Conventional deduction usually makes choices based on historical trends by analysing prior performance using specified criteria and organized data.
Contrarily, artificial intelligence (AI) analytics makes use of machine learning algorithms to examine vast amounts of data – many of which are unstructured or semi structured – to find trends, correlations, and insights that might not be obvious using more conventional techniques.
While traditionally Sherlock Holmes using intuition, deduction and logic would have been able to shed light on a theft or felony already committed but he would have trouble correctly predicting future events!
Predictive analytics is where AI analytics shines. It uses machine learning models to anticipate future events based on past data and present trends.
Because of human participation and processing time, traditional analytics procedures may take longer to generate insights and make choices.
AI Analytics enables quicker decision-making and responsiveness to changing circumstances by providing insights and recommendations in real-time or almost real time.
All things considered, AI Analytics offers improved capabilities in terms of automation, predictive capability, scalability, and adaptability to complex data environments, while classical deduction is only useful for events that have already happened.
In the field of Accounts Receivables (AR), AI can significantly enhance AR Management by automating processes, improving accuracy, and providing actionable insights.
Delving into a few areas where AI helps
1. AUTOMATING ROUTINE TASKS
- Invoice Generation and Delivery: AI can automate the creation and distribution of invoices, reducing manual errors and ensuring timely delivery.
- Reminder Notifications: AI can send automated reminders for overdue invoices, helping to improve collection rates.
2. PREDICTIVE ANALYTICS
- Cash Flow Forecasting: AI can analyse historical payment data to predict future cash flows, helping businesses manage liquidity more effectively.
- Credit Risk Assessment: AI can assess the creditworthiness of customers by analysing their payment histories and other relevant data, enabling better credit decisions.
3. ENHANCED DECISION MAKING
- Prioritizing Collections: AI can prioritize which overdue accounts to target based on the likelihood of payment, optimizing the efforts of the collections team.
- Dispute Resolution: AI can help identify and categorize disputes quickly, enabling faster resolution and reducing the impact on cash flow.
4. IMPROVED CUSTOMER EXPERIENCE
- Personalized Communication: AI can tailor communication strategies based on customer behaviour and preferences, improving the effectiveness of collection efforts and maintaining positive customer relationships.
5. DATA INSIGHTS AND REPORTING
- Real Time Reporting: AI can provide real time insights and reports on AR metrics, enabling businesses to monitor performance and make informed decisions.
- Trend Analysis: AI can identify patterns and trends in payment behaviours, helping businesses to anticipate and mitigate potential issues.
PRACTICAL IMPLEMENTATION EXAMPLES:
AI Powered AR Software: Solutions like Inebura leverage AI to automate and optimize AR processes.
Incorporating AI into accounts receivable management can lead to more efficient operations, better cash flow management, and improved customer relations, ultimately enhancing the financial health of the business.
To know more how Inebura leverages AI to optimize the AR Process or to book a demo, write to sandeep@inebura.com