Digital transformation sales for accounting

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the broadcast is now starting all attendees are in listen only mode hello everyone my name is julian schaefer and i'm the marketing coordinator for swk technologies i'd like to welcome you to our webinar demystifying digital transformation of accounts receivable presented by matt shanahan of lockstep a little housekeeping before we get started everyone has been placed on mute to keep the background noise down however you can submit any questions you have throughout the webinar to submit a question look for the questions section in your go to webinar we will answer all questions at the end of the presentation we are recording this presentation and it will be distributed tomorrow to all attendees as well as to those who registered but we're not able to attend please take a moment at the end of the presentation to answer our one survey question with that said we appreciate you taking time out of your busy day to attend our webinar we're here to help you get the most out of your software solutions and help you find an easier way to run your business by providing you software and industry knowledge tools and support whenever you need it we've invited lockstep here today because they are the industry experts on ar automation so whether you're here doing research for a new solution or you're just here to learn we'd like to encourage you to ask any questions throughout the webinar lastly as a quick reminder swk is constantly sharing important updates and software tips and tricks on our social media channels so we encourage you to follow us on twitter linkedin facebook and subscribe to our youtube channel without further ado i'll hand it over to matt thanks julian and thank you everybody for attending today so as julian indicated my name's matt shanahan i'm the chief strategy officer at lockstep um and in that role one of the things i do is i host roundtable discussions with our customers to listen to what they're saying about the current environment and one of the big discussions that has come up this year is really about digital transformation um and you know people are looking at the situation saying in the age of covet how do i switch from maybe turning off those paper processes and getting much more digital and figuring out how can i improve by adopting digital throughout my entire accounts receivable process and so through those discussions we've developed a whole set of best practices by you know kind of trial and erroring uh with customers to figure out how to best do this before doing that i'll just set some context um lockstep makes a product called anytime collect and it basically helps companies collect cash faster it does that really in five specific ways one is a cloud-based solution so it supports a remote work environment we also automate customer communications around the aging of the invoices so as things come due reminders are sent out or done in any of that kind of information there's a customer self-service component so somebody can go online to a portal and look at their statement make payments those kinds of things so customers are able to go in rather than doing an email or call able to do it right there there's collections activity management so moving out of outlook in personal inboxes and having a shared workspace the teams can work together to you know decide who to follow up with in terms of which customers and which invoices might need a phone call or an email and then forecasting and reporting being able to predict when cash is going to come in or to be able to report on how things are performing operationally we serve a lot of great brands and we have you know kind of key integration so certainly in the sage ecosystem but sage intact sage 100 all of those integrations are cornerstone to what we do so let's get into our topic you know currently cash flow has really bubbled to the top as a priority in a recent deloitte survey they reported a large majority of cfos said one of the most important roles has been managing cash and liquidity and that's really driven by the pandemic you know making sure that you have cash in the door is one of the most important ways to stay in business because the number one reason businesses fail is the cash flow issue but the pandemic has exposed a lot of cash traps and accounts receivable things that slow that cash inflow and those cash traps are creating problems for organizations so they're trying to figure out how do i reduce those gaps in time or the delay associated with cash inflows one of the first ones to think about is just the current state of accounts receivable when you look at the amount of paper for instance that exists in the u.s at least 37 of invoices are sent out as paper um i talked to an analyst last week and they indicated that it's probably closer to 50 so if you think about it if you send a paper invoice you're already slowing down your cash flow because the most likely response from your customer is also going to be a paper check and that paper flowing through the mail is just a very slow process and that's what we think of as a cash strap every single one of those paper invoices is a cash trap so digital transformation is all about how do you eliminate these cash traps and there's three specific things to think about one is you want to eliminate paper the second that i mentioned a little bit earlier is to eliminate personal inboxes so personal inboxes are things that you know as an individual and i'm using outlook i've got my own personal inbox and i'm managing you know ar collections through that and the final one is less apparent is to eliminate attachments and we'll talk about you know all these pdf attachments that are going out in email and how that actually creates a cash trap for you so let's look at each of those phases the first one we'll talk about is to eliminate paper and as i mentioned it's hard to believe that in today's day and age 40 of invoices are still going out as paper because you know quite frankly who wants paper it's expensive you know who wants to spend money on paper filing cabinets envelopes any printers postage and storage one of our customers told us right now one of the biggest problems with paper invoices is with people working remotely their printers aren't fast enough at home so they just can't even print quickly enough and then they run out of ink and it's much more expensive to print at home so remote work has really kind of exposed this cash trap and let's say it's a slow it adds days and weeks to invoice and payment workflow it's more work you know you have to open envelopes find the right folder filing cabinet um you can't have paper and be remote it's really kind of an office anchor when everyone that isn't