sales and credit control are two sides of the same process, and both rely on the overall health of the business (i.e. cashflow) being optimal to ensure ongoing security and growth within their departments.  Working more closely together, and sharing data from appropriate tools and services, leads to a more efficient business and better working environment for all.

 

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Best Practices in O2C Project Management http://netsend.com/blog/best-practice-in-o2c-management/ Mon, 04 Sep 2017 11:40:05 +0000 http://netsend.com/?p=3212 By Chris Caparon, COO at Cforia The consensus directives coming from North American CFOs to their finance and accounting teams include 1) Ensuring business performance by establishing new cost efficiencies, financial plans and analytical approaches and 2) Managing operating risk through risk management strategies and systems. However, the challenge lies in dealing with projected business […]

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By Chris Caparon, COO at Cforia

The consensus directives coming from North American CFOs to their finance and accounting teams include 1) Ensuring business performance by establishing new cost efficiencies, financial plans and analytical approaches and 2) Managing operating risk through risk management strategies and systems.

However, the challenge lies in dealing with projected business changes and the ever-increasing departmental demands with flat or shrinking staff and more complex management requirements, while:

  1. Reducing Days Beyond Term (DBT) and accelerating the conversion of receivables into cash
  2. Mitigating credit risk and portfolio roll-up of global client exposure
  3. Reducing write-offs and diminishing bad debt reserve requirement
  4. Shortening the discover and resolution cycle times of client disputes and deductions
  5. Increasing customer O2C lifecycle satisfaction and making it easier to do business with

So, what are the best practices in order-to-cash project management? To answer the question, we need to look at a compilation of data points, and in this case, the findings have been observed over 14 years and 200 enterprise O2C implementations. These companies are managing over $240 billion in open Accounts Receivable portfolios today.

The top ten O2C areas are:

  1. Accounts Receivable Methodology
  2. Invoice Dispute and Deductions Resolution Handling
  3. Order Hold/Release Decisioning and Processing
  4. Application of Invoice Payments
  5. Lockbox Handling
  6. Generating Reports and Departmental Performance Analytics
  7. Billing Process Methods
  8. Multi-ERP Consolidation & Global Customer Management
  9. Credit Risk Management
  10. O2C Organizational Effectivity

From Paper to Digital

On average, 50-60% of the AR portfolio is being touched within each 30 day O2C cycle. The collections methodology is primarily call-centric, which means that there is little automation within the process. This lack of automation leaves AR departments working off disparate, paper-driven processes.

There tend to be lots of manual filing cabinets with literally thousands of well-used, sometimes decades old file folders. Teams might be working from printed, aged, trial balance sheets and creating collections and resolution notes in the margins of the report. Often there are many other manual, Excel, Access or other non-database driven prioritization of activities, which are not centralised and are specific to the work queue of the individual collector, resolver or credit analyst. With these decentralised, separate workflows in place, collaboration and overall AR visibility is near impossible.

Such environments tend to have little to no hierarchical account aggregation for mid-sized, large, chains and strategic accounts – no way to see the whole exposure of the parent-child portfolio. There are many off-system/manual credit or collections workflows and processes which have little consistency between individual resources, remote locations, or operational disciplines.

A key element to converting receivables to cash are Promise-to-Pay (P2P) reminders, which are located in Lotus Notes, Outlook Calendars, spreadsheet or manual processes. This is a critical success factor to impacting working capital.

There tends to be little ability to separate receivables sub-ledgers to optimise the collections and disputes performance activity and collections/resolutions are “managed to the rule” rather than “managed to the exception”. What this means is that virtually everything needs to be touched, versus segmenting the activity which can be automated to achieve 100% portfolio touched in each 30 day cycle and that there is simply no time to address a large number of small transactions or client accounts.

Observations of Best Practice

Collections environments exhibiting “best practices” are those that can be characterised by the following characteristics:

  • Teams have the ability to automatically segregate the receivables that are at risk based on sophisticated algorithms, taking into account payment behaviour patterns, historical performance, degradation of performance, credit bureau data and trade data which is blended and weighted
  • This optimises collections, dispute resolution and credit resource effectivity based on activity and calling priorities. This needs to be an automated process so that when resources arrive, their day is planned and can be executed in a “best practice” methodology to minimise the time required to identify high-value daily targets and prepare for daily activity

Your team needs near-time visibility into orders and payments to be most effective. VF Corporation reported “Netsend offers VF Corporation complete transparency. We now have the real-time visibility needed to enable proactivity”.

