Oct 22, 2025
Most turnaround situations share a common denominator: cash flow problems that stem directly from inefficient accounts receivable management. Companies in distress typically have 45-60 days of sales outstanding, with some invoices aging beyond 90 days while management scrambles to keep operations running.
The mathematics are unforgiving. A company with £2 million in monthly revenue and 60 days sales outstanding has £4 million trapped in receivables. Cutting that to 30 days releases £2 million in working capital: often the difference between survival and bankruptcy.
Manual AR processes make this impossible. When finance teams spend 40+ hours per week on invoicing, payment tracking, and collections calls, they can't focus on the strategic cash management that turnaround situations demand.
The first intervention point for turnaround advisors is invoice processing speed. Traditional manual invoicing takes 5-7 days from delivery to invoice dispatch. AR automation platforms reduce this to same-day or next-day invoicing, immediately shortening the payment cycle.
Automated invoice generation pulls data directly from delivery systems, eliminating manual data entry and reducing errors that delay payments. When customers receive clean, accurate invoices within 24 hours of delivery, payment timelines compress naturally.
But speed alone isn't enough. Struggling companies need every invoice paid on time, which requires proactive payment monitoring rather than reactive collections. AR platforms track payment patterns, flag at-risk accounts before payments become overdue, and trigger automated follow-up sequences that maintain payment momentum without consuming staff time.
Turnaround advisors know that one major bad debt can derail an entire recovery plan. Companies in distress can't afford to extend credit to risky customers, but they also can't afford to lose revenue by rejecting all new business.
Modern AR technology solves this through real-time credit risk assessment. Platforms integrate with credit bureaus and financial databases to provide instant creditworthiness scoring for new customers. Rather than relying on outdated financial statements or gut feelings, turnaround advisors can make data-driven decisions about credit limits and payment terms.
The technology goes further by monitoring existing customers for early warning signs of financial distress. Changes in payment patterns, delayed responses to collection attempts, or deteriorating credit scores trigger immediate alerts, allowing companies to adjust credit terms or collection strategies before problems escalate.
For companies in turnaround situations, working capital optimisation isn't a nice-to-have: it's a survival requirement. AR technology provides granular visibility into cash conversion cycles, identifying specific bottlenecks and improvement opportunities.
Dynamic discounting features encourage early payments by offering automated discounts for customers who pay within 10 or 15 days. While this reduces gross margins slightly, the working capital benefits often outweigh the discount costs, especially when companies are paying high interest rates on bridge financing or factoring arrangements.
Payment plan automation helps recover aging receivables that might otherwise become write-offs. Rather than accepting that 90+ day invoices are uncollectable, AR platforms can automatically propose and manage payment plans that recover cash over time while maintaining customer relationships.
Traditional collections processes rely heavily on phone calls and manual follow-up, which consume enormous time while producing inconsistent results. AR automation transforms collections into a data-driven process that maximises recovery rates while minimising staff time.
Automated email sequences maintain consistent communication with overdue accounts, escalating message tone and urgency based on aging brackets. The technology tracks which message types, timing, and frequency produce the best response rates for different customer segments, continuously optimising the approach.
For high-value or strategic accounts that require personal attention, the platform prioritises collection activities and provides representatives with complete payment histories, previous communication logs, and suggested approaches based on successful interactions with similar accounts.
Struggling companies often have fragmented financial systems: accounting software that doesn't talk to CRM systems, payment processors that require manual reconciliation, and reporting tools that provide outdated information. AR platforms serve as central hubs that integrate these disparate systems.
Real-time dashboard reporting provides turnaround advisors with instant visibility into cash positions, aging reports, collection performance, and forecast projections. Rather than waiting for monthly financial statements, decision-makers can monitor cash flow daily and adjust strategies immediately when problems arise.
The integration extends to bank connections that provide automatic payment matching and reconciliation, reducing the time finance teams spend on administrative tasks while ensuring accurate cash reporting.
Turnaround situations don't have time for lengthy technology implementations. Modern AR platforms are designed for rapid deployment, often going live within 30 days of initial setup.
Cloud-based architecture eliminates the need for internal IT resources or infrastructure investments. Pre-built integrations with popular accounting systems minimize custom development requirements. Template-based setup processes allow companies to begin processing invoices immediately while fine-tuning advanced features over time.
The key is prioritising high-impact features first. Start with automated invoicing and payment tracking, then add credit monitoring and collections automation as the system stabilises.
Turnaround advisors need concrete metrics to demonstrate progress to stakeholders and lenders. AR technology provides detailed analytics on the metrics that matter most:
These metrics provide objective evidence of operational improvements that support broader turnaround narratives with creditors and investors.
Companies that successfully navigate turnaround situations don't just survive: they position themselves for growth. Efficient AR processes become competitive advantages that support expansion once financial stability returns.
Faster cash conversion cycles improve return on invested capital. Lower collection costs increase profit margins. Better credit risk management reduces bad debt expenses. These improvements compound over time, creating sustainable competitive advantages that persist long after the turnaround is complete.
Start with a rapid assessment of current AR performance. Calculate days sales outstanding, identify aging patterns, and quantify time spent on manual processes. This baseline provides the foundation for measuring improvement.
Next, prioritize the highest-impact opportunities. For most struggling companies, this means automated invoicing, payment tracking, and basic collections workflows. These features deliver immediate cash flow benefits while requiring minimal setup time.
Plan for progressive enhancement. Once core features are operational, add advanced capabilities like credit monitoring, dynamic discounting, and predictive analytics. This approach ensures rapid initial benefits while building toward comprehensive AR optimisation.
The turnaround window is narrow, but the right AR technology can expand it significantly. Companies that embrace digital transformation of their accounts receivable operations don't just collect money faster: they create the cash flow foundation necessary for sustainable recovery and growth.
Ready to transform your AR operations? Contact Invevo to explore how modern AR technology can accelerate your turnaround timeline and improve cash flow within 30 days.