under the same roof you know it's you can't hand off documents to each other they're hard to scan that all of those things it's really hard to automate so these are all the things that get into paper as being an issue so here's a quick poll question that we'd like to you know put out to the attendees you know what percentage of your invoices are currently sent as paper either zero to ten percent ten to twenty percent uh twenty to 40 um or 40 or more [Music] great we encourage you to contribute we'll give it just a second more all right well thank you so uh there was a there was about 25 that said 10 to 20 um and then there was you know just one respondent said 40 or more so it's interesting to see that you know there's a spread uh it still does exist and you know it's one of the issues to get resolved so one strategy is to really think about replacing paper with email every sort of modern erp will have an ability to email out to an accounts payable department and the power of that is is really clear we just talked about the fact that you can accelerate your dso and lower your cost if we go further into the power of an email address one of the things is a universally unique identifier of the accounts payable department and that's an important aspect you it actually allows you to do things like master data cleanup and some other things to to manage that customer or customer record it's also ubiquitous communication every single ap department every customer in the world has an email address so this is something that is definitely open and easy to access and the third thing is it really gets you to enable automation you know there's a lot of ways you can automatically generate emails you can actually capture those emails automatically process them it's an important you know step in the automation journey so let's look at the second element you know the second thing to look at is eliminate the use of personal inboxes so you can see that 40 of these communications that are going back and forth for invoicing really are happening in email and when we've done polls uh and looked at how that is structured this is the way it looks in most accounting departments today so there will be you know some generic you know address for accounts payable so it might say accounting at company.com or accounts payable a company.com that's usually either a shared inbox or distribution list and what happens then is people take that you know the ap personnel will take it out of the shared inbox and bring it into their own personal inbox right and be able to start working through it that way and they start replying and sending out of their own personal inboxes and the challenge you know when you look at that is you know we'll look at some of those challenges in a second but over 90 of companies we've surveyed run their departments this way so it's a very common practice but the challenges are really this right if you think about personal inboxes or cash drops if a response is sent to a personal inbox the conversation is now going to be stuck in that information black hole if a person's out of the office as a result of that or busy on another project that conversation can stall it's not visible to anybody else on the team right so when we think about that issue it suddenly becomes a bottleneck right and of course because you have multiple personal inboxes that means there's more potential for bottlenecks you have more bottlenecks whether somebody leaves the company and you know the vendor is still you know you're you as a vendor are still sending you know things that way um that means things are going through the cracks right they're dropping through it you know nobody's going to follow up on that because the person who has that inbox is no longer looking at it and all of this can lead to fire drills right so guess what happens something will get escalated because it's stuck in the black hole bottlenecked or lost in a crack at some point it's going to become a fire drill and then now you're reacting this is a typical dynamic and that's because you know these personal inboxes were never designed for the accounting process you know there's no integrate outlook in gmail don't integrate with you know sage there's no automation in them to handle you know mail merging of data into emails or archiving data ing to customer record as we talked about there's no visibility you can't search across all of these and it's certainly not controlled you can't have specific business rules on there driving this um so we'd like to do a poll question you know we talked about the fact that 90 of people are using outlook like to see what you're using okay we'll give it just a second more awesome so yes we're seeing something very similar you know in this case just based on our demographic here it looks like about 78 of people are using either outlook or gmail to do this today so thank you for your participation so one strategy then is to think about how do you replace personal inboxes with a shared workspace um one of the things that a shared workspace should have is this ability to work as a team together right so assigning activities to people so this email gets assigned to you it has tracking and follow-up so that you know what happens you can search across it you can find it and there's automation in there to help you process that email and of course you would want to have activity reporting what's everybody on the team doing and let's look at the third element eliminating attachments as you can see in this in the study 12 of invoices are actually processed through a portal yeah that's a pretty low percentage um and you know the question is how how can you drive more self-service along those lines how can you get more payments done online the reasons self-service portals fail the reason that's so low when we think about adoption one of the big factors is nobody really wants you know another password right so when you when you're using portals a lot of times there's low adoption because it's extra work for your trading partner so your customers see it as you know harder to do than email itself another reason is onboarding can actually be onerous right so somebody's got to register for the for the access they have to wait to be admitted then they have to learn how to use the app those can be very sort of you know difficult things and then there's support overhead your team suddenly is now having to support what customers are doing online and that can be an issue because then it's taking away from other activities they need to be able to do and ultimately you know what's in it for your customers why do why should they see this as valuable um because they'll only use it if they can see that there's clear value for them and that's one of the key things then when you think