“Through improved efficiency and visibility, Netsend saves us hours every day”
Head of AR, The Guardian

Introduction of AR Portals

Best practice environments use reporting, analytics, dashboards and automated workflows in order to streamline O2C sub-process and critical steps that deliver the biggest working cash impact. This is true of not only resource activity/productivity but of automated communication and electronic calls-to-action to your clients.

Having links embedded in automated email messages, empowered with solutions like client portals, such as Netsend, for 7/24/365 customer self service enables them to access their digital invoice archive, whenever, wherever.

In many (non-best practice) environments, at least 60% of client inbound calls are about invoice queries that could well be instantly resolved through a self-service portal.

Implementing Best Practice in Your Business

Those using AR portals can create custom statements, make disputes, request contact from a resolver or pay bills immediately via a link provided. These types of businesses use a single solution for managing all aspects of AR collections, so they are not constantly flipping between separate systems which contain bits and pieces of the O2C lifecycle.

These AR collections methodology best practices yield on average a ROI of approx. 25% reduction in DSO, approx. 80% reduction of inbound call volumes regarding invoice related issues, approx. 40% improvement in O2C resource productivity and enable significant sale volume growth rates without having to add corresponding headcount.

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PEPPOL Latest: 2017 Progress http://netsend.com/blog/peppol-latest-2017-progress/ Mon, 07 Aug 2017 13:39:07 +0000 http://netsend.com/?p=3145 The post PEPPOL Latest: 2017 Progress appeared first on Netsend.

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As PEPPOL adoption increases across the UK, we thought it’s time for a recap on our ‘What is PEPPOL’ article and a review of recent PEPPOL news and progress in 2017.

PEPPOL stands for Pan-European Public Procurement On-Line, an EDI (electronic data interchange) protocol, designed to simplify the purchase-to-pay process between government bodies and their suppliers.  PEPPOL facilitates electronic ordering, invoicing and shipping between government organisations and private companies.

The need for PEPPOL has arisen from historic inefficiencies and limitations in the way that government bodies procure from their suppliers.  Traditional purchase processes have evolved little over the last few decades, the advent of PEPPOL seeks to shake things up for the better.

PEPPOL is notably the EDI protocol chosen by the National Health Service in the UK (NHS) to achieve efficiency improvement and meet the government initiative of saving £22bn by 2020.

How is PEPPOL growing in 2017?

Membership to OpenPEPPOL continues to grow, with Poland joining at the start of 2017 to become the 200th member.  The Polish government has started building the national services platform (PeF) supporting electronic invoicing for public procurement, with an intention of having a full roll-out by Q3 2018.

In Italy, the Emilia-Romagna Region has achieved significant success enabling the dematerialization of public purchases for the whole procurement cycle, starting from the collection of public requirements and the achievement of digital tenders, to the fully electronic management of orders, dispatch advices and invoices.

The ER region has taken an active role in developing e-procurement standards as part of PEPPOL, since 2008.  From 2014 the regional Health Trusts in Emilia-Romagna have been able to digitally exchange all of their invoices.  Moreover, from June 2016, the same Health Trusts have also been able to send and receive orders and dispatch advices electronically, based on PEPPOL standards. To date, the Regional Telematic Interchange Hub (NoTI-ER) has handled more than 100,000 e-orders, 130,000 e-dispatch advices and 1.8 million e-invoices.  Elsewhere in Europe, nascent PEPPOL projects could do well to look to the ER region in Italy for inspiration and reassurance.

In Belgium, from 1st July, companies have been able to send invoices to federal agencies in electronic format.  Belgium has been working on electronic invoicing since 2013.  In 2017, Fedict (the Federal Public Service for Information and Communication Technology) launched the Belgian electronic invoicing platform.  The biggest challenge in deploying this platform had been the existence of several networks with data in different formats, thankfully this has now been resolved.  The federal body has been working on a platform for the Belgian authorities since 2013. It is now compliant with European standards (OpenPEPPOL). The platform’s name is Mercurius.

