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When companies struggle with a pile-up of outstanding invoices, they often suffer from poor cash flow management and strained customer relationships. That’s why accounting departments need to pay close attention to due payments. A key component of maintaining efficient credit policies is a customer aging report. This document provides insight into customer behaviour and supports a phased approach to collecting the total due from your customers while minimizing bad debt. This blog will introduce you to the benefits of a customer aging report and reveal why it’s a good idea to automate it.

What is a customer aging report?

A customer aging report, also referred to as an accounts receivable aging report or receivables aging, shows the outstanding balances from customers sorted by time intervals. These time intervals are called aging periods, so the longer a customer owes an overdue amount the more their balance ‘ages’.

The standard aging periods used in customer aging reports


What is the purpose of a customer aging report?

The customer aging report is one of the main reports used to reconcile the customer ledger with the general ledger. It aids accounting teams in analyzing the efficacy of credit and collection functions and identifying any hiccups in the collection process. Below outlines four of the benefits of using a customer aging report.

1. Develop a better understanding of cash flow

According to a study by U.S. Bank, 82% of all companies fail because of cash flow mismanagement. A large component of maintaining strong financial health is ensuring that your customers pay you on time. Customer aging reports allow you to spot and correct credit risks before your cash flow spirals out of control.

2. Maintain better relationships with customers

In some cases, the reason why you don’t get paid on time is simply that your customer is on a different pay cycle than what your business offers. Customer aging reports help you to identify issues early, so you can act fast to rectify the situation and retain positive relationships with customers.

Whether that ends up being a quick fix, like realigning your invoice date alerting mechanism, or a longer conversation that involves following up on routine customer behaviours, you’ll have the opportunity to improve your collections strategy and customer service.

3. Inform credit policies

Customer aging reports help evaluate the efficacy of your credit policies. If most of your overdue payments result from one customer’s tardiness, you might consider withholding any additional credit.  However, when multiple customers are lagging on their payments, it could indicate that it’s time to audit your processes as there may be an underlying issue with your credit policy. Implementing a discount for early payments or charging fees for late payments are two strategies that may be necessary to streamline cash flow.

Further reading: The ultimate ERP requirements checklist and template

4. Reveal doubtful debts and average collection period

A customer aging report is valuable for calculating your doubtful debt allowance (DDA) and average collection period (ACP). Doubtful debts are balances owed by customers where it’s implausible that you will receive the overdue amount, resulting in bad debt.

The DDA is the acceptable value of bad debts to be written off in your company’s financial statements during the period ends. The ACP is the average number of days it takes for accounts receivable to convert to cash and is one of the main parameters used to determine a company’s short-term liquidity.


4 steps to create a customer aging report

Here is an outline to compile a simplified customer aging report using a spreadsheet:

  1. Create a spreadsheet with all overdue invoices broken down by customer, invoice date, invoice number, original monetary amount, and unpaid balance.
  2. Add a column for each aging period. You can add as many aging periods as needed. If you need a place to start, include the standards intervals: 0–30 days, 31–60 days, 61–90 days, 91+ days.
  3. Group each invoice into an aging period by copying the unpaid balance into the relevant column.
  4. Add subtotals for each customer and a grand total at the bottom of the document.

Example customer aging report

How to calculate doubtful debt allowance

Given that the probability of defaulting increases with the time an invoice has been overdue, leadership can assign incrementally higher fixed default percentages to each aging period. These percentages are often determined by analyzing historical data to see how much was uncollectible during previous aging periods. Applying these percentages to the current value in each aging period and calculating the aggregate returns the expected credit loss, which the accounting department books as the DDA.

Example | DDA calculation for Company A

Using the example above, Company A reviews its customer aging report to calculate its DDA. They have $4,000 of accounts receivables overdue for less than thirty days. Company A usually has high collectability for this aging period and assumes that none of the accounts will be doubtful.

Based on prior experience, the likelihood of default increases by 2% for every additional thirty days the invoice remains outstanding. Company A applies the following formula to determine its allowance for doubtful accounts:

Doubtful debt allowance = (0% x $4,000) + (2% x $7,000) + (4% x $9,000) + (6% x $3,000) = $680 

Therefore, the DDA for Company A is equal to $680.

Calculating the doubtful debt allowance for example

How to calculate average collection period

Calculating the average collection period can help you to evaluate your business’ collectability performance and minimize long overdue receivables. The ACP is the difference between the days sales outstanding (DSO) ratio and the credit period given to your clients.

ACP = DSO – Credit days 

The DSO ratio provides the average period between when a sale is closed, and the client settles the amount. The DSO ratio can be calculated using the following formula:

DSO = (Average receivables / Credit sales) x Days in period 

If the terms vary greatly between customers, you may need to calculate multiple ACPs for each type of contract.


Harness the power of automation to streamline your finances

As your company scales, you’ll require a system that can keep up with your expanding customer database. Investing in an ERP solution will allow you to upgrade from spreadsheets. By automating processes like customer aging reports, you can significantly reduce human errors from manual data entry, time spent on redundant tasks, and overhead to achieve a positive impact on your bottom line. If you would like to learn more about how financial transformation can benefit your business, check out our whitepaper.

Finance leaders playbook CTA | retail expansion


The hospitality industry is currently undergoing a resurgence as more businesses bounce back from international market disruptions and supply chain issues. The global market value is expected to reach $6715.27 billion in 2026 at a compound annual growth rate (CAGR) of 10.2%. Positive projected growth means that businesses are going to require technology and tools now more than ever before.

