3 ways to improve cash flow with process mining

Let’s face it, the pressure to optimize operations and improve financial performance is higher than ever. And at the same time, it’s harder than ever to deliver the results you need at the pace required.

In 2020, McKinsey announced “a decade of efficiency gains” for Finance departments. In 2023, we are facing the effects of economic uncertainty and inflation exacerbated by a global pandemic, war and global political tensions. And Finance departments realize that their long-term strategic transformations are too slow to maintain a competitive edge. They need results fast, but without disrupting daily operations. 

Enter process mining.

How does process mining work?

Process mining uses the data trails of daily business operations and systems (such as ERP or CRM systems) to create a living, breathing image of the processes in your organization – as they truly run. This includes all deviations, bottlenecks, and hidden value opportunities. And the best part is it works without disrupting your systems. Process mining layers on top of your existing systems, so you get real-time insights without impacting productivity.

From insights to deliberate measures

Seeing your processes is a great first step, but actually unlocking hidden value is what you need. Celonis not only provides you with much needed transparency, but it comes with a plethora of tools and functionalities to take data-driven action. Organizations can leverage alerts, automation, and our pre-built Apps to tackle specific business challenges – for Finance this includes apps such as our Duplicate Checker, Parked & Blocked Invoices, or the Payment Term Checker and automations to remove payment blocks, create invoices, update master data, and many more.

Improving cash flow with process mining

Now, what does that mean for cash flow optimization? There are numerous ways you can leverage process mining across Accounts Receivable, Accounts Payable, Procurement or Order Management and Inventory Management. But let’s focus on the three lowest hanging fruits to capture value fast.

1. Accelerate AR Collections

Using process mining, you can streamline and prioritize your collections based on data-driven insights. Make sure invoices are going out correctly before an invoice comes due; prioritize invoices based on likelihood to pay; and send automated dunning notices to free up your collectors’ time for higher value activities. By identifying opportunities like these and taking targeted, automated action, you can say goodbye to long overdue payments and get that cash flowing in faster.

2. Optimize Payment Terms

Process mining helps you identify the suppliers with the best payment terms and to understand why you don't consistently use the best deals. In Accounts Payable, you can drill down to the material level or to the individual supplier to understand how the commonly used standard terms differ from the best available terms. And track and understand the cases where unfavorable, mismatched or incorrect payment terms are impacting your DPO and set up automations to correct them.  

3. Prevent Early Payments

No need to pay early when you don’t have to, and with process mining the days of early payments are over. Early payments can happen because of payment term mismatches (as above), but very frequently it’s simply an issue of prioritization. Rather than dealing with invoices on a first-in, first-out basis, make sure you pay each invoice at the optimal time, as well as optimizing your payment run schedule to optimize cash flow, and keep control over your organization’s working capital. 

Move the needle on your key Finance objectives with process mining

Of course, there are many more ways process mining enables you to unlock hidden value in your business processes, so that you can drive tangible impact across key Finance objectives at the pace you need. Now it’s up to you to take the next step.

Learn how Neste created around €50M improvement in monthly cash flow in just six months.

Or find out how Celonis can help you to unlock hidden value in your processes to make that cash flow faster, improve working capital, and boost productivity.

Get in touch with an expert about Celonis for Finance Transformation.

Katharina Laumann

Content Marketing Manager

Katharina Laumann is a Content Marketing Manager for Celonis and has been writing about process mining since 2018.