Examples of PEPPOL progress in 2017 at UK NHS Trusts

Whilst only a handful of demonstrator sites are leading the charge for full-blown PEPPOL support, progress is encouraging.  Some examples of NHS trusts and what they have achieved to date (July 2017) are listed below:

Derby Teaching Hospitals NHS Foundation Trust

  • All patient wristbands 100% GS1 compliant
  • Scanning of wristbands at 50% of the trust’s Points of Care
  • 100% of trust locations allocated GLNs
  • Over 50% of purchased products listed in new PEPPOL-integrated catalogue
  • Product recall process in place – tracing products to patients in Theatres
  • First PEPPOL order and invoice transmitted
  • Inventory Management System in place, enabling stock review and amendment to match usage information

Leeds Teaching Hospitals NHS Trust

  • Phased introduction of GS1 compliant patient wristbands
  • 100% of trust locations allocated GLNs
  • New PEPPOL-integrated catalogue
  • Product recall process mapped, pending development and deployment

North Tees and Hartlepool NHS Foundation Trust

  • All patient wristbands 100% GS1 compliant
  • 100% of trust locations allocated GLNs
  • New PEPPOL-integrated catalogue
  • Product recall process in place
  • PEPPOL order and invoice process in user acceptance testing

Plymouth Hospitals NHS Trust

  • Wristband printing software is 100% GS1 compliant, scanning is in testing phase
  • 100% of trust locations allocated GLNs
  • Over 35% of purchased products listed in new PEPPOL-integrated catalogue
  • Product recall, Purchase-to-Pay and Inventory Management solutions in development

Royal Cornwall Hospitals NHS Trust

  • All patient wristbands 100% GS1 compliant
  • 6,649 trust locations allocated GLNs
  • Catalogue, product recall, Purchase-to-Pay and Inventory Management solutions in development

What is the easiest way to become PEPPOL compliant?

As with any business decision, the cost-case for investing in PEPPOL needs to present a return on investment as swiftly as possible.  The breadth of requirements for full PEPPOL-compliant eProcurement presents an investment conundrum for NHS trusts and suppliers alike – how to make this investment before budget is available from the savings achieved.

One of the best approaches to this challenge is to deploy PEPPOL-compliant e-invoicing as a first stage.  Both suppliers and NHS trusts stand to make substantial savings through electronic invoicing.  These savings can then be reinvested in the broader requirements of full PEPPOL-compliant eProcurement.

In the context of invoice generation, as opposed to invoice processing, solutions such as Netsend, present an attractive business case.  With a minimal upfront investment, setup costs are offset and become part of operational expenditure.  This equates to a lower barrier to adoption, enabling suppliers to extract competitive advantage and business gain rapidly.

Talk to us today and find out how Netsend is able to support PEPPOL-compliant e-invoicing.  Or you can find more information about PEPPOL in our PEPPOL FAQ Document here.

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Metrics to analyse Accounts Receivable performance http://netsend.com/blog/metrics-accounts-receivable-performance/ Tue, 01 Aug 2017 08:08:10 +0000 http://netsend.com/?p=3060 The post Metrics to analyse Accounts Receivable performance appeared first on Netsend.

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Measurement is the first step towards improving performance.  And measurement is only valuable in this regard if you’re measuring the right things.  Through the deployment of electronic invoicing, we help clients all over the world improve their accounts receivable performance, so we’ve established a clear list of the metrics that matter to determine performance improvement.

Browse the list below and evaluate your accounts receivable performance.  At Netsend, we can show you how significant improvements can be made in all of these important areas.  For instance, how The Guardian reduced their DSO by 2 days – read their case study here.

Days Sales Outstanding (DSO)

Probably one of the most important, and frequently measured, metrics for judging AR performance.  DSO is the length of time it takes to collect the money owed to the business.  Different industries, and different countries, have different average lengths of DSO.  One of the best resources for determining the average your business should be looking to meet, or improve upon, can be found in the quarterly Atradius Reports.

On average, in the UK, DSO is 31 days.  This is significantly better than the average of 44 days DSO across Europe.  With payment terms typically being in the range of 30 days, this equates to an average delay of just 1 day in the UK, but 14 days across Europe.

It’s important to realise that DSO can fluctuate significantly, so is best averaged over a year at least for general performance, or tracked more closely for regular late-payers and a means to chase sooner and shorten their typical delay time.

