What is Cash Flow? The total amount of money received and doled out over a given period (usually a quarter), cash flow can either be positive or negative. Positive cash flow indicates that a company’s liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer against future financial challenges. Companies with strong financial flexibility can take advantage of profitable investments. They also fare better in downturns, by avoiding the costs of financial distress. Once the money going in and out of the business has been calculated, companies can come up with a “free cash flow” number or FCF. This is the money that the distributor has left over to expand the business or return to shareholders, after paying dividends, buying back stock, or paying off debt. Wholesale Distributors are in a Sticky Spot Because they effectively bridge the gap between manufacturers who make products and the end user customers that need those goods, wholesale distributors can find themselves in a sticky spot on the cash flow spectrum. This can turn into a more serious problem when economic conditions begin to soften. Here are eight steps distributors can Read More

125 Months of Positive Growth Since emerging from the grips of the Great Recession in 2009, the U.S. economy has been in growth mode. After contracting sharply in the Great Recession, the economy began growing in mid-2009, following enactment of the financial stabilization bill (Troubled Asset Relief Program or TARP) and the American Recovery and Reinvestment Act. Economic growth has averaged 2.3% annually since then, with growth reaching above 3.5% during several quarters and just two quarters of negative growth. Through November 2019, the U.S. economy has grown for 125 months without any significant decline in economic activity that would mark the beginning of a recession, according to the National Bureau of Economic Research. This puts the current expansion as the longest on record in NBER dating, which goes back to the 1850s. All Economies are Cyclical But all economies are cyclical, which means at least some level of downturn is likely lurking around the next corner. The distributors that take this into account now, and that examine and shore up their cash flows sooner rather than later, will be in the best position to ride out the storm and even come out stronger. In a new white paper launched Read More

Operating capital is the lifeblood of any organization and one of the key factors that keep companies running in both smooth and challenging economic conditions. When a distributor has cash flow, it can make payroll, pay its suppliers, keep the lights on and even manage the unexpected costs of running a business. Without this financial cushion, companies quickly find themselves operating invoice to invoice, and pulling resources from one area to cover expenses in another. With the national economic recovery in its 10th year, wholesale distributors may have forgotten what it takes to keep the lights on and the wheels running in a more challenging selling environment. Despite industry disruptors like Amazon Business, geopolitical issues such as trade wars, and a massive uptick in business-to-business e-commerce, wholesalers have been posting healthy year-over-year sales growth. Distributors saw their top-line revenue numbers and profits grow in 2018, according to the National Association of Wholesaler-Distributors’ most recent State of the Industry report. Most segments of the industry experienced record-high levels of activity. In total, the industry reached a record-high $6.01 trillion in sales for 2018 (up 7.5% from 2017), and now comprises 29% of the U.S. gross domestic product. Based on various earnings Read More

Managing accounts receivable (AR) could be a daunting task, especially when one mistake you make can potentially jeopardize the entire relationship you’ve built with your customers. If you have managed your company’s AR for a long time, you may have learned all the lessons already. But if you’re new in the role, it’s always better to prepare yourself ahead for problems you may run into instead of doing everything the trial-and-error way. On that note, here are the four most common accounts receivable mistakes you want to avoid. Mistake #1: Security – PCI Non-Compliance If your company accepts credit cards as one of the payment methods, you’ll need to pay close attention to whether your business and the tools you’re using are PCI-compliant. Being PCI-compliant means that you follow the set standards and guidelines that help manage and secure credit cardholders’ data. Being non-compliant means you’re putting yourself and your customers at risk. You can be charged with PCI non-compliance fees and you could be heavily fined should your non-compliance lead to a security breach. Depending on the seriousness of the breach, your fine could be hundreds of million or even billion dollars. And the cost for PCI non-compliance doesn’t Read More

“If you build it, they will come.” Many will know this phrase from the 1989 film, Field of Dreams. In the years since the film’s release, this expression has become somewhat of a mantra for the business world. Supply a great product or service, and you’ll have customers. Seems simple enough. However, in today’s competitive economy it is no longer viable to simply build a great product or service, attract customers and call it a day. You need to know how to provide a great customer experience as well. The following are the top three reasons why you need to make customer experience (CX) your new priority. 1. Reduce Churn Imagine you’re in a store, shopping around. You know they sell the product you want, so it should be a simple task. But the store is small and crowded, and the products are organized in a way that makes no sense to you. Where is everything located? The sales associates don’t seem to know, or care. You ask to talk to a manager, but no one can find one. Frustrated, you give up and leave. You can get what you were looking for somewhere else. The above scenario is all Read More

The holidays mean something different to everyone. For some people, they’re about spending time with loved ones and enjoying favorite holiday foods together. For others, they’re about giving and receiving presents and making sure the special people in your life know how much you value them. Here at VersaPay, it’s no surprise that who we value most is our family and our clients. 2019 has been an exciting year for both VersaPay and our clients and with far too many highlights to cram into a single blog post, we’ll name only a few: We’ve added several fantastic and forward-thinking clients to our roster – including Kite Realty, Amer Sporting Goods, Samtec, and Dream Office. We’ve formed key strategic partnerships with organizations we believe can help transform the world of Accounts Receivables - including CashBook, MRI Software, Mastercard, and US Bank. We were named a Leader in the inaugural IDC MarketScape for Worldwide SaaS and Cloud-Enabled Accounts Receivable. Just last week we announced a definitive agreement for the acquisition of VersaPay by Great Hill Partners, a private equity firm based in Boston, marking an exciting new chapter in VersaPay’s story. As we leap from strength to strength, 2020 promises to be Read More

