Posted by Wayne Brown on 08 Jul 2016
This past May I delivered a presentation called Cash Flow and Your Payment Strategy to an audience of treasury and cash management professionals on the final day of the Windy City Summit Conference. For the past thirty years, financial service professionals from across the country have been traveling to Chicago for 3 ½ days of sessions on liquidity, asset management, risk and compliance, forecasting, and cash flow management. Many attendees are certified cash managers and this conference provides the courses required to maintain their certification.
Surprisingly, my session on Friday morning at 8:30 am was well attended. Usually by the last day of the conference, attendance is lower than the previous days; however, a number of attendees entered the presentation room ready to learn about implementing a payment strategy to deliver cash flow results. So many thoughts were going through my head the morning of the presentation, and there was one thing I failed to plan for: I left my laptop at the hotel. Without my presentation, I had to make some quick decisions about what to do.
I decided to turn what would have been a presentation into an interactive discussion and get input from the audience about the key opportunities and challenges around cash flow management. I asked questions about their jobs, the cash flow strategies employed, their budget processes and procedures followed to solicit help from their organization around the yearly planning and budget process.
Through this interaction, it was obvious that many organizations conduct their annual planning process in silos, with little input across the functional team. I provided some real examples of how some organizations manage their budget reviews by getting all stakeholders in a “virtual room” to ensure everyone is fully aware of both the dollars budgeted and the strategies being employed to achieve their respective goals. Attendees acknowledged the challenges within their organizations and were open to making changes based on our discussion.
The goal of the presentation was to provide cash and treasury managers the objectives to increase revenues, reduce costs, accelerate product development, improve time to market, and increase business agility. The mechanics used to develop a cash flow module was out of the scope of the presentation. The real focus was on helping the attendees gain an understanding of how to build a comprehensive payment strategy. The numbers are important, but failing to implement a strategy to drive the numbers could result in a massive misalignment and increase the risk of missing the budget the following year.
Automation is one key to improving cash flow. A number of companies have implemented digital solutions to accelerate cash flow and automate payments. I presented the audience with several examples of companies that have documented the benefits achieved when their customers migrated from check to digital remittance after implementing an electronic bill presentment and payment (EBPP) solution.
Many healthcare companies have implemented a patient portal solution to capture payments at the point of service or accept payments post service via an online portal. Electronic payment services allow healthcare providers to offer patients multiple payment options that can increase the likelihood of them getting paid for their services post care.
There are many examples of how updates in technology infrastructure can help businesses across various industries accelerate cash flow. Despite the cost to implement, improved payment rates and increased operational efficiencies provide businesses with significant returns on investment over time.
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