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Engage the AR function as a strategic partner for growth

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Forward-thinking organizations and strategic CFOs are always on the hunt for ways to improve cash flow and optimize the finance function. 

According to a recent Gartner survey, four out of the five top priorities for CFOs in 2023 involved bringing about significant strategic change within the finance function, particularly via new technology and data. These same savvy CFOs also realize the power of the accounts receivable function to future-proof the business. Since AR teams are often the first point of contact for existing customers who have questions, arming them with new technology transforms them into the CFO’s secret weapon. AR then becomes a force that can improve customers’ long-term value and satisfaction. 

Historically, finance has been viewed solely as a back-end department, but as the push for automation spreads across businesses, AR teams are increasingly playing a larger role and serving as a partner for growth.

Improving customer relations and cash flow

In the era of social media, customers can make or break a brand with negative online reviews. It’s critical for business leaders to understand their customers and deliver exceptional service across all touchpoints, from sales to finance. The finance function provides CFOs with a distinct perspective into the customer journey as this department is often the front line for existing customers who may be confused or concerned about a transactional process. Given the right tools, AR staff can provide an enhanced level of understanding that strengthens customer relationships with the ability to solve recurring problems, thereby increasing the chance of repeat business.

Because customer trust must be earned at every turn, a positive experience in the early stages with the sales team can turn negative quickly with mistakes in invoicing. Implementing automated processes can propel the AR team to become the pinnacle of great customer service and drive growth as a result. AR automation applies digital technology to the more repetitive tasks associated with billing, payment collection and reconciliation. Contrary to misconceptions, automation doesn’t replace staff but, instead, encourages employee engagement with higher level activities. Additionally, AR automation not only streamlines internal AR processes, it also improves external customer relationships.

Empowering employees for more strategic tasks

According to research from the Institute of Financial Operations and Leadership, more than two-thirds of finance teams still manually key invoices into ERP accounting software, and 58% spend more than 10 hours a week processing invoices and administering supplier payments. AR teams can get bogged down by mundane and time-consuming tasks that often preoccupy and frustrate employees, such as manually recording data and pursuing outstanding payments. Utilizing automation, finance teams can increase productivity, reduce errors and capture more time for strategic and creative planning. 

Deploying the right technology means your AR team spends less time gathering and correlating information and more time analyzing and predicting data for strategic decision making. They can then use resolution workflows to automatically approve disputes for write-offs and prioritize those that need human intervention. By refining AR processes that free up cash and fortify working capital, CFOs shift to a proactive mindset in managing collections.

Fostering growth across the enterprise with greater visibility

The impact of providing AR staff with automated AR processes goes far beyond the finance function. AR staff can play a significant role in accelerating growth by collaborating with sales, customer service and other departments. For instance, finance teams can share their centralized data on a customer’s payment history to help sales determine which accounts could be more profitable. Another tactic is to embed artificial intelligence in the platform, so trends can be easily identified, making it possible to predict future behavior. These insights help sales make more informed decisions about which accounts to pursue, what types of credit to extend and how to develop pricing.

Likewise, CFOs can tap into this crucial data to develop more accurate cash forecasts. Key performance indicators, such as the percentage of customers who pay late, unreconciled items and monthly write-offs, help CFOs communicate a company’s financial well-being to the C-suite. By using these cash flow data points in strategic meetings, CFOs can provide clear financial context to steer decision making.

Why AR is a CFO’s key partner

The tools needed to convert the finance function into a growth driver are already there, but the mindset must come from the top. CFOs who encourage executive teams to embrace new technologies reimagine the AR function as a key strategic business partner. While it’s difficult to predict what’s in store for the economy over the next year, CFOs can start future-proofing the business by harnessing the power of what has historically been thought of as back office by thinking of this department as a transformative solution that has the capability to nurture and enact a positive customer experience.

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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