Financial management software leverages the latest innovations to streamline accounting processes, allowing companies to smoothly navigate common challenges like cost pressures, staffing, and preventing project overruns. But how do you know which solution will work for your business? Which features are necessary across the board for hoteliers, restaurateurs, and travel agencies?

This blog will walk you through seven features you need to prioritize in your next hospitality financial management software upgrade. However, if you’re looking to take your financial transformation one step further, this blog will provide you with the ultimate guide to choosing an enterprise resource planning (ERP) system.


1. Cloud-hosted data management

According to Gartner, by 2024, more than 45% of IT spending will shift to the cloud. This will include financial management and accounting software in many cases, so take advantage of mature software architecture that boasts multitenancy and cloud computing. These advancements allow your company to minimize errors and streamline data management with master records that update in real-time, significantly reducing turnaround during month-end and year-end.


Further reading: Whitepaper | The finance leader’s playbook for financial transformation 


2. Comprehensive reporting capabilities

With data at your fingertips, comprehensive reporting transforms numbers into actionable outcomes. AI-based predictive analytics, dashboards, and rolling forecasts enable you to optimize cash flow, improve financial controls, and assess the overall health of your business. When you’re empowered to make data-driven decisions, your company can benefit from improved agility to quickly adapt to an ever-changing landscape.

3. Flexible billing and pricing management

Tools that support customizable billing options and quick pivots in your pricing strategy are indispensable components of thriving in a rapidly changing industry. Some leading companies are turning to subscription billing options to overcome massive disruptions. If your business is also considering introducing a subscription service, you’ll likely need to experiment with different pricing models and billing frequencies before finding the right fit.


Further reading: Whitepaper | The CFO’s playbook for SaaS transformation 


The complete guide to subscription management

4. Optimized supply chain and inventory requisitions

Manually tending to inventory management can waste valuable time and resources, and full visibility is necessary to overcome global supply disruptions. The right software will facilitate process automation, yielding rapid improvements to order fulfilment, receipt of goods, serial and lot value inputting, batch document delivery, and document consolidation processes.

5. Digitalized lease portfolio

There’s a lot of administrative work involved with managing property, plant, and equipment leases. If you rely on paper-based systems, it will be impossible to scale appropriately. Lease management software can mitigate the risk of several common pitfalls. Digitalizing your lease portfolio prevents lost documentation and helps you keep track of critical dates, so that you never make a late or inaccurate payment.

Complete guide to lease management

6. Enhanced security protocols

Businesses in the hospitality industry often handle sensitive data, sometimes across multiple entities. Therefore, a robust security setup is a non-negotiable feature of your system. Look for software that offers SSL encryption, advanced firewalls, two-factor authentication, and automated notifications for new sign-ins. It’s especially critical that multi-entity companies have a clear organizational structure and can centrally manage security role-based access levels.

7. Industry-specific regulatory compliance

Too often, companies will invent complicated workarounds to try to compensate for a system that can’t keep up with the latest accounting standards. When the average cost of non-compliance is around $15 million, three times higher than compliance, the risk is not worth it. Making it a priority to invest in hospitality financial management software that enables hospitality-specific regulatory compliance can save your accounting department from a financial nightmare and your company from hefty penalties.


Further reading: 


Most hospitality companies are fraught with the challenges of effective financial management in a world where disruption is the new normal. Smooth accounting operations are essential for sustainable growth and scalability in this industry. Those that fail to adopt best practices and tackle the issues with lean, agile solutions are likely to be buried by tedious manual processes and an inability to make strategic moves in a fast-paced, constantly changing world.

Making decisions based on gut feelings is no longer viable. With data becoming increasingly crucial for stakeholders and investors, investments now depend on access to accurate forecasting and reports. Risk management is another motivator for those revamping financial systems. No accounting team wants to stifle the growth of their company, yet, modern compliance standards are increasingly demanding, and there’s a degree of transparency required by regulators that is impossible to maintain with outdated solutions.

Many finance teams are weighed down by manual processes, struggling to consolidate multiple entities, keep up to date with leasing requirements, and spend most administrative time on balance sheets and reporting. Often this work involves a degree of correction that should not be necessary when technology can automate many of the workflows that lead to the most common errors on financial statements and reports. Keeping up administrative workloads often leaves little time for teams to adapt to the subscription economy or implement innovative, competitive strategies.

This blog covers the everyday financial management challenges hospitality faces, with simple solutions suggested for each one. Before you jump in, give your finance function a health check with this simple questionnaire.


1. Maintaining secure, reliable financial data management across all entities


The challenge

Given the sheer amount of financial data flowing through the average hospitality company, it’s no surprise that one of the biggest concerns accounting teams faces is keeping data clean and free of error while maintaining the security of sensitive information. The bigger a franchise or organization, the more complex things can get, with companies needing to adopt systems that can handle the workload of increased intercompany transactions without causing severe bottlenecks.

With data now at the heart of strategic decision-making, the need for effective data management is a critical component of healthy growth. It’s not uncommon for audits or data breaches to slow down productivity for weeks, if not months, a risk most cannot afford to take. Hospitality companies can overcome this financial challenge by introducing several measures to maintain secure, reliable data across all entities and departments.


