Accounts receivable (AR) teams acknowledge the benefit of streamlined payments processes — but the pathway to frictionless payments is often not well understood.
An improved cashflow is an obvious benefit of on-time payments – and one need not look further than all-in-one AR automation software to ensure an efficient payments process. In a survey by PYMNTS, around 52% of executives believe they can easily manage and improve the company’s cash flow by using an all-in-one AR automation software.
Advantages of all-in-one AR automation platform in B2B payments
All-in-one AR automation provides numerous benefits to small and medium-sized enterprises, positively impacting collection and payments. Reducing late and delinquent payments are critical to a healthy cashflow for any business, and we can see how AR automation can facilitate this by its impact on the following:
1. Improves credit assessment
On-time payments are crucial for the growth of small and medium-sized enterprises. And it starts with ensuring your customers are capable of paying you.
Credit risk assessment is part of any business’ customer onboarding strategy. The common method is through trade references. However, there are many other factors that you should consider when assessing your potential customers’ credit risk. An easier way to access that crucial business information is through business credit scores.
- Digital credit applications
By incorporating credit score data to review credit applications, you can ensure that your decision in approving or declining credit terms is based on reliable data that considers varying factors of your customers’ business health.
- Credit insights
All-in-one software also gives users access to a current customer’s credit information. This credit risk insight makes it easier for businesses to understand their customers better, especially regarding payment behaviour. Credit information aids AR teams’ decision-making on the next step for dealing with late payments based on the customers’ credit score data. In some ways, businesses can use this information to help their customers avoid delinquent payments.
2. Simplify financial management
An all-in-one AR automation software helps increase cash flow visibility and better track accounts receivables. Both are crucial for a business’s financial development and play a strategic role in developing financial plans.
Financial management also hinges on the efficiency of the order-to-cash cycle (O2C). The ability of AR automation to integrate with existing accounting systems makes this possible.
- Automates collection process
The payment follow-ups and overdue reminders are automated, making the payment and debt collection process easy and efficient. The AR department does not need to send reminders manually, saving them time.
- Reduces data errors and duplication
All-in-one AR automation allows businesses to prevent data duplication and minimise errors when sending invoices to customers. This benefit reduces invoice disputes that can further delay payments..
- Automates reconciliation
It also enables businesses to reconcile payments automatically once they are received. And through direct debit payments, the whole payment process is further streamlined. This capability to write-back payments to your ERP saves time and resources – helping facilitate a healthier cashflow.
3. Creates great payment experiences
Clients love a quick and more efficient service at all times. And automating processes in the O2C cycle creates a rippling effect that impacts the customer’s experience. Here’s how:
- Online payments
With all-in-one AR automation software, businesses can include ‘Pay Now’ buttons on email or SMS invoices that will take customers to an online payment platform where they can pay in full or through instalments with their debit or credit card.
It’s a check-out experience that many in the B2C space have successfully implemented over the past decade. With the all-in-one AR automation software’s capability to process digital payments, it’s also now a reality for B2B organisations.
- Prompt reminders
An all-in-one AR automation platform creates efficiencies for businesses. Still, perhaps one of the most underrated benefits of it is how it can positively impact your customer’s payment behaviour.
AR automation facilitates an efficient communication workflow by sending persistent, polite and prompt payment reminders to your customers. These messages are crucial to help customers remember their obligations, get them to pay on time, and ultimately develop good payment habits that positively affect their business credit scores.
- Improved client communication
Clear communication is key to strong and long-lasting relationships with customers. AR automation helps streamline communications, so you’ll be able to focus on customers who need a more personal approach. An AR automation platform notifies you who those customers are through consolidated credit and risk data.
Most customers would want to maintain a good relationship with suppliers, but certain situations might have affected their ability to pay on time. Clients appreciate it when you talk to them personally and discuss the problem. Having that direct information from your clients gives you more control over the situation instead of relentlessly chasing them without any concrete plan to solve the problem.
Implementing AR automation in your business
An all-in-one AR software is a great way to integrate all the positive points of the numerous AR tools used by businesses.
Simply put, the ability to automate processes and rely on prompt, frictionless payments is necessary to prevent delays that could harm your business’s daily operations and growth.
If you’re interested to learn more about how you can start experiencing the benefits of an efficient AR process, speak with one of our AR experts, and they can walk you through options for your business.