Businesses success or failure hinges on the customer experience. Customer experience is the result of every interaction a customer has with your business – from marketing and sales, through to invoicing and payment - and it plays a large role in determining if a customer is going to do business with you again. Making the investment in this area will not only positively affect your customers, it will greatly impact your business as well. The Temkin Group found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within 3 years of investing in customer experience. So, what is the often-overlooked secret to delivering an exceptional customer experience and keeping customers coming back? Optimize, automate, and improve your back-office, including your AR process. Each touchpoint a customer has with your business plays a role in their decision to work with your company again. Relying on cumbersome, manual AR practices can make the invoicing and payments process extremely painful for your customers. Fast, secure, and convenient payment options drive repeat sales and improve the overall customer experience. Here are some of the ways your AR process is affecting your customer experience: Communication The main Read More

Once upon a time, collecting payment consisted of manually extracting data from spreadsheets, drafting up individual invoices, and sending them by mail to your customers. Then, the wait began for a check back in the mail. It was a long and drawn-out process thwarted with delays, but it was accepted as being just the way things were. But now, we live in an Amazon Prime, express checkout, contactless world and won’t think twice about exiting a website because it took too long to load. Clearly, as technology has become more advanced, our pace of life has quickened. This fast pace has also filtered into the corporate world, with technology fuelling fierce competition and increased workloads, business consumers are busier than ever. Consequently, business consumers have begun to expect more from their buying experience. They value flexibility and options to complement their demanding lifestyles. Combine this with data from PYMNTS.com and American Express’ October 2019 Accounts Receivable Automation report which found that US companies are owed as much as $3 trillion in outstanding invoices, and it becomes apparent that failing to adapt your AR processes to match the needs and demands of customers won’t end well. The result? Overdue accounts that Read More

If you’re finding it too time-consuming to manually mail out invoices and match payments to invoices, or if you’re finding your DSO (Days Sales Outstanding) keeps increasing while the time and resources required for your accounts receivable (AR) process are constrained, you need to make a change. We’ve put together these seven accounts receivable best practices that can help you collect payments faster while saving time and resources and improving the customer experience. 1. Automate your AR process If you find your AR team spend too much time sending and tracking invoices, dealing with customers’ inquiries, or chasing customers to collect payments, you need to automate. A good AR automation solution can drive efficiencies in your AR process, reduce human error, and also reduce your DSO. Through effective invoice presentment and management, integration with your ERP system, and by providing an easy-to-navigate payment portal dedicated to your customers, the right AR automation platform will improve the customer experience. 2. Speed up your AR process with discounts and shorter payment terms Another tip to help improve your payment process is to offer discounts or to shorten your payment terms. Terms such as 2/10, N30 act as a little incentive to help Read More

Change can be a frightening thing. Doing things the way they’ve always been done often seems like the easier option. However, just because something has always been done in a certain way doesn’t mean it’s always been done in the right way. Take accounts receivable and invoice presentment. Manually sending out hard-copy paper invoices to your customers is the way it’s always been done, but is it the way it should be done? Do you know what invoice processing is costing you? According to a recent report from PYMNTS.com, the average cost to process a single invoice is between $16.00 to $22.00. Where are these costs coming from? You might be surprised to find out. There are unexpected fees and hidden costs to every invoice. Here are four ways manual invoice processing is costing your business money: 1. Time Intensive Labor Instead of your team spending their time completing challenging and fulfilling tasks that will further grow your business, they’re manually sending invoices and inputting data. According to a report from Ardent Partners, the average time for a business to manually process an invoice was close to 11 days. On the other hand, this number was around 3 days for Read More

We talk to CFOs every day and it’s apparent that there is a dramatic shift happening in Accounts Receivables (AR) and the dynamics between suppliers and their customers as they interact throughout the Order to Cash (OTC) process. Specifically, we have entered the era of Customer-Centric AR. You may be wondering, what is Customer-Centric AR? In the past, only your biggest customers could demand special treatment from you, ranging from special terms, to customized invoicing, to taking payments however they wanted to send them. Regardless of the work effort required, you would gladly accommodate the requests as they were, after all, big customers.  For the rest and majority of your customers, this effort was not scalable. Rather, the rest of your customers had no choice but to submit to your invoicing and payment practices. In other words, your AR process was pretty “Supplier Centric”. Now, even your smallest customers not only demand special treatment, they also expect it. They want to interact with you online, on their terms, and in a simple and secure way. They want to self-serve to view and pay invoices at their convenience, and collaborate with you only when they need help. That’s Customer-Centric AR. Sounding Read More

What do social media and accounts receivables have in common? Up until now, you’d be right in thinking the answer was ‘not a whole lot’. Which was a problem. The principles of social media - the real-time creating and sharing of information and online collaboration – is exactly what modern AR departments need to succeed. “By and large, the AR process is very inwardly focused, which sounds kind of strange because it’s about collecting money from customers,” our CEO, Craig O’Neill, explains in the recently released Accounts Receivable Automation Report from PYMNTS.com and American Express. “It really doesn’t do a good job of communicating with, collaborating with and solving problems for customers.” In the report’s feature story, Craig explains how VersaPay’s AR platform, ARC®, uses a social media framework to increase transparency and foster greater collaboration between buyers and sellers. Imagine a world where your interaction with customers no longer requires you to monitor email messages, add notes in a collections database and tracking customer profiles in your ERP. The report also details the News and Trends in AR Automation as well as takes a deep dive into accounts receivable frictions and how technologies like AI can automate and accelerate Read More