Suggested solutions


2. Consolidating financial statements accurately across multiple companies


The challenge

Effective financial management in the hospitality industry often requires accounting teams to produce consolidated financial statements that allow leadership to get an overview of overall performance across the entire enterprise. Of course, this ties into the challenge of maintaining reliable and secure data, but it’s a separate concern with its nuances.

Parent company accounting teams often face significant roadblocks when it comes to consolidating financial information. They may not have access to data from all entities, and other groups may forward reports in inappropriate ways (email, excel files, etc.). Not only does this make it challenging to obtain the necessary data, but it can introduce issues of fraud and data manipulation when the parent companies do not have a clear view of financial processes across all entities.

It’s possible to solve this issue by investing in a centralized accounting system specializing in consolidated financial statements. Building a robust financial backbone is essential to sustainable progress when it comes to solving the financial management challenges hospitality faces.

Suggested solutions


common challenges of financial consolidation can be solved with Multi-Entity Management

3. Proving compliance with changing global accounting standards

The challenge

Expectations around data governance and global compliance have never been higher. Most hospitality franchises will be subject to different rules and regulations that govern their accounting practices. Staying on top of fluctuating regulations can strain even the highest performing teams, especially when accounting teams need to maintain compliance for everything from recurring revenue and financial consolidation of multiple entities to lease accounting standards.

It can be a headache, so it’s often best to nominate team members to stay on top of requirements, brief the team on any changes and rewrite data management policies to reflect these when necessary. It’s also wise to invest in a solution built to handle the complexities of modern compliance, so your team can avoid the risk of hefty fines.


Suggested solutions


4. Replacing obsolete, on-premise financial management systems

benefits of financial transformation


The challenge

The struggle to achieve financial transformation is not unique to the hospitality industry. Across the world, companies face the challenge of introducing agile workflows and replacing legacy, on-premise systems with more comprehensive financial management systems. Add to this the rate of failure of the average transformation, and it’s no wonder that accounting teams can be reluctant to undergo the upheaval.

Many issues arise because finance manages the entire transformation in a silo, without any effort made to spread the workload across the whole organization. It’s a process that touches on and involves every corner of operations and will require a company-wide effort. The solutions below include a collection of resources to help you navigate the major shifts and challenges of financial transformation.


Suggested solutions

financial transformation case study Starboard CTA

Expansion is the new normal in the hospitality industry. With constant disruption, it’s not enough to stay afloat. Yet, hotels and restaurants face a demanding and often fickle customer base and challenges such as escalating operations costs, seasonal demand, and high staff turnovers. So how can anyone expect to expand in such an environment? The answer is simple. They can’t unless they build a sustainable financial framework for growth. Start with accounting processes, streamlining operations, and cutting costs so that expansion plans won’t collapse the administrative side.

With the escalation of customer expectations, few industries face more disruption in the coming years. Pandemics, fluctuating economies, and the advent of new technologies contribute to mass shifts in what customers require. There’s now a sizable difference between the average customer’s expectations and what’s on offer from the average hotel, restaurant, or resort. Financial transformation is key to sustainable expansion, yet many in the industry are reluctant to invest.

Many are wary of financial transformation in hospitality. It can be an expensive and time-consuming process with a low success rate. Yet, wide-scale digital transformation begins with the finance department. Sage recently reported that 70% of CFOs are now responsible for technological change. It is no longer an issue confined to the IT department and needs to be discussed at the highest levels of your organization to ensure longevity.

This blog covers a series of best practices and resources that will help you build the financial backbone necessary for success in the shifting world of hospitality.


Below is a list of topics covered. Click your area of interest to skip ahead.

Shifting the focus from expansion to robust financial management

Hospitality faces a significant problem: expand or disappear. Typically, hotels and restaurants will grow in several ways: open new locations, expand to new territories, adopt new ways to deliver services, launch loyalty programs, and create new bespoke services.

5 ways hospitality companies commonly expand

Companies need to implement robust accounting processes that can comfortably sustain future growth to expand sustainably. It’s impossible to accomplish any of your expansion goals without a financial backbone that allows for accurate analysis, reliable forecasting, and timely information. Teams need real-time data to support strategic decisions with insights, analytics, and reliable data.

Beyond this, billing is a core component of an industry that often relies on 24/7 booking capabilities. Customers expect billing to be accurate and immediate for hospitality services and anything less than that is not adequate. Expanding operations without the necessary financial tools can be challenging and result in issues with payments and billings.

Other examples of the problems that might surface include fines for non-compliance, bottlenecks, and inaccurate reports. Problems that end up impacting not only your team’s productivity but also the level of customer service you can provide. Hospitality is an industry defined by service, and stressed-out teams will not be able to meet customer expectations, let alone exceed them. After all, this is an industry where exceeding expectations is the hallmark of a good customer experience.

ERP requirements checklist template and downloadable

Defining financial transformation for hospitality

Financial transformation in hospitality relies on adopting cloud-based technology in tandem with an agile mindset and processes to optimize performance, impact the bottom line, and improve productivity across the organization. It often centers around implementing a comprehensive ERP to help streamline and centralize workflows and allow access to crucial information. Its core functionality should be transforming financial management processes companywide to enable strategic forecasting, and allow for sustainable hospitality expansion.