about this whole issue on attachments self-service can solve problems for both yourself and your customers because attachments are sort of a cash trap for both people for example you know as a when event when you're trying to onboard a customer um you send a pdf and have it has to be filled out and your customer then has to you know attach a w9 or you have to share your w9 and this all creates those form filling attachments and sending back and forth so how can you make that whole experience easier uh what not only for onboarding but things like you know presentment disputes etc take it out of the attachments and re-keen of entry and put it all online and so one of the things to think about is this notion that pdf attachments can be replaced with online forms and those online forums can actually be delivered using what's called the magic link emails with magic links are really powerful because they provide secure access to an online resource like you know like a statement or an ability to pay et cetera but it's like a one-time password so it's secure it's a hyperlink nobody has to remember a password they don't have to set up an account they're able to gain access to the information online rather than having to deal with an attachment so those are the three sort of main ways that you think about transforming your accounts receivable process into a digital experience you know that first step is you know first of all get rid of the paper make an email the second step is to work as a team you know in a collaborative workspace and the third is to replace all those attachments and data entry with online forms that are accessible by your from your for your customers via magic link and then let's talk about that adoption issue right so we mentioned that adoption is critical success factor to digital transformation what we mean by adoption is what's the number percentage of customers that you have that are engaging you online and digitally and then on their usage it doesn't become their preferred channel so they stop emailing you and really focus on leveraging maybe in an online customer self service i mean does that frequency go up because ultimately if you're able to do that you can reduce your vso you can actually increase customer satisfaction i know for me personally i would rather go online and you know get information i need then do an email or make a phone call to get the information i need and if that's happening you're actually reducing your own workload which lets you focus on higher priority things what we do at um at lockstep in terms of our customers is help them on what we call an adoption roadmap there's a process by making adoption happen and it's interesting accounting departments have never had to think about running a marketing campaign but that's ultimately what you need to do in order to drive adoption of digital you need to really think about kind of launching the capability and promoting that and so that's why you know i mentioned that kind of table that that we do with our customers we developed this whole methodology with in conjunction with them to deal with these issues of how you can take you know custom you know your digital experience and then get customers to actually adopt that so in the in the beginning one of the things that you do is really identify your stakeholders figure out your best you know what are the business drivers that are going to make this happen um you actually launch a campaign you know to collect emails that you might be missing you know so those paper invoices probably are missing invoice or missing emails so how do you collect those then you think about kind of getting your staff ready to be able to do this and then launch a promotional campaign after that you really monitor the adoption and think about okay getting feedback from customers what do they like what do they not like and then adjust based on the on the data you get back so measuring baseline um these can be a lot of the business drivers you can you know by driving digital we've talked about the paper cost one organization that we worked with was sending out 4 600 statements per month they would hold a folding party where that 18 people would spend all day folding statements stuffing envelopes putting on postage everything else on 4 600. you can imagine that's a very expensive operation and now they're down to only doing 300 per month as paper the rest has gone digital it's a big impact you can also think about them deflecting those inbound inquiries right so you're freeing up staff time to work on other things um accelerated payments which lowers your dso right so all of these can be critical to what you want to define success as so that's one of the things that that's done is to you know set that baseline up front and then define how you're going to get successful as i mentioned when we go into organizations we typically see anywhere from 30 to 70 percent of the customer email addresses as being unknown or wrong and when i say wrong they have an email address but it's not actually to the accounts payable department it might be to the person who actually bought the you know the the product and so you want to make sure that it's getting directly to the accounts payable department so how do you fix that problem well one of the things that is possible is you can harvest those emails by sending a direct mail to each customer asking them to register online to make that happen um you can actually on this if you're doing paper statements or paper invoices you can have little inserts on each one of those going out so you make a promotional thing to really get people to drive adoption and they can go to an online form they can put in their customer id that's on the invoice or statement and then register their email address we found this to be incredibly effective if you if you tried to collect you know call people up and get their email address on average we were hearing it takes anywhere from you know 30 minutes to an hour per email address you're trying to collect if you have thousands to do it's a daunting if not impossible process this makes it very simple and very easy to do the next is you want to think about you know how do you onboard digitally so any net new customer that you bring on now don't send them a pdf where they then enter all the data into the pdf form that they email back to you that then you have to hand enter into your accounting system you send them a magic link to an onboarding form so rather than pdf it's going to be online where they can fill that profile out and save it and as soon as they save it it's updated into your accounting system and you're ready to go so again it's one of these things where it can save you a ton of time also collect you know key information after there's a tax exemption