How to improve working capital via finance data automation

one hand handing money to another - Tungsten Network Trade Finance US

Recent survey data from The Hackett Group showed working capital is more tied up than ever before. A typical firm now takes over 60 days to pay suppliers and around 40 days to receive customer payments. Altogether, day sales outstanding figures reached a new height in 2020, with more than $1.2 trillion (USD) owed to those surveyed. 

CFOs must identify ways to improve liquidity as firms are vulnerable no matter their position in a supply chain. Discover how to improve working capital availability by aligning AP and AR systems and the benefits of finance data automation below. 

Three ways CFOs can access working capital more easily


1) Break barriers between departments with supply chain financing

CFOs are left in the dark about the needs of their organisation when accounts receivable and accounts payable systems are fractured and siloed. Without integrating income and spending data, CFOs will struggle to recognise market changes and implement strategic workarounds using existing budgets. 

Organisations that pivot to supply chain financing can open these information channels up while introducing the flexibility needed to manage cash flows effectively at the same time. 

Accounts staff can optimise cash flows by tailoring payment terms with suppliers and customers and ensure capital reserves are protected. Finance teams can also uncover options to improve the organisation’s financial health. For example, CFOs can balance short-term savings from payment discounts versus the revenues generated from other projects, or limit debt and credit risks.

2) Manage transactions more flexibly via finance data automation

Paper invoices were used in around 90% of global transactions in 2019. But businesses can no longer rely on manual processes in 2021. As data-handling expectations change and finance teams continue to work remotely, businesses must find cloud-based solutions that suit new ways of working.

Finance data automation holds the key for CFOs to improve financial reporting and compliance across international supply chains. At the same time, automation can help CFOs decrease payment errors. Businesses can process more invoices with leaner resources and instead focus on supplier retention, data analysis and other strategic priorities that improve operations.

3) Harness the expertise of software partners to optimise new systems

Businesses risk losing revenue as they transition to new systems, which is why it’s vital they work with an expert partner in finance software analytics. Software alone is no guarantee of improved financial health, as it relies on suppliers and customers adjusting to the new digital system successfully.

Expert finance partners like the Tungsten Network offer businesses a more effective way to achieve finance data automation and address their working capital needs earlier. Through collaboration, your business can continue trading with limited interruption and benefit from automated software solutions more readily.

Access and manage working capital needs with more insight

Businesses seeking to improve working capital access stand to gain significantly by aligning their finance data flows. With more insight into market performance and organisational needs, senior management teams can position themselves to hedge risks and generate revenue more flexibly. 

However, current invoicing habits limit any progress at integrating AP and AR systems. Instead, e-invoicing and finance data automation offers businesses more direct routes to improved efficiency and performance. By partnering with expert e-invoicing solution providers, businesses can maintain trading performance without interruption.

Transform your business with a leading finance partner

Ease your transition to the next generation of finance management and meet your organisation’s needs with more insight. Access industry-leading finance software and expertise using Total AR and Total AP from Tungsten Network.

Interested in learning more? 

Get in touch with us today to begin your journey to world-class finance optimisation.

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