1. Resource Library

Electronic Invoice Presentment and Payment (EIPP) vs. Automated Receivables

  • 3 min read

While EIPP and automated receivables may seem similar, there are some important differences that separate the two. This blog covers what you need to know.

As accounts receivable automation continues to become entrenched as the new standard for managing receivables, many well-intentioned leaders continue to investigate alternative solutions that don’t address the totality of the problems their teams face on a daily basis. Today, I’d like to take a look at Electronic Invoice Presentment and Payment (EIPP) with a view to the important differences between it and our automated accounts receivable platform, ARC.

At a surface level, the intent behind EIPP and ARC is very similar – provide customers with a great front-end experience for the AR process, increase the number of payment options available and, ultimately, drive more efficiency out of the AR process. Unfortunately, despite similar purposes, the business impacts are wildly divergent.

EIPP – The ugly truth

Let’s assume that your customer base follows a normalized distribution curve – 1/3rd will pay early, 1/3rd will pay on or around the deadline, and a 1/3rd are (to put it nicely) “payment averse.”

Under this scenario, 2/3rds of your customers have good intentions to pay their invoices – and for these segments, EIPP provides a smoother payment experience. For these individuals, we’d expect to see payments come in more quickly – and in doing so, a corresponding improvement across metrics like Average Days to Pay, and in your aging reports. There may even be a fringe component of that third “payment averse” segment that may pay in a more timely manner – but the reality is that this segment requires reminders, interactions, and follow-up to either a) prompt payment, b) negotiate some sort of payment plan or c) resolve a dispute and move forward.

Achieving success in "payment averse" segment is where true business impact comes from – and EIPP does not provide the functionality to power collaboration to resolve disputes, nor the automation to power effective collections without raw human effort to do so.

The ARC advantage

Businesses don’t need their good customers to pay faster on Net 30 terms – they need customers in dispute to move quickly to resolution, and delinquent customers to make payment. This is what drives true impact and improvement.

This is where ARC shines – when it comes to the communications that lead to dispute resolution, all interactions are stored centrally in ARC, so whether your customer responds by email or directly in the customer portal, these interactions are stored and retrievable by both your AR team and the customers team, so that all parties involved are always up to date on what’s happening on the account.

The other major difference is ARC's intelligent notification system. With over 150 customizable notifications, ARC will ensure that your customers are aware of key stages in the invoice and payment process, encouraging and motivating the behavior changes in that troublesome third segment that actually have significant impacts on your business.

The decision

EIPP has proven to be a valuable stepping stone for businesses looking to improve their customer experience – which is a cause that we are wholly in support of. Unfortunately, the harsh reality is that businesses that implement EIPP may be improving front-end AR metrics, but are leaving money on the table (literally). The true measure of an AR project is improvements in working capital – an area where ARC shines.

Invoice Presentment Y Partial
Collaboration Y N
Collections Y N
Payment Y Y
Cash Application Y N

If, as a business, your objective is to get good customers paying faster, then EIPP may be a viable solution; however, if your goal is to drive bottom-line results, the reality is that you need to influence your “payment averse” customers. Collaboration and collections are the key levers that drive influence for this segment – and unfortunately, those are two key levers that are missing in any EIPP implementation.

Always stay up-to-date


Join the 50,000 accounts receivable professionals already getting our insights, best practices, and stories every month.