DSO is best contrasted against best possible DSO, with the goal of driving DSO down to as close to the best possible DSO as you can.  Best possible DSO is calculated as:

Best possible DSO = (current receivables x number of days in invoicing period) / credit sales for period

How to improve DSO?  One of the easiest ways to drive down DSO is to integrate with buyers’ payment systems and encourage automated payment – perhaps incentivising for payment within an acceptable timeframe.  Additionally, tracking invoice receipt and even intention to pay can provide an early indication of which customers’ payments will need to be chased down, and who is likely to pay on time.  At Netsend, our portal provides an easy route to track payments and our connectors provide deep integration with a vast range of payment systems and Value Added Networks (VANs).

Average Days Delinquent (ADD)

The measure of ADD provides insight into how effective AR processes are in collecting receivables on time.  ADD is calculated as:

ADD = DSO – best possible DSO

As mentioned in the section about DSO, above, it is important to use best possible DSO and actual DSO as comparative metrics – ADD provides exactly this measure.  Plotting ADD and DSO visually, over time, can provide an intuitive handle on performance fluctuations.

Collective Effectiveness Index (CEI)

CEI provides insight into how effective AR process are at collecting all outstanding money in a specific period (often one year).  CEI provides a quantitative handle on collections processes, rather than the more qualitative indication from DSO or ADD.

CEI is calculated as a percentage by:

CEI = (beginning receivables + monthly credit sales – ending total receivables) / (beginning receivables + monthly credit sales – ending current receivables) x 100

100% CEI implies a perfect collection process, so AR teams should strive for as close to this as possible.  Ongoing performance measurement should pick up any significant drops in CEI, as these indicate a problem with the collection processes.

CEI and DSO should move in different directions as performance enhancements are made to AR processes, such as e-invoicing or automation.  CEI provides an overall measure of quality of collection processes, rather than DSO or ADD which are measurements of time and reflect broader AR processes.

Accounts Receivable Turnover ratio (ART)

The ART ratio indicates cash flow and liquidity through a measurement of how frequently accounts receivable are turned into cash.  ART is measured over a period of time, typically a year.  ART is calculated as:

ART = net credit sales / average accounts receivable

As any CFO, CEO or senior financial role will be aware, cash flow is extremely important for the health of a business.  Free cash flow determines how much money is left to reward shareholders, or to reinvest for business growth.  Measuring ART keeps tabs on how effectively AR processes are supporting this.

Number of revised invoices

Whilst this isn’t a standard, formal, metric, the number of revised invoices generated over a given period is valuable to track.  This determines the quality of the outgoing invoices and can help identify needs to improve initial invoice quality through automation or better access to information.

And invoice revision that is required adds additional workload to the AR team, and time to the invoicing process.  AR automation is a proven approach to reducing inaccuracies in invoices and flows well into the wider remit of electronic invoicing.

Improving Accounts Receivable performance after measurement

Whichever metrics (hopefully all) you are measuring, you need to think what you intend to do with the learnings.  Determining that your DSO is well beyond your industry average, but without a plan to address this, measurement is meaningless.

Solutions such as electronic invoicing and AR automation present a popular route to addressing AR performance challenges.  The beauty of these solutions is that they support your existing AR team and processes, enabling AR teams to focus on more valuable work that can’t easily be automated or digitised.  The biggest threat to business success is, often, wasted time – at Netsend, our AR solutions improve productivity and enable you to focus on your business.

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Automate tasks so you have more time to do the things you enjoy http://netsend.com/blog/automate-tasks-get-back-time/ Tue, 25 Jul 2017 13:56:04 +0000 http://netsend.com/?p=3045 The post Automate tasks so you have more time to do the things you enjoy appeared first on Netsend.

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Staying late to catch up on work because you’ve spent hours doing tedious, administrative and repetitive tasks?

Cut down on time you spend doing such tasks by delegating it to Netsend. We realise it’s not uncommon to dedicate hours each day to chores like printing, sorting, folding and preparing invoices for post. We’ve seen cases where accounts receivable teams find themselves constantly updating customer details and/or sending historical statements at a customer’s request. What if there was a solution that did that for you so you could leave work on time today?

“Netsend saves us time printing and scanning documents”
– MTV

Our portal provides you with the ability to automate document distribution so gone are the days of manually inputting document data, printing, and sorting them in-house. Your customers are encouraged to log in to the portal to view an archive of their statements or invoices, and if they move office or want to change their delivery option? Well they can do that by simply logging in whenever suits them, instead of making a call to you to print that old invoice they require for their end of month account reconciliations.

