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 familiar?
So you might wonder what factors are contributing to these changing expectations? Here are 3 factors that are undeniable:
1. Our experiences in our personal lives are changing our expectations at work. For example, we’re all used to going online to shop at Amazon, booking travel on Expedia, or streaming media on-demand from providers like Netflix and Spotify. Technology is changing our expectations, and we’re now bringing those same expectations to work.
2. Tech-savvy Millennials now represent the largest pool of labor within the US workforce at 56M*, with Post-Millennials quickly catching up behind. This impacts you on two fronts. For one, your customers are expecting a digital experience, it’s all they know. Secondly, it will become harder for you to find and retain employees willing to do the repetitive tasks required to manage your AR the old, manual way. Rather, your employees expect you to enable them with the digital tools they need to do their jobs. After all, who went through 3-4 years of college or university to do manual and repetitive tasks like sending invoices, sending collections reminders, or processing and reconciling payments? (*Source: Pew Research Center analysis of monthly 1994-2017 Current Population Survey (IPUMS))
3. Electronic payments are increasing in popularity because they’re easier and less costly than cutting paper checks. According to the Harvard Business Review, 67% of companies have gone digital for over 30% of their payments*. This proportion continues to grow rapidly as more and more customers transform their AP processes and insist on paying their suppliers electronically. (*Source: Harvard Business Review Analytic Service Survey, August 2018)
For all the reasons above, successful CFOs see AR as a critical step in the customer journey, and a game changer in terms of winning and losing. As an example, John Shamanis, CFO at Carrier Enterprise, sees Customer Centric AR as a strategic differentiator that enables them to compete and win in a heavily commoditized marketplace by removing friction for their customers.
In fact, leading CFOs see Customer-Centric AR as the difference between winning and losing as the benefits of an exceptional customer experience affect the entire organization. Here’s what winning looks like:
So if Customer-Centric AR is so great, why isn’t everyone delivering it? It usually boils down to some combination of business complexities, time and resources. Further, past tools simply were not designed for it. For example:
In general, tools in the past were modular by nature and failed to address the end-to-end customer journey. Conversely, if you can make things simple and convenient for your customers – from invoice to payment – they will gladly go online to pay you as that’s what they want and expect. That’s why we’ve developed a platform from the ground up that delivers an online Customer Centric AR experience for your customers.
VersaPay ARC® is fundamentally different than other solutions on the market. Our strategy is to eliminate the work in AR before it happens as opposed to just helping to manage the work once it has been created. Our approach to the problem is to provide a simple way for your customers to come online to self-serve, to view and pay invoices, and to get help from you when needed. This provides a great customer experience, and eliminates the vast majority of the repetitive tasks inherent in managing AR. Our customers are seeing over 80% adoption, on average, across their hundreds of thousands of end-customers.
By putting your customer at the center of your AR processes, you are enabled to deliver superior customer experiences while also achieving efficiencies to scale.
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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