Benefits of financial transformation for sustainable hospitality expansion

The benefits of financial transformation for hospitality expansion are extensive. Some of the core ones include increased agility, better customer service, automation of time-consuming processes, strengthened data security, simplified compliance, enhanced collaboration, and freedom to innovate and expand.

benefits of financial transformation

7 ways leadership can prepare teams for the shift

In a recent McKinsey Global survey, only 3% of the respondents who had begun a transformation in recent years managed to sustain change. That does not mean transformation is impossible; just that many fail to take the necessary steps to ensure success on a journey that will always start with leadership. Sticking to the following tips should help leadership navigate the challenges:

  1. Prioritize clear, regular communication that includes all major developments
  2. Tie key performance metrics to your financial transformation at all levels
  3. Assess digital maturity and adjust strategic plans to improve upon current capabilities
  4. Adopt an agile mindset to encourage collaboration across your organization
  5. Break the process into small, actionable and achievable portions
  6. Build a custom financial transformation roadmap with room for change
  7. Appoint change ambassadors across various departments to lead the charge


Checklist of best practices for hospitality transformation

Many hospitality companies outsource their financial transformation, allowing consultants to manage the journey. Although these types of advisors are helpful for identifying solutions and helping identify templates for success, a truly successful transformation begins and ends internally. Not only do you need to engage your team at every level of the organization, but you will need to follow the best practices for financial transformation if you want to build a roadmap to successful hospitality expansion.

Many hospitality companies outsource their financial transformation, allowing consultants to manage the journey. Although these types of advisors are helpful for identifying solutions and helping identify templates for success, a truly successful transformation begins and ends internally. Not only do you need to engage your team at every level of the organization, but you will need to follow the best practices for financial transformation if you want to build a roadmap to success.


  1. Establish your position on the digital maturity scale and set goals accordingly
  2. Conduct a thorough audit of your current financial management and workflows
  3. Audit workflows and update data management and security practices and protocols
  4. Educate your team on the financial transformation challenges they will face
  5. Define what success means for your company and set realistic KPIs based on this
  6. Prepare your leadership team to take ownership and drive internal change from day one
  7. Choose a financial transformation framework that meets the demands of your team
  8. Amplify your efforts with a robust internal communications and education campaign
  9. Understand that any major technological change requires a significant cultural change
  10. Invest in scalable financial management solutions that allow for future expansion plans
  11. Focus on cloud-based solutions that integrate fully with your current tools and processes
  12. Shift to an agile mindset and adopt processes that are specific to your industry’s demands
  13. Create meaningful ways to track performance and measure the success of transformation


Digital maturity scale for financial transformation

Partner with technology providers that know the hospitality  industry

Finding the right solution can be tricky when many of the larger hospitality companies do not publicize the software and tools that help them succeed. Still, it’s wise to look for teams and consultants that understand the nuances and demands of the hospitality industry. Relevant recommendations should speak to many of the core challenges you’re facing. Even when non-disclosure agreements mean that a consultant can’t share the name of a company or brand, they will still be able to speak directly to how they can support your growth. It should also be possible for you to speak to those they’ve partnered with before and ask questions. Additionally, if you’re speaking with various consultants, it’s wise to have a list of questions on hand.

Recommended questions for technology providers and consultants


financial transformation case study Starboard CTA


SaaS migration roadmaps vary dramatically between various industries and even companies. Often, these types of financial transformations involve the transition to a recurring revenue business model using SaaS pricing strategies. However, this is not necessarily always the case, and it’s essential to remain flexible when deciding what tactics best suit your organization. Many factors are driving what’s now become an almost universal shift, namely:

Reports state that 65% of companies transitioning to a recurring revenue model face operational challenges. A problem that should not discourage those contemplating the change but instead introduce a degree of caution and encourage an emphasis on strategic planning. The fact remains that those who cannot keep pace with the shift to a more agile mindset will inevitably become obsolete.

This blog steers clear of a one-size-fits-all template and sets out a list of best practices to help you build a custom roadmap that covers the nuances of your solutions and best fits your industry. Whether you’re a software company looking to break down legacy software into tiered microservices or a retailer experimenting with moving towards the subscription economy, these considerations will help you navigate the common challenges that impact the success of such transitions.

1. Assess the pros and cons of SaaS migration before you get started

When it comes to any significant shift, you need to be fully aware of all the advantages and disadvantages. It’s easy to focus on the pros, but such two-dimensional thinking fails to prepare your team for the likely challenges ahead. In fully understanding what might occur, you can better align your teams to handle the transition without having them lose confidence at the first hurdle. Internal advocacy is a powerful component of successful SaaS migrations and can be hard to achieve if you do not take the time to prepare teams adequately. Get started with this blog on the pros and cons of SaaS migration.

2. Consider the SaaS migration model that works best for your customers

Not all migrations will be the same, so it’s no surprise that there are several different approaches to shifting your products and services over to SaaS. The model that fits best will depend on your solutions and your customers. One of the central challenges of any transition is retaining customers as you change, which means considering their experience at every stage of the journey. None of the following migration models are mutually exclusive, and companies often choose to adopt a hybrid version, particularly in the early stages of migration.

Common SaaS migration models

3 most common saas migration models

1. Silo migration model or single-tenant model

One of the most common SaaS migration models allows users (tenants) a dedicated server or infrastructure for your product or service. At its most fundamental level, this model means there’s no requirement for refactoring your product, and it essentially remains the same. From the end-user perspective, this may be the least disruptive, allowing the continuation of customized versions of your product. However, this may not be the best long-term solution when it comes to economies of scale.

2. Layered migration model

A layered migration model involves moving your solution to the cloud in layers. With this approach, companies can start small and slowly move to a multi-tenant model, one service or component at a time. Similarly, they can remain in a single-tenant model, slowly moving customers to the cloud.