The ability to search electronically, rather than leafing through volumes of paper, can save hours of productivity, across a business.

“Through improved invoicing efficiency, accuracy and visibility, Netsend saves us hours every day”
– The Guardian

In our experience, outsourcing your electronic document distribution will save your business on average 7 hours a day.

According to a recent article by the BBC, “psychologists say stress over lack of time causes lower well-being and contributes to anxiety and insomnia.

Yet, they say even the very wealthy are often reluctant to pay people to do the jobs they dislike.” It goes on to explain that this is a global dilemma, “from Germany to the US, people report getting stressed over the daily demands of their time”.

Professor Dunn who has worked with colleagues at Harvard Business School and Maastricht University supports the theory of outsourcing one’s time consuming tasks, “money can in fact buy time. And it buys time effectively. Think about it, is there something you hate doing that fills you with dread and could you pay somebody else to do that for you?”

Speak with us today to see how we can help free up your time so you can do more fulfilling tasks during the day, and as important, leave on time.

 

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The implications of Blockchain technology for e-invoicing and document distribution http://netsend.com/blog/implications-blockchain-technology/ Wed, 19 Jul 2017 09:03:08 +0000 http://netsend.com/?p=2971 The post The implications of Blockchain technology for e-invoicing and document distribution appeared first on Netsend.

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The implications of blockchain technology are far reaching, it presents a paradigm shift in both information sharing and the delocalisation of computational resources.  Whilst most of the headlines pertaining to blockchain chart the massive volatility in cryptocurrency values, that’s a little like talking about the early internet just in terms of cat pictures that were shared on it.

True, blockchain needs a token system (the aforementioned cryptocurrencies) to operate, but once the initial market speculation and volatility around these level out, the underlying technology will have the opportunity to shine for what it really is.

At Netsend, we are most enthusiastic about what blockchain technology looks set to offer.  Such as the capability for shared ledgers.  This takes the verification of transactions to a new level – enhancing trust and improving security.  The persistence of the ‘chain’ in blockchain also enables easy auditing, something we see becoming an increasing requirement in a post-Enron, Sarbanes-Oxley, business world.

Blockchain computation and ‘smart contracts’

Beyond the improvements in visibility that blockchain enables, there is a fascinating computational layer emerging via technologies such as Ethereum.  Due to the shared, decentralised nature of blockchain, programs running on it are extremely hard to censor or interfere with.  So, deploying a ‘smart contract’ program – perhaps set to make a payment to a specific address if certain conditions are met (e.g. the sale of a house) – creates an assurance of payment when those conditions are met.

“Bitcoin is first and foremost a currency; this is one particular application of a blockchain. However, it is far from the only application. To take a past example of a similar situation, e-mail is one particular use of the internet, and for sure helped popularise it, but there are many others.”Dr Gavin Wood, Ethereum Co Founder

It’s easy to see how smart contracts, operating on a blockchain, fit well with the concept of electronic invoicing or e-billing in the wider sense.  Theoretically, the blockchain could be utilised to validate a transaction, deliver an e-invoice and facilitate payment, entirely automatically.

Sharing documents via the blockchain

As more businesses move towards electronic document distribution for a wide range of benefits, it’s not a large step from here to think of documents as being sharable in both directions – enabling collaboration on content.  Typically, collaboration requires the sending of one document back-and-forth, with one person editing it at a time (the others being locked out, to preserve version control).

With a blockchain approach to document distribution, a single document could be worked on collaboratively by a broad range of users – with recorded detail about who made which edits and when.  This may sound familiar, as Google Docs offer a similar capability already.  However, as blockchain becomes more deeply integrated in business processes, it’s likely that this shared, distributed even, approach to documents will become standard.

Blockchain technology removes the need for a ‘master’ document to be held somewhere.  The document can reside in a distributed, decentralised, blockchain network and any edits (changes from the original/master) can be immediately identified and validated – preserving integrity through transparency of changes.

How to leverage blockchain value, without complexity

With any new technology, there is always an adoption curve.  Those businesses embracing technology first often invest large sums of money in research, deployment and then revisions… offset against the competitive edge of being first to offer a new way of working.

