Tech's Dirty Little Secret: The A/R Crisis No One's Talking About

Abstract

They innovate and disrupt, but do not see the big picture. There’s a hidden Achilles’ heel for tech companies that may weaken them from ever becoming truly global giants, one that tends to get ignored: Accounts Receivable (A/R) management. This paper presents the dangers of inadequate A/R on an ambitious tech company, whose rapid growth stems from numerous acquisitions. Using an extensive case study, we expose the opportunity cost of subpar A/R, stemming in real-world examples from delayed revenue, increased bad debt and a stunted ability to scale. We present a strategic framework between the transformative power of optimizing A/R, including its alignment to the firm’s credit policy, process and technology. This paper ends with a concise summary of takeaways for tech leaders and financial executives who wish to develop A/R from a liability to an asset, and, ultimately, optimize working capital, reduce risk and propel sustainable growth