The world of finance is rapidly evolving, forcing CFOs to confront the dual challenge of maintaining their company's financial health while also navigating an increasingly complex digital landscape. You’ve probably heard lots of noise recently around ChatGPT, an advanced “Generative” AI model hyped for its ability to answer complex questions in a remarkably anthropomorphic style. But many finance professionals have yet to wrap their heads around the power of ChatGPT.
If you’re questioning whether or not Generative AI can actually help finance leaders in their daily operations, you aren’t alone. That said, emerging survey data revealed that more and more finance leaders are indeed exploring AI.
According to a recent poll conducted by Centime, almost half of U.S.-based finance leaders at SMBs are already adopting AI solutions, and another third are considering it. And although the prospect of integrating such a sophisticated tool might seem intimidating, prompting ChatGPT about complex concepts is actually relatively simple if you know what (and how) to ask.
To make it easy for CFOs to experiment with generative AI, we’ve compiled a list of 10 easy-to-use prompts to optimize your accounts receivable processes. Each prompt is designed to help you optimize your financial operations and make more data-driven decisions. Perhaps as important, the questions are designed to help debunk the myth that this very powerful tool is omnipotent, omniscient, sentient, and going to hollow out your finance team before you can utter the word “generative!” Now let’s dive into these ChatGBT prompts for AR teams.
ChatGPT Prompts for Common Accounts Receivable Challenges
CFOs don’t need to be schooled on the strategic imperative and the purpose of accounts receivables. But what do the best performing AR teams do? Which key performance indicators should you track? How does this year’s financial climate affect AR teams? These are the types of tactical and strategic questions that you can ask ChatGPT. Keep reading for a list of common AR challenges, each paired with ChatGPT prompts you can use to address them.
1. Understanding and Prioritizing Collections
Accounts receivable teams often face difficulties managing collections due to the sheer volume of outstanding invoices, varying payment terms, and customer-specific circumstances.
Tracking and following up on overdue payments while maintaining positive customer relationships can be a daunting task. However, AI tools like ChatGPT can greatly assist AR teams by automating routine communications and providing personalized follow-up messages. By harnessing AI to streamline their collections processes, AR teams can focus on high-priority receivables and improve overall efficiency while still maintaining a human touch in their customer interactions.
So which prompts are most helpful for teams to improve their collections? Well first, it’s important to get a basic understanding of how collections affect your overall business performance. Here are a few ChatGPT prompts to get you started:
"Why is it important for a [insert your industry] company to measure Days Sales Outstanding?"
"I am a finance leader at a [insert your industry] business. What is the impact of Days Sales Outstanding on my working capital?"
"What is the difference between Days Sales Outstanding and Accounts Receivable Days? What is the best way for a [insert your industry] business to use each metric?"
Once you understand these concepts, you can move on to looking for specific ways to improve your collections. You can do so by providing ChatGPT with a list of your past due accounts, including due dates and payment terms, then asking it to help you prioritize the most important collections in order to reduce DSO.
"We are a [insert your industry] business with a DSO of [insert your DSO]. Use the following list of past due accounts, including their due dates and payment terms, to prioritize the most important collections in order to reduce our company's DSO."
2. Writing Payment Reminders
Writing payment reminders can start to feel like a never-ending task on your plate. Thankfully, AI tools like ChatGPT can generate personalized reminders at scale, ensuring that each letter is tailored to the specific customer's circumstances and payment history. Here is a ChatGPT prompt you can use to streamline your payment reminder efforts:
"Act as an accounts receivable professional working for a finance team at a [insert your industry] company. Generate 3 payment reminder templates for customers: 1 for when the customer is first sent an invoice; one for when the invoice is 1 week from its due date; and one for the day that the payment is due. Make sure each template lists our current accepted payment methods, including: [insert your current payment methods and details for each]. Leave the invoice # and the due date blank in the template so we can fill in that information later."
By using this prompt, your AR team can expedite its payment reminder generation process, enhance communication with customers, and ultimately improve collection efforts.
3. Generating Multiple Customer Communications
The above prompt works well if you have a few one-off receivables to collect, but oftentimes AR teams have a list of multiple clients with late payments. Between creating invoices and managing customer communications, AR teams can fall behind on other tasks like sending out payment reminders and dunning letters.
Use the following two prompts to quickly generate dunning letters for all your outstanding receivables in one fell swoop.
"Act as an accounts receivable professional working for a finance team at a [insert your industry] company. Suggest a polite yet firm message for a high-value customer with multiple overdue invoices, emphasizing the urgency of payment while maintaining a positive tone."
"Use the following dunning letter template [insert template provided after submitting the above prompt] and list of outstanding payments [insert list of outstanding payments] to generate a batch of personalized dunning letters for all outstanding receivables, ensuring each letter addresses the specific customer's circumstances, includes the outstanding amount, and conveys the urgency of payment while maintaining a professional tone.”
This last prompt instructs ChatGPT to create a list of customized dunning letters in bulk, streamlining the process for you and your team while maintaining a personalized touch for each debtor. Just make sure not to forget to input your dunning letter template and a list of your past due accounts receivables, including due dates and payment terms!
4. Benchmarking Payment Terms
Optimizing payment terms is crucial for accounts receivable teams, as it directly impacts cash flow, working capital, and overall financial stability. The right payment terms also incentivize prompt payments from customers while striking a balance between competitiveness and profitability.
Not sure how your payment terms stack up to your competition? AI tools like ChatGPT can be invaluable in this regard by analyzing industry data and market trends to help finance teams ensure their payment terms are competitive. Finance leaders can utilize ChatGPT with prompts like:
"What are the pros and cons of adjusting our payment terms from [insert original payment terms] to [insert new payment terms]? For context, our company is in the [your industry] industry with a revenue of [insert your annual revenue amount]."
“What are the typical payment terms for businesses in [insert your industry]? How do our current terms measure up in terms of net payment days, discounts offered, and payment options? Our current payment terms are [add in your current payment terms]."
"Suggest optimized payment terms based on market analysis, taking into consideration industry standards and our financial goals. Our current payment terms are [add in your current payment terms, and we are a [insert your industry] company with an annual revenue of [insert your annual revenue amount].”
ChatGPT can be helpful for making small enhancements to your accounts receivable workflow, but its capabilities are limited and its insights should always be taken with a grain of salt. If you’re looking to truly shrink DSOs, streamline collections, and maximize your working capital, check out Centime’s Accounts Receivable Automation solution.
This piece is the first in a series of blogs that will explore the power of ChatGPT in vital finance areas such as accounts receivable (AR), accounts payable (AP), cash management, expense management, and ROI benchmarking. Check back soon for more prompts to improve your finance operations!