3. Data migration model

Often this is a hybrid model for SaaS migration that combines both single-tenant and multi-tenant migration strategies. For instance, data management might move to a multi-tenant cloud-based architecture for security reasons, but the rest of your solution might remain single-tenant.

3. Conduct customer surveys and market research before deciding on pricing models

One of the most significant shifts for any organization will be managing customer expectations and conducting thorough market research to back up any changes you feel you need to make to products or services. Without customer buy-in, it will be challenging to build on your current reputation, so it’s essential to keep existing users informed and make them part of the process. Some of the areas where customers can be most insightful are market-facing elements—for instance, worried about choosing the right subscription strategy? Not sure which pricing model best suits your market?  Want to test run some pricing psychology tactics? Don’t just depend on competitor insights. Your customers will be able to offer just as much guidance in areas that impact them directly.

4. Establish new KPIs to measure success and forecast profitability better

If you’re moving away from the traditional license and maintenance model, it stands that how you measure success will also have to shift. For one, most companies that undergo SaaS migration no longer receive upfront payments and rather receive and recognize revenue as it’s earned. This means that it will be harder to calculate profitability as initial sales will not earn as much as the Lifetime Value (LTV) of the customer.

Adjusting KPIs won’t just be restricted to sales and marketing, they will need to be changed to reflect the changes in every department. You will need to work with each department to figure out what success will look like based on new performance metrics. One place to start will be to closely monitor subscriber churn metrics and your customer acquisition and retention metrics.

5. Prioritize change management to enable the internal shift

Thinking of your SaaS migration as more than just a technological shift will be essential. This change impacts every aspect of your business and is much a cultural and financial transformation as anything else. Transitions like this start with leadership and require you to fully understand the digital maturity of your company before you can move forward.

Digital maturity scale for financial transformation

Investing in communications at every level will make it possible to tackle challenges as they arise and ensure that the transition doesn’t adversely impact employee retention. You will need your best people on board to manage this change and sizable investments in your customer success support staff. Get started by reading this blog on the core challenges companies face during financial transformations.

6. Invest in SaaS tools and automation to help you scale

When it comes to SaaSifying products and services, companies need to invest in tools that will help them automate manual processes at every level of the organization. Implementing a cloud-based CRM and subscription billing software will help you manage the complexity of high growth cycles.

Your team will be able to handle a more significant workload effortlessly. You will also understand some of the nuances your customers will face when migrating to your SaaS solution. For instance, what level of customer care seems appropriate? What parts of the process require the most communication? You can use your own experiences to help build these benchmarks.

Plan for automation wherever possible. Even if you need to wait to implement some of the tactics later in the process, that doesn’t mean you should sideline planning each strategic step. It’s possible to introduce phases that will help you systematically move to the cloud. It is wise to consult each department to find out where bottlenecks exist and alleviate the pressure in these areas. Get started with our guide to financial transformation resources for SaaS leaders.

7. Prioritize integration when developing SaaS solutions

Despite the recent growth of SaaS apps, not all of them integrate easily with other solutions. This lack of integrated options is an inconvenience and a deterrent as markets become more saturated. Suppose the difference between you and a competitor is that one of you integrates easily with current workflows and software. The solution that fails to integrate is likely to miss out on potential customers.

Being mindful of the demand for specialized apps that fully integrate with speed and ease will set you apart from many of your competitors. For instance, you may want to consider the compatibility of your tools with major CRMs or ERPs before you make the move. Even if you cannot promise integration right off the bat, it’s something to build towards for your development team.

financial transformation case study Starboard CTA

Software as a service (SaaS) solutions are often the nucleus of a company’s modernization journey, but what about providers? How can they ensure that their own financial infrastructure is up to date and aligned with their company goals? The following resources have been hand-selected for leaders that are considering or currently managing a financial transformation. Below, you will find blogs, booklets, case studies, whitepapers, videos and more!


Skip to a specific aspect of thought leadership on financial transformation: 

1. Keeping up with trends in financial transformation
2. Key metrics to analyze your finance function
3. Choosing which tools and technology to adopt
4. Staying on top of security and compliance
5. Best practices for implementing financial transformation


1. Keeping up with trends in financial transformation

In today’s world, remaining relevant in the software industry is tantamount to ensuring your organization is digitally mature. With the constant influx of new players into an already saturated market, providers must exceed customer expectations and keep up with modern technologies. By following the trends in financial transformation, leaders can keep a finger on the pulse of the industry and better position their company for success.


Resources on trends in financial transformation: 

Finance leaders playbook CTA | retail expansion

2. Key metrics to analyze your finance function

How do you know when the time is right for financial transformation? While there isn’t a definitive answer to this question, there is an effective place to start. By routinely analyzing key metrics and your company’s performance, you can keep track of whether the finance function is in harmony with the overall business goals. If there is a misalignment, it would be a sound decision to investigate what a financial transformation could look like for your company. The following resources will help you develop a set of performance metrics and questions to ask, so you can monitor the health of your finance function.


Discover how to analyze your SaaS company’s performance: 

3. Choosing which tools and technology to adopt

Choosing the right tools and technology to fulfil your business requirements and provide your company with essential industry features is a huge undertaking. If you embrace a new system, it will transform the role of your finance department and likely sustain your organization for at least a decade. It’s not a decision that should be rushed. The following resources will kick-start your research and enable you to make a wise investment.