At Netsend, we see this a lot with the ever-increasing variety of electronic document formats, especially in the area of e-invoicing.  But this is exactly where we help clients most – we take away the need to understand the complexity.  Netsend acts as an interface layer with a huge number of different EDI, eProcurement and other specialist solutions.  Through our set of connectors, we can quickly translate and deliver documents in the correct format for any recipient.

So too will the need arise for our customers to integrate accounts receivable processes, such as e-invoicing, with blockchain technology.  At this juncture, it makes perfect sense for businesses to outsource their integration challenges to an expert partner, like Netsend.  This enables businesses to focus on their day-to-day activities, whilst the technology partner takes the strain of keeping up to date with the latest protocol changes and technical requirements.

How fast will the blockchain ‘revolution’ be?

As revolutionary as blockchain technology is, it’s not going to dominate the invoicing or document distribution market anytime soon.  Whilst there will be competitive advantage to early adopters being able to offer a blockchain-connected solution, its certain that many of the current electronic channels will remain for some time.

How can we be so certain?  Well, it’s already clear that electronic invoicing offers distinct savings (around €6.40 per invoice by some estimates) over paper, and yet this is only growing at 20% year on year.  It’s human nature to fear change, and change to such business-critical services as invoice distribution takes the longest time to approve.

Document distribution, in the wider sense, is also likely to shift slowly to a blockchain-centric approach, but there will be no overnight revolution, change will be measured in years.

How to prepare for the blockchain revolution

Whilst we wouldn’t recommend investing in a whole new team to identify and implement blockchain solutions just yet, it’s important to prepare for the future.  Talk to us today and find out how Netsend can enable you to support invoicing and document distribution in a vast range of formats and standards, including blockchain when this becomes relevant to your market.

 

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Introduction to Blockchain Technology http://netsend.com/blog/introduction-to-blockchain-technology/ Thu, 13 Jul 2017 08:35:03 +0000 http://netsend.com/?p=2935 Line up to meet the latest centre court champion, Blockchain. Of course, blockchain won’t actually be making an appearance at Wimbledon this year but as a metaphor it’s quite fitting with people placing bets on both. A blockchain is a tamper-proof, shared digital ledger which records transactions in either a public or private network. As […]

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Line up to meet the latest centre court champion, Blockchain. Of course, blockchain won’t actually be making an appearance at Wimbledon this year but as a metaphor it’s quite fitting with people placing bets on both.

A blockchain is a tamper-proof, shared digital ledger which records transactions in either a public or private network. As it’s distributed to all participants in the network, the ledger makes a permanent record as blocks.

Every block that is confirmed and validated are linked and chained from the beginning of the chain to the latest block – giving it the name blockchain.

Each computer on the network is known as a “node”.

How does a blockchain network work?

Instead of relying on a third party, such as a financial institution, to mediate transactions, participants in a blockchain network use a consensus protocol to agree on ledger content, and cryptographic hashes and digital signatures to ensure the integrity of transactions.

Consensus ensures that the shared ledgers are identical, lowering the risk of fraudulent transactions, because tampering would have to occur across many places at exactly the same time. Cryptographic hashes ensure that any alteration to transaction input — even the smallest of changes — results in a different hash value being generated, which indicates potentially compromised transaction input. Digital signatures ensure that transactions originated from senders (signed with private keys) and not imposters.

The peer-to-peer blockchain network prevents any single participant or group of participants from controlling the underlying infrastructure or system. Participants in the network are all equal, adhering to the same protocols.

At its core, the system records the chronological order of transactions with all agreeing to the validity of transactions using the chosen consensus model. The result is transactions that are irreversible and agreed to by all participants in the network.

Public vs private blockchains

Peer-to-peer: Each “peer” has 100% of the data and any updates are shared amongst the peers. This makes each peer more independent and enables them to continue operating even in the event of losing connectivity to the rest of the network. Peer-to-peer is more robust because there is no central server that can be controlled, making closing down the peer-to-peer network more difficult.

Client server: In a typical office environment, data is held on severs so whenever you log in you can access this data. The servers hold all the data, an example is the internet where websites are held on servers.

What are the business benefits of blockchain?

Blockchain can add value if:

  1. Multiple parties share data and need the same visibility of this data
  2. Multiple parties update data and require the changes to be recorded
  3. Participants need to be able to trust the changes that are recorded have been verified as valid
  4. Intermediaries add cost and complexity
  5. Interactions are time sensitive, with these delays increasing costs
  6. Transactions created by participants are dependent on one another

In traditional business networks, all participants maintain their own ledgers with duplication and discrepancies that result in disputes, increased settlement times, and the need for intermediaries with their associated overhead costs.