certificate and when they're done filling that out the thing that happens immediately after that is sharing your w-9 and other associated information with them so they get a link to that information that's always kept up to date then you know we talked about modifying your communications don't have attachments in there anymore have those magic links and buttons that give people access to an online version of what used to be a pdf it's more convenient for them they can have that that full access it creates an archive online that they can always go back to it's a really powerful way that starts to motivate people to say okay i'm just going to use the online forms and then also provide you know magic link access to statements and payments being able to generate a dispute all of that should be able to be done you know immediately online so that's sort of the technology enablement sort of part of it along with that harvesting campaign in addition to that you want to think about promoting broadly the availability of this new digital experience so you want announcement emails to go out think about having an explainer video up you know that sells the benefit why why should you use this um we talked about a statement insert updating corporate voicemails i don't know if you've ever been on hold with it says oh you know if you'd like your question answered faster visit us online same sort of thing of being able to update the greetings inside the accounting department so people think about using that online certainly on the corporate website making sure there's a link there that they can go follow to gain access and then in your email signatures so it's this whole way of getting your customers accustomed to actually going online and you know engaging you that way from there you want we talked about being able to monitor adoption you know so how many how many people came to the you know customer self service today how many people made payments um you know what are your customers doing so i think that's almost google analytics for your digital it's a way that you can see are we getting adoption and then measure how did that impact those business metrics that you wanted to achieve obviously getting feedback is super important so you know you want to figure out what else you might want to do um is this you know what do customers like what do they not like how can you improve it's really easy to to do that through something like a survey monkey and get feedback very quickly so that gave you a sense of you know kind of this adoption roadmap of being able to go from where you are today to having a completely transformed digital experience for accounts receivable with your customers and what we've seen is that you know not only does it include improve the business metrics that you have but it also really makes the relationship with customers much stronger they appreciate the ease of business that you're doing with them and the convenience that it is for them so that's digital transfer transformation demystified three simple pretty simple steps but it has a powerful impact so again you're just replacing paper with email communication then you're replacing those outlook and gmail personal inboxes with a shared workspace that lets teams work together um and and and be able to manage you know the workload and then you're replacing attachments with online access right so you're saying look i'm not going to email you pdf i'm going to give you a link that'll get you to everything you need online and you don't need to use a password to get the business case for digital transformation is compelling we typically show a 10x roi on that that comes from increased cash flow which is working capital freeing up staff time to focus on other things um and ultimately we talked about some of the expense around paper etc so there's a really compelling business case to do that and you know think about starting your digital transformation now yeah certainly contact your swk account manager for more information also uh visit the subuk website for information about anytime collect and certainly go to anytime collect.com for information as well and with that we'll open it up for questions thank you matt we'll now open it up for questions if you have any questions please enter them into the questions section of your go to webinar and we'll give that a minute in case any come through and just remind everyone we do have a subject matter expert here this is a great opportunity to have your questions answered in real time we do have a few that came through during the presentation map first being where do online payments come into play so online as i mentioned all the communications that you send out about invoice presentment invoice reminders etc should go back to that customer self-service portal and in there you would have the ability to pay right through the you know through the portal and you know the power of that is obviously it's much faster than going through the mail so that's great and then the automation i mean you actually get automated cash application typically when you're doing that so there's a lot of benefits through that and and so that's typically what how those all tie together we have another can you quantify some example benefits yeah so as i as i mentioned just i'll use the example uh for that folding party example that company had the 46 4600 statements per month when we did the postage and paper and personnel time that went into it uh that turned out to be seventy thousand dollars of savings just on that alone that and you know this doesn't get into the dso and other things but just on that that piece alone was seventy thousand dollars of savings we have another what digital adoption levels should someone expect it certainly will vary um you know we what we see is sort of the bare minimum bar that you're looking for is at least half your customer base going digital that's that has a significant impact um but you know we we would expect that most organizations end up somewhere between 70 and 90 of their customers being 100 digital and uh and that's in today's day and age because again everybody's dealing with a new normal uh there's much more remote work people realize that paper slows the process down cash flow is important this is not a hard sell anymore um change is happening in accounting and um the pandemic has made that really clear so i think you know those you know 70 to 90 adoption is exactly what we would expect perfect thank you so much matt for your informative presentation for taking the time to be here today for more information on lockstep check out our website at swktek.org and click on anytime collect under the ar automation section in the products tab thank you everyone for attending our webinar have a wonderful rest of your day