Learn how to pick software that will successfully modernize your business: 


financial transformation pillar page CTA

4. Staying on top of security and compliance

Accounting standards and regulations are constantly evolving to keep pace with the breakneck speed of innovation in the software industry. SaaS companies must adapt their processes to maintain compliance and enhance data security. This is especially true if your organization handles personally identifiable information (PII) or personal health information (PHI). The following resources will introduce you to methods for protecting your data and provide you with an overview of relevant accounting standards for SaaS companies.


Don’t be caught off guard. Find out how to bolster your security and maintain compliance: 


5. Best practices for implementing financial transformation

More and more companies are undergoing financial transformation, but not all of them result in a successful modernization. Without a clear goal and action plan, teams may be distracted by irrelevant benchmarks or paralyzed by an ever-growing list of available add-ons. These resources will help SaaS leaders build a roadmap to circumvent common pitfalls and implement effective initiatives to achieve their targets.


Avoid silly mistakes with these best practices for implementing a financial transformation: 

MoxiWorks saves 80 days annually

Like any other form of payment, recurring billing has its own unique challenges. Subscription services lose roughly 2% of customers each month due to expired credit cards that aren’t updated. When you start to factor in failed payments caused by spending limits, insufficient funds, payment gateway glitches, or cancelled credit cards the involuntary churn rate accounts for a sizable revenue leak.

Dunning is the process of communicating with customers to recoup such losses. Despite a negative public perception, modern dunning management can contribute to a positive customer experience and significantly increase your monthly recurring revenue (MRR).

Whether you’re implementing a SaaS billing model for the first time or simply trying to ramp up your monthly or annual recurring payments, effective dunning management will be central to your success. This blog answers some of the most frequently asked questions about dunning, so you can master the process to mitigate revenue leakage and involuntary churn.

Skip ahead to a specific section on dunning management by clicking on the topic below. 

What is dunning?

It’s normal for businesses to encounter a failed payment at some point. Whether it’s due to insufficient funds, a misconfigured payment gateway, or an expired credit card, you will need a way to recoup your monthly recurring revenue (MRR). Dunning is the practice of communicating with customers to recover lost revenue from failed payments and reduce involuntary subscriber churn.

Although the term “dunning” is still used in accounting, people who work in other departments might explain the same concept using terms like “accounts receivable” or “collections process” instead. For instance, dunning management can be found under the credit and collections feature and optimized with collections process automation for Microsoft Dynamics 365 solutions.


What is a dunning letter?

A dunning letter, or collection letter, is the collection notice sent to customers informing them that their last payment has not gone through. Modern subscription businesses rarely contact their subscribers via paper letters, opting instead for digital communication methods like email, SMS, or app notifications.

There are many templates and programs online that can help you generate a dunning letter. Here’s a helpful guide to walk you through creating a collection letter through the accounts receivable feature in Microsoft Dynamics 365.

What is the difference between voluntary and involuntary churn?

Voluntary or active churn results from customers making the conscious decision to unsubscribe from your service. Typically, the subscription is cancelled because the service no longer fulfils the customer’s wants or needs.

Involuntary or passive churn occurs when a customer’s subscription is cancelled because something is stopping them from paying. This type of churn accounts for a sizable portion of preventable revenue leakage because the customers often don’t want to unsubscribe—they just aren’t presented with a clear option to fix their payment issue.

What is involuntary churn?

Why do SaaS companies need dunning management?

Subscriber churn is an unavoidable obstacle that every SaaS business must handle. Fortunately, effective dunning protocols can recover on average 9% of your MRR. Dunning management empowers you to proactively reach out to customers to update their payment method, prevent service disruptions, and facilitate an overall positive customer experience—reducing revenue lost through involuntary churn.

What is pre-dunning?

Pre-dunning is the practice of sending reminders to customers that an upcoming payment may fail unless they update their information. There has been an open debate about whether customers perceive this tactic as helpful or annoying.

Pre-dunning used to be a best practice, but in recent years it has started to fall by the wayside as subscription businesses have become more popular and there are more options for preventing failed payments behind the scenes. For example, some SaaS companies may communicate directly with issuing banks to automatically update customers’ credit card information.

When is pre-dunning appropriate?

When is pre-dunning appropriate?

Nevertheless, there are still a few scenarios where pre-dunning may be appropriate for your business. It has shown to be effective in the following three circumstances:

1. The customer’s credit card is going to expire

According to the Subscription Commerce Conversion Index, the average subscriber holds five different retail subscriptions. It’s safe to say that your customers may struggle to keep track of all their subscriptions and need a reminder to update their payment details. A best practice is to remind them 30 days before and, if they haven’t taken any subsequent action, 7 days before their card expires.

2. The billing cycle is bi-annual, annual, or longer

Oftentimes, the longer the duration between payments, the higher the risk of it failing. Businesses that offer billing cycles with bi-annual, annual, or longer options may benefit from pre-dunning to ensure that the customer’s payment method and details are still accurate.

3. The first payment after a free trial ends

Whether or not your business collects billing information during sign-up, it’s a good idea to establish transparency early in your relationship with the customer. A quick reminder that states when the free trial will end, the amount you will start charging, and the due date for the first payment will help avoid angry customers that simply forgot to cancel their subscription on time.

What is automated dunning management?

