We are probably all familiar with the famous quote “Beware the Ides of March” from Shakespeare’s tragedy of 1599 Julius Caesar.
To say that FY20-21 has been a roller-coaster year for CFOs is an understatement. From lockdown to ‘work-from-home’ to ‘restart’ to a potential second wave. We have seen it all.
First few weeks in April 2020, was like ‘this is a temporary phase’ so we were focused on getting the books closed, getting audits done, Board Meetings, AGMs etc on remote basis. Now, it seems this is the new normal.
For Billing and Accounts Receivables teams, there was a bigger challenge. The impact of remote working on day-to-day activities was now reflecting in key metrics. Almost every company saw delayed Order to Cash cycles, as teams struggled to Invoice on time and customers struggled to process those invoices and pay them.
Collections became complicated, dispute resolution became almost non-existent, as there was a significant communication gap between Billing, Sales teams and Customers. Typical ‘Collection Reviews’ started becoming a blame game of ‘who said what’ as there was no credible update due to remote working.
As the cash crisis prolonged, CFOs and CEOs started to focus their attention on High Value Receivables. Consequently, a large number of lower-value receivables have started slipping under the radar. But the cumulative impact of these low-value receivables could easily be 20-25% of total outstanding for most B2B businesses.
Now, as we are within two weeks to close of FY21 on March 31, 2021, a real risk is staring CFOs in the face. Invoices which are unpaid for past several months, will now tip over to next financial year. If customers have not accepted these invoices, there is a high risk that they may dispute as they may not have accrued for them in their books.
Kapittx is an Online Accounts Receivable platform, that enables Digital collaboration between your Billing and Customer facing teams and also with end-customers using smart notifications and one-click Acceptance. This vastly mitigates the risk of having to potentially write-off invoices or the tax loss due to re-invoicing in a new period.
Visit us on https://www.kapittx.com/ to beat the IDES OF MARCH!
Anand Ramachandran, CFO, Kapittx