Improve customer experience to get paid faster: Enable digital payments in your ERP

What you’ll learn


  • Explore how new age payment processing options can help you scale your business and optimize AR

Managing B2B payments is a common pain point for many mid-sized businesses. It also costs them much more than they are ready to admit.

Checks continue to remain the common payment format for many businesses. Despite checks being the Achilles’ heel for AR departments, suppliers have no alternative but to accept this payment preference of their buyers. Some of the hurdles of processing checks are as follows:

  • High overhead/costs: According to a survey done by the Association for Financial Professionals, businesses spend up to $30,000 for processing 20,000 checks a month.
  • Capital and speed: A major disadvantage of checks for suppliers is that they come with a float of approximately three days. This buffer is also one of the reasons why buyers favor check payment. The reason for slow processing can be attributed to scanning checks and remittances separately, depositing payments in banks, and manually keying in data for reconciliation. Together, this delays payment reconciliation by 3-5 days.
  • Limited support for other payment methods such as credit cards: Since many ERPs don’t have a native payment portal, there is no scope to use credit card payments.
  • Time-to-cash- A short transaction cycle indicates healthy working capital and the business’s ability to repay debt. A longer transaction cycle affects AR health and increases DSO.

Digital payments offer a better customer experience

Source

 

Digital payments offer a better customer experience

COVID-19 has underscored the importance of digital payments. Embracing digital payments and optimizing the back office is now the clarion call for many businesses. In a survey done by Visa, nearly 72% of the small and micro-businesses surveyed reported that they expect their customers to continue to prefer digital payments in the future.

  • Customer experience affects customer attrition

Customer attrition refers to customers severing relations with a business. These customers do not associate with or purchase from a company after a given period. Customer retention, on the other hand, helps track how many customers are loyal and make repeat purchases.

Studies on customer attrition show that positive relationships with customers lead to customer commitment and retention, while poor customer practices result in higher customer attrition rates and eventually lower working capital.
Digital payment channels help reduce fraud risk

Source

  • Digital payment channels help reduce fraud risk

Frauds have been increasing at a rampant rate in the AR space. There has been a 42% increase in customer fraud and cybercrimes in the financial sector in the past 12 months.

Configure your AR: Resolve bottlenecks

Source

Check Fraud 

In 2018, check fraud measured for 47 percent of industry losses ($1.3 billion), according to the American Bankers Association’s 2019 Deposit Account Fraud Survey.

Configure your AR: Resolve bottlenecks

In order to configure and revamp any business’s payment capabilities, here are some salient features/best practices that companies should look at while choosing the right plug-in for AR.

Streamline collections

Avoiding collection bottlenecks would help organizations optimize cash flows. Some of the bottlenecks in the collections process include:

  • New account processing is time-consuming due to the need to gather information, check sources, and examine all the data. Focusing on credit scores for accounts that order small to moderate amounts takes up much time and effort and provides minimal returns.
  • Order approvals. Any delay in communicating with past-due customers because they don’t show up in a collection work file results in businesses facing a bottleneck.
  • Long-tail for receivables is another area where a large portion of customers who need to be reached can overwhelm collectors and distract them from more important issues. Fax and email are by far the most effective ways to get these accounts – ideally incorporated within an automated solution.

Reconciliations handling

The analysts’ job is to negotiate maximum payments or promises of payment from customers. But more often than not, they are stuck with handling reconciliations.

  • Slow data entry techniques:

Reconciliation is cumbersome for many businesses. For example, downloading payment receipts from banks in the right format and then uploading them in the standardized format to customer portals is tedious. 

  • Erroneous inputs:

Traditional reconciliation processes were always plagued by inaccuracies and errors. As the data needs to be in sync and dynamically updated between many operations, there could be mistakes in entries in a manual process.

  • Reconciliation data gathering and matching:

While you may think that setting up an effective reconciliation process could resolve almost all bottlenecks, your job gets done only when the reconciled data could be safely archived and retrieved when needed. This gives rise to new hurdles like data storage security, rising storage costs, and difficulty locating data sets with a manual retrieval process.

Advanced security and compliance with PCI DSS-certified payment processors are a necessity. With an advanced plug-in for the AR, you can efficiently and securely store and use customer payment data.

Central Repository

A single source of the repository is a centralized location where analysts can create and track payment commitments, tasks, notes, and reminders. What happens when there is a lack of an all-in-one repository?

Invoicing challenges:

  • eInvoicing challenges such as collecting invoices from multiple sources and in varied formats such as EDI, XML, and CSV, and uploading them to their respective ERPs.
  • Invoicing data stored in multiple tools

 Cash reconciliation challenges:

  • Difficulty in data portability and database administration
  • Mismatch of bank statements with internal records

Collections challenges:

  • Lack of a centralized hub for reporting and analytics
  • Hard to track or update client correspondence history

With scattered correspondence data, the finance team may have to work on data that is not updated and be unable to identify trends from the past data.

The RadiusOne Plug-In

RadiusOne AR apps meet AR teams’ needs and aim to automate labor-intensive processes, maximize working capital, and facilitate faster cash conversion. Let’s look at some of its benefits and features.

Reduced payment processing time

Digital payments are processed faster. According to Deloitte’s PayTech Revolution report, digital payments are more than 50% faster to process than traditional payment processing. CXOs can expect quicker payment processing, which would instantly translate to more authority over the company’s receivables.

Diminished administration expenses

Digital payments significantly reduce reconciliation fees and effort. The total cost-efficiency gains could go as high as 500%. All this cost reduction naturally reflects in improved EBITDA.

Improved customer loyalty 

With 86% of buyers willing to pay more for a great customer experience, CFOs are now revamping their age-old AR management practices to make it more user-friendly. With RadiusOne, organizations have experienced meaningful customer interactions through customer self-service options where users select and pay invoices from anywhere, anytime.

Advanced compliance 

With best-in-class payment technology and PCI-DSS certification, companies can unlock better compliance control for digital payment processing. It also enables two-factor authentication, role-level access, and fund-on-file tokenization.

Zero-touch processing

With ‘zero-touch processing’, companies can deliver invoices to customers with payment links. With the advanced OCR engine, remittance information is collected and matched to organizational codes directly, with minimal manual intervention.

There’s no time like the present

Get a Demo of RadiusOne A/R Suite for Your Business

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The HighRadius RadiusOne AR Suite is a complete accounts receivable’s solution designed for mid-sized businesses to put their order-to-cash on auto-pilot with AI-powered solutions. It leverages automation to fast-track key accounts receivable functions including eInvoicing & Collections, Cash Reconciliation, and Credit Risk Management powered by RadiusOne AR Apps to improve productivity, maximize working capital, and enable faster cash conversion. Affordable, quick to deploy, and functionality-rich: it is pre-loaded with industry-specific best-practices and ready-to-plug with popular ERPs such as NetSuite and Sage Intacct. The HighRadius RadiusOne AR Suite is designed to automate labor-intensive processes while streamlining credit and collections activities for faster AR processing, better cash flow and improved profitability.

Lightning-fast Remote Deployment | Minimal IT Dependency Prepackaged Modules with Industry-Specific Best Practices.

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