Manually addressing every customer’s declined or failed payments is an impossible task that would waste valuable time and resources. The only worse solution would be to not contact your customers at all. Automated dunning management (a.k.a. collections process automation) streamlines the process by performing actions like:


How does automated dunning management reduce involuntary churn?

In addition to saving your accounting team hours combing through accounts and drafting dunning letters, automated dunning management counteracts involuntary churn by contributing to a positive customer experience. Below covers the top three features that benefit subscribers.

How does automated dunning management reduce involuntary churn?

1. Automatic retries for failed payments

Subscription services have gained a reputation offering peak convenience, but when a payment fails, customers may become frustrated and churn for a few reasons:

Automatic retries with a customizable schedule can address all these concerns and minimize unpleasantness by reducing the frequency and degree to which the subscriber needs to get involved. Fewer barriers to paying for services means more happy customers.

2. Professional and friendly customer communication

Manually drafting dunning letters for every customer with a failed payment is not only a time-consuming process, but also is prone to error. Sending a collection notification riddled with typos or mixing up which past due invoice email to send to which subscriber can make your business look unprofessional. Automated dunning management organizes customer communications to facilitate enhance customer relations. Some solutions can even make the reminders more friendly by adding personalized touches like the customer’s or business’ name.

3. Records of state of accounts

A statement of accounts and accounts receivable aging information is indispensable for assessing the financial health of your customers. Without this data, it’s much harder to strategize feasible methods for decreasing outstanding payments and mitigating bad debt. Automated dunning management generates accurate customer aging reports that provide insights like the number of failed payments, renewed subscriptions, upgrades, and suspended accounts.

Complete guide to subscription management

Binary Stream and SignUp Software join forces to bring innovative Microsoft Dynamics solutions to the global market. By integrating technologies and committing to joint research and development, they will continue to strategically enhance solutions across Dynamics 365 for both Business Central (D365 BC) and Finance and Operations (D365 F&O).

Olof Hedin, CEO of SignUp Software, sees the partnership as a step toward realizing value to existing customers and expanding reach across the Dynamics 365 community.

“We are excited for the opportunity to enrich our customers’ experience. But the most important part for us is that by working with Binary Stream, we know we can reach and help more customers across Microsoft’s flagship ERP lines.”

Binary Stream’s solutions Multi-Entity Management (MEM) for D365 BC and Subscription Billing Suite (SBS) for D365 BC and D365 F&O will be able to interface with SignUp Software’s solution ExFlow, an accounts payable (AP) automation solution featuring scanning and data capture, intelligent pre-coding, invoice matching, invoice approval workflow, and follow up analytics.

The companies will bridge their solutions by opening up their application programming interfaces (APIs) to each other. Other Dynamics 365 partners that choose to support these installations will benefit from reduced complexity and integration time for their customers.

“It’s a win-win for everyone involved. Customers will be able to use our solutions and streamline accounting processes faster than ever before. Our collective goal is to achieve seamless implementation, enable smooth application to application communication, and ultimately empower our users to optimize their AP process,” says Lak Chahal, CEO, Binary Stream.

This alliance brings two of Microsoft’s leading global ISVs together in a Partner-Partner (P-P) model that showcases the importance of connecting APIs so that our community can continue to thrive and grow its international footprint.

“We’re motivated to lead by example and demonstrate how strong partner alliances benefit Microsoft’s ecosystem,” says Michael Medipor, CEO and President, SignUp Software North America.


For more information on SignUp Software, contact: 

Michael Medipor, SignUp CEO—North America | and Olof Hedin, SignUp CEO—Global Group |

SignUp Software (NASDAQ: SIGNUP) was founded in 1999 and launched ExFlow AP Automation in 2003. Fueled by an entrepreneurial mindset, SignUp Software is a global forerunner of financial and accounts payable process automation on Microsoft Dynamics 365 platforms. SignUp currently operates out of Stockholm, Sweden (HQ), North America, Denmark, the Netherlands, and Australia and has approximately 100+ employees across the globe.

Retailers face an exponential amount of change and will continue to do so for the foreseeable future. The Big Shift is a term often recycled and repurposed to fit any innovations or changes in the retail industry. Originally it was coined to refer to economic transformation caused by exponential improvements to the cost and performance of digital infrastructure, alongside the liberalization of public policy—leading to constant disruption and shifts in the balance of power between businesses and their customers.

The Big Shift effectively means that companies face the pressure of increased competition, and consumers gain the advantages of knowledge sharing and transparency. It points to a democratization of the retail landscape, robbing retail giants of market ubiquity and creating niches within markets.

Just as technological advancements have come under this label, so have responses to the climate crisis and customer care. Anything which disrupts business-as-usual is part of The Big Shift, and so in many ways, the term has lost all sense of real meaning.

One of the issues is that the phrase is singular, allowing brands to think of evolving circumstances as a fixed or distinct shift, i.e., a mindset that implies we’ve done The Big Shift once X is complete. Used accurately, it refers to the constant shifting which shapes the retail climate.

8 hallmarks of the constant shift

To prepare teams for the constant transformation needed to keep pace in a rapidly changing world, leaders need terminology to match the state of doing business. Brands must build robust processes and automation that will allow them to make the strategic pivots that expansion requires. Surviving, and thriving, falls to those brands that embrace the constant shift and engage in ongoing retail transformation.

Read our blog to learn more about how retail transformation can help you build a backbone for future expansions and download our whitepaper to learn more about how it connects to the constant shift.