However, by using blockchain-based shared ledgers, where transactions cannot be changed once validated, businesses can save time and costs while reducing risks. Blockchain technologies promise improved transparency among willing participants, automation, ledger customisation, and improved trust in archiving.

Blockchain consensus mechanisms provide consistent dataset with reduced errors and real-time reference data.

Because no one participating member owns the source of origin for information contained in the shared ledger, blockchain technologies lead to increased trust and integrity in the flow of transaction information among the participants.

Conclusion

Only time will tell how good the predictions are for the blockchain innovation as it rivals alongside the cloud and AI for the, ahem, straight-sets victory.

We can see already that blockchain represents a completely new way of conducting business transactions. Check out our next blog post on the implications of blockchain technology and how it will integrate with accounts receivable.

 

Sources
http://ww2.cfo.com/technology/2017/03/betting-blockchain/
https://en.wikipedia.org/wiki/Blockchain
https://blockgeeks.com/guides/what-is-blockchain-technology/

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Ignoring External Change Risk often proves to be Fatal http://netsend.com/blog/ignoring-external-change/ Wed, 28 Jun 2017 08:39:54 +0000 http://netsend.com/?p=2829 By Ron Wells, Author & Business Risk Management Adviser at T3P LIMITED Lack of corporate Flexibility and Agility in the face of change that is accelerating exponentially amounts to ‘Ignoring External Change’, which is a shortcoming that has already led to the failure of many SMEs and leading companies; two of the latter most mentioned […]

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By Ron Wells, Author & Business Risk Management Adviser at T3P LIMITED

Lack of corporate Flexibility and Agility in the face of change that is accelerating exponentially amounts to ‘Ignoring External Change’, which is a shortcoming that has already led to the failure of many SMEs and leading companies; two of the latter most mentioned being Nokia and Kodak.

An organisation will only become flexible and agile if its leadership;

  • Embraces the need to regularly mentally step outside the corporate environment and consider how its customers could avail of the utility (value) it provides differently,
  • Genuinely listens to its employees, customers and consultants, and
  • Abandons the notion of ‘sacred cows’ so that no aspect of the business is exempt from change.

A Fallen Star

In 2013 Nokia lost its status as the industry leader having fallen in smart-phone ranking to 10, from Number One in 2011.  This led to the sale of its Devices and Services business to Microsoft in April 2014; subsequently Microsoft made 1,350 people jobless in Finland where Nokia had once been the corporate star.

In May 2013, Julian Birkinshaw (Professor of Strategic and International Management at London Business School) published an article in which he analysed the reason why successful companies like Nokia, that are aware of the changes going on around them, own leading-edge technology and employ expert marketers, “nevertheless fail to convert awareness into action”.

Birkinshaw’s conclusion is that such companies lack “the capacity to change in a decisive and committed way.”  He continues:

“The failure of big companies to adapt to changing circumstances is one of the fundamental puzzles in the world of business.  Occasionally, a genuinely ‘disruptive’ technology, such as digital imaging, comes along and wipes out an entire industry.  But usually the sources of failure are more prosaic and avoidable — a failure to implement technologies that have already been developed, an arrogant disregard for changing customer demands, or a complacent attitude towards new competitors.”

Too often (a) ignoring technologies already developed, (b) a disregard for changing customer demands, or (c) complacency in the face of new competitors proves to be the root cause of a ruined business.

Survival of the Fittest

It is clear that the inability to flex an organisation in order to change quickly enough to catch each shift in its market, potentially threatens its survival.  The increasingly potent and very real threat posed by Ignored External Change is a risk that hovers ever present, menacing every business.

Dealing with the dangerous inertia that all too soon becomes the norm in most successful businesses requires the identification of the ‘enemies of agility’.

Birkinshaw identifies five in his article:

  • Ossified management processes
  • Old and narrow metrics
  • A disenfranchised front line
  • Lack of diversity
  • Intolerance of failure

Although these enemies of agility are often identified in the aftermath of the failure of a once successful, seemingly unassailable, enterprise debilitated by its lack of ability to change, the costly lessons taught by such examples as Nokia and Kodak are widely ignored.

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