The Digital Age of Accounts Receivable is Dawning. Are You Ready?
We’ve all heard the story of Netflix and Blockbuster. The David and Goliath tale of how one small, agile, forward-thinking business took down a behemoth. How in only a few short years, Blockbuster went from being a multi-billion dollar business to filing for bankruptcy. Since then, countless business books, blogs and even university courses have been dedicated to dissecting the story. How could Netflix, a flailing business itself back in 2000, crush Blockbuster so completely and so swiftly?
Nowadays, we laugh when reading about how Blockbuster turned down an offer to buy Netflix for a mere $50 million in 2000 – “How could they have been so stupid?” And we roll our eyes when looking back on Blockbuster’s online DVD rentals launch – “The future was streaming, not DVDs!” But hindsight is 20/20. If Blockbuster knew then what they know now, what would they have done differently?
Today’s AR is going through a digital transformation, just like video rentals did almost 20 years ago. AR automation platforms are completely changing the way accounts receivable operates, improving things for both collections teams and the end-customer. And just like with Blockbuster and Netflix, there are companies leaning into this transformation and others that are avoiding it. Which are you?
Before AR automation, accounts receivable hadn’t fundamentally changed in decades. For many organizations, the processes and tools used today are the same ones used back when the first Blockbuster store opened in 1985: phones, checks, outdated sheets of data, handwritten notes/amendments, and printed invoices. And just like that first Blockbuster store, these companies are destined for hard times.
You have to adapt to stay competitive and you have to transform to lead.
Some organizations falsely believe they are on-course for positive digital transformation but have only just dipped their toe in. These are the companies who have made the leap from printed invoices to delivering invoices via email, for example. It’s a step in the right direction, but it’s not enough to make a lasting difference. In fact, emailing invoices is the basic expectation now. It’s the equivalent of Blockbuster releasing online DVD rentals when Netflix was already developing their streaming service. Too little, but – in the case of AR – maybe not too late.
End-to-end AR automation solutions, like VersaPay ARC, are transforming the receivables process. From invoice presentment where you can track not only the receipt of an invoice but also if it was viewed, to customer payment portals that are adopted by over 70% of customers and proven to increase the speed of payment, AR has finally come into the digital age. Forward thinking organizations have already transformed and are seeing the benefits.
One clear advantage AR professionals have now when compared to Blockbuster 20 years ago – other than the benefit of hindsight – is the proof that it works. AR automation is already being used by some of your competitors, it connects seamlessly with your ERP, and implementations are thoughtfully managed to ensure you can see an impact on day 1.
So, I pose the question to you. Knowing what you know now, what will you do differently? In 10 years’ time, do you want to look back on this year thinking “How could we have been so stupid?”, “The answer was obvious!” or do you want to be Netflix?
Katie Canton has been helping companies develop and implement successful social media, content marketing, and marketing communications strategies for more than 10 years. Since joining VersaPay in 2018, she writes on topics such accounts receivables automation, Customer-Centric AR, collections management, and fintech.
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