With many retailers already saturating mature markets, it’s no surprise that so many are shifting their focus to expand operations and enter new markets. Barely a day goes by without another brand announcing retail expansion plans, whether that’s entering a new market, implementing an omnichannel approach, bolstering supply chains, opening stores in new cities, or doubling down on cross-border e-commerce. Here’s a quick rundown of the 8 most common ways retailers approach expansion:

Shifting from expansion to transformation mode to enable long-term growth

Even the most robust expansion plans will fail if you don’t prime the finance team to handle the back-end accounting. Retailers struggle to achieve their goals when a financial backbone isn’t in place. Much of this is down to prioritizing the more exciting aspects of financial transformation, such as your omnichannel presence and failing to spend adequate time and money on the less glamorous parts of the expansion puzzle.

Constantly adding new things without building the required financial capabilities may leave your brand crippled by fines for various compliance standards, making significant decisions based on inaccurate reports, and struggling to get complete visibility of operations. All this leaks into the customer experience, with supply chains breaking down due to delayed payments, invoices arriving late, and stressed finance teams trying to find the capacity to deal with payment issues.

Retailers need to invest in financial transformation before hitting expansion mode. This blog approaches expansion with your finance team in mind. Let’s look at the tools and processes you need to have in place before you make your next big move.

5 ways financial transformation enables retail expansion


Some recommended reading to get you started thinking about financial transformation:

benefits of financial transformation

Audit your current financial processes and systems with scalability in mind

Before you act, you must examine. Why not give your finance function a health check? You need to take a long hard look at your financial systems and processes. Adding a higher volume of work to under-pressure systems is rarely wise. So you will need to have full awareness of your current capacity.

Accurately determining where your finance team will face bottlenecks should be the first step in any retail transformation and must involve accounting team members. Leaders need to ask as many questions as possible during this phase.

At this point, most retailers will begin to identify the need for more robust systems to handle any future expansion. Check out our resource on building an ERP requirements checklist list to help you assess your specific needs.

Harness the data you already have and create a realistic roadmap for expansion

Harness the data you already have and create a realistic roadmap for retail expansion

Before you make any steps towards expansion, why not consolidate data and insights from across your organization so that you can make genuinely data-informed decisions about how best to grow operations.

Brands have more information at their fingertips than they realize, and it requires a truly agile approach to tap into that wealth of knowledge.
Speak to all departments, perhaps the marketing team is aware of demographics that aren’t on finance’s radar, or maybe the legal team knows about the difficulties of operating in a market that looks red-hot based on website hits. Understanding all the data you own will help you answer some of the many questions that expansion involves.

Some of the many retail expansion questions that your data could answer

Understand the cost of all relevant global financial compliance requirements

5 most common sources for cost of compliance

Retailers are usually brimming with knowledge about the ubiquity of WeChat in China or the popularity of mobile eCommerce in Brazil. Yet very few brands are aware of the nuances involved with accounting across borders. Before your team gets too excited about retail expansion in a new market, breaking down the financial reporting requirements in new jurisdictions is essential.

You’ll find that accounting regulations can shift in new markets and that remaining compliant with global accounting standards will save your brand from hefty fines and reputational damage. Even if you intend to stay in the same market, expansion may include adding subscription services, building a robust e-commerce channel, or opening a new store. It’s vital to understand all financial regulations governing these actions.

Some compliance regulations your team needs to think about before retail expansion

Partner with companies that know your industry and solutions designed to scale

One of the biggest challenges retailers face when expanding is partnering with the right companies. Many large brands don’t allow their solutions partners to share their information, so you may need to speak directly with software consultants and their partners to determine their experience in your industry. Look for teams and consultants that understand the nuances of the retail landscape.

Once you get chatting, they’ll be able to make relevant recommendations. Once you speak to them, it will be evident if they’re aware of the challenges posed by retail expansion and whether their solutions can support your growth. Even if they can’t share the names of brands they work with, they will be able to provide relevant information based on their industry experience. Speaking with others about their experience partnering with the company should also be possible.

Some questions you might ask any potential partners

Invest in secure, centralized solutions that keep your brand safe during retail expansion

Best practices for protecting your data

According to estimates, every 39 seconds, a data breach occurs in the United States. As a result, companies tend to put a lot of the focus on security on their customers’ data protection. However, they equally need to invest in appropriate back-end protection of all financial information.

The average cost of compliance has skyrocketed in recent years, with data breaches becoming part of the new normal. Not only do these breaches cost retailers hefty amounts through fines and legal fees, but they do considerable damage to reputations in new markets.

Often, retailers work between disparate systems, managing leases and recurring billing on separate databases. Not only does this make it hard to get visibility of your financial situation, but audits and proving compliance can be cumbersome. Not to mention the fact that this kind of set-up results in moving spreadsheets and critical financial information between systems to consolidate finances, leaving your brand vulnerable to attacks.

Critical to any successful retail expansion journey will be implementing centralized accounting systems and ERPs. These allow your finance team secure and controlled access to all your financial information. It’s just a matter of investing in robust, scalable solutions that can keep all your financial information safe as you grow.

Work with ERPs that allow for enhanced features. For instance, Microsoft Dynamics ERPs will enable you to add any functionality you need to handle leases through its network of partners. Out-of-the-box solutions such as Property Lease Management, Multi-Entity Management or Subscription Billing Suite give your team advanced accounting solutions within the secure interface of your ERP. To find out more about what to look for in an ERP, check out the ultimate guide to choosing an ERP for your transformation.

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