Why Finance and Collections Need Their Own CRM - Lessons from Icertis

Every company has a customer relationship management (CRM) system. Sales teams rely on CRM for managing sales interactions and tracking activities. Sales leadership uses CRM to filter leads and to quantify sales performance. Marketing teams need CRMs as the single source of truth for how prospects and customers interact with emails, websites, and social media - even when they attend events. Truth be told, the CRM has become the Swiss Army Knife of managing customer relationships. But traditional CRM has a blind spot - finance activities.

At Icertis, we recognized that finance and collections, in particular, are customer-facing, and we needed a CRM-like system to meet our unique needs. A system that, while connected to Salesforce (our sales and marketing CRM) could pick up the work where that system left off. The reality was, our CRM had all the information sales needed to close a deal but lacked crucial information that would make it easier for us to effectively manage the financial side of customer relationships. Our CRM was excellent for our sales team but lacked out-of-the-box features useful for what we call financial relationship management (FRM).

Traditional CRMs Are Not Built For AR and Collections

The main problem is that traditional CRM systems only capture part of the customer journey. CRMs capture the work and history that went into acquiring a customer. They also capture some of the issues and interactions that happen post-sales with customer success, although often such issues are pushed into other systems, such as service desk or ticketing systems. There are, however, always pieces that remain uncaptured such as key contacts or information embedded in professional service contracts. This information can have financial implications; for example, a professional service contract may contain conditional information that affects payment schedules.

Alternatively, if an organization is aggressive in automatically capturing every bit of customer information, there is information overload with so much in a CRM record. This is overwhelming to the point of being useless. You spend more time separating the wheat from the chaff, inevitably missing key information needed by finance.

For these reasons, the value of traditional CRMs diminishes the moment a deal closes. Our CRM at Icertis was neither capturing nor encouraging the collection of information required to run efficient accounts receivable processes. If we could just improve our cash flow performance by reducing Days Sales Outstanding (DSO) while creating a culture of innovation around cash flow, we would see significant benefits.

The ramifications of the information disconnect in our collections processes also impacted our financial planning. Without a foundation built on good and timely information, our cash flow forecasts led to poor decision-making, as they were outdated before they were even finished.

Finally, it was obvious that interactions with customers around collections are highly sensitive and must be handled delicately. While sales, marketing, and customer success put so much care into optimizing customer experiences, it was ridiculous that collections processes were managed by spreadsheets. It was a recipe for weak collections performance and bad customer experiences that lingered.

There was no obvious fix to our problems at first. Then we stumbled upon Tesorio Accounts Receivable, a solution to automate our collections processes.

Tesorio was the missing piece. It picked up where Salesforce left off, helping us improve free cash flow, customer experiences, and a host of key metrics. We realized that collections was actually a team sport that worked best when finance, sales, customer success, and, yes, collections teams were all involved. By giving us a tool to both capture all finance-relevant customer conversations and to automate key processes, Tesorio became our CRM for finance.

Here’s our journey rolling out Tesorio.

Collecting from Large Enterprises is Hard Without Good Information

First, a little context.

Our Icertis customers are large enterprises. Our points of contact for collections is often an email inbox or an offshore accounts payable team. This puts a premium on capturing the right information in order to collect cash efficiently. Many of our contracts are multi-year too. This can create misaligned incentives between sales and finance to ensure customers pay on time. Consider this: a salesperson receives commission only when the first invoice is accepted but not in subsequent years. That leaves years two and three to finance alone.

For our largest customers, the primary reason for slow payment or delinquency is process error. A PO or invoice may not be properly formatted, confounding automated systems. Unsurprisingly, most emails to the customer’s AP email inbox are ignored by overwhelmed AP teams. If you do get a response, offshore AP teams simply tell you to connect with the business owner. In other words, it pays handsomely to have go-to contacts on record so you can quickly get to the bottom of any mishaps.

Creating a more complete information picture requires inputs from multiple stakeholders. Customer success teams need to make sure that customer health is considered in collections and cash flow forecasting. Sales teams often have the right contacts in finance who can explain why something is delayed.

The key is to put in place a system that captures information in the post-sales process, both automatically and from human interactions.

How We Adapted And Turned Tesorio Into Our Finance CRM

First, we set up connected and transparent processes, allowing everyone to access Tesorio, including sales and customer success teams. The ease of use of Tesorio was crucial; we never had to train anyone on the platform. Unlike most finance systems, Tesorio was intuitive, like the most polished iPhone apps people use daily.

Next, we set a specific, non-negotiable rule. Tesorio was our finance communication system of record. Any interaction with a customer related to finance had to be captured in Tesorio. This is easier than one would expect because Tesorio automatically appends every email sent via Gmail or Outlook to the correct customer record in the Tesorio database. Contents of phone calls or other exchanges are also easily added as notes.

Then we would tag every customer account with the responsible salesperson and customer success team member. Tagging in Tesorio makes it much easier to build robust filters based on any parameter we care about. In fact, tagging has proven to be far simpler than adding a new field in a general CRM, which can be rather disruptive to other teams. Tags aren’t written in stone either. They can be adjusted on the fly as we fine-tune our processes.

The before and after is pretty remarkable. Before Tesorio, our collections efforts were plagued with out-of-date and missing information. AP and collections processes were managed out of Excel spreadsheets, which were painstakingly updated manually. Drilling down on specific accounts to understand what was going on in an account was virtually impossible.

After Tesorio, holistic finance-related information for customers is at our fingertips. We can quickly drill down and answer questions we receive from across the company. Collections teams tag accounts so we can quickly see different slices of our collections picture and ultimately better understand our cash flow position.

Part of what makes Tesorio a success is their two-way integrations with our NetSuite ERP and our Salesforce instance, allowing data to flow freely between these three key systems of record. Which gives all participants in our collections process - sales, AR, and customer success - a holistic view of the collections process in the tools they already use.

Today, we’re realizing the value of our new approach to cash flow performance. For the first 90 days of collections efforts, we follow normal channels for requesting payment. If we see no movement, a coordinated cross-team effort seamlessly kicks into motion, with everyone having the context they need to take action.

Our New Reality With The Entire Team Aligned Around Cash Flow Action

The new systems and processes underpinned a cultural shift to one of shared responsibility for invoice acceptance. Sales and customer success understood they had a role to play in collections. They actually appreciated being included because they wanted to know what was going on with customers. They even began frequently checking their customer records in Tesorio. Teams weren’t simply involved in the periphery, they were committed.

After our experience with Tesorio, I believe that every finance team needs its own financial relationship management system. The old way of spreadsheets, emails, and disjointed communications is out of step with the modern era of Connected Finance and prioritizing customer experience. Just as sales and marketing teams formerly lived in spreadsheets and struggled to create holistic pictures of the status of prospects and campaigns, finance teams today needlessly struggle to create a holistic picture of the post-sales finance and payment process.

Where the sales cycle ends, your financial relationship management system must begin.