How RPC Reduced Overdue Accounts by 70% to Strengthen Cash Flow
- 13 min read
RPC’s manual AR processes and limited payment options for their customers were translating into too many overdue accounts.
In this case study, learn how RPC addressed their significant backlog of past-due invoices, reduced the total dollar amount for overdue invoices across all customers, and accelerated cash flow.
Collector of the Year shores up cash flow gains with click-to-pay invoicing
- ERP: Microsoft Dynamics
- Industry: Research and Technology
- Active Customers: 1300+
The Research and Productivity Council (RPC) provides an array of services that help ensure food safety, air quality, and marine health in Eastern Canada and around the world. RPC’s accounts receivable department discovered a growing problem with overdue accounts. Manual AR processes and limited payment options for their customers were the culprits.
Sluggish manual collections and a DSO crisis point
Before Implementing Versapay:
- 30+: The average days clients took to pay
- $800,000: The total dollar amount for invoices over 90 days overdue
- 2: The total hours spent per day manually processing payments
For a long time, RPC only accepted payments manually. This involved taking clients’ payments using a debit machine at their reception.
Tammy Craft, RPC’s Accounts Receivable specialist, knew this limited setup meant clients could only pay RPC in a few ways. This system was inconvenient for both RPC and their customers, and on top of that, the terminal fees were adding up.
For most projects, RPC asks for upfront payment before they begin laboratory testing. Yet, whenever Tammy or her colleagues would send out invoices for upfront payment, clients had to call in with their credit card details and RPC manually processed them. When a customer didn't have a credit card, they sent a check. Imagine how slow and labor-intensive this process was for RPC’s AR team, especially when factoring in the company’s more than 1,300 client accounts.
The manual and sluggish process was inefficient. And the impact of being unable to securely capture payments from any channel beyond credit card or check (or encourage customers to pay online using their preferred payment methods) quickly became a bigger problem, following a restructuring of the accounting department.
Tammy was working in the accounts payable department at the time. It was only later when she joined the accounts receivable team that she noticed a serious problem with overdue accounts: across all accounts, the total dollar amount for invoices over 90 days overdue was $800,000. Tammy was blown away by what she’d walked in on.
Automated payments deliver collections gains
So, Tammy rolled up her sleeves and got to work addressing the company’s significant backlog of past-due invoices. RPC started using Versapay's click-to-pay invoicing solution to process and automate payments right within their Microsoft Dynamics ERP.
After Implementing Versapay:
- 70%: The reduction in the number of accounts with invoices over 90 days past due
- $200,000: The total dollar amount for invoices over 90 days overdue, down from $800,000
- 2: The days it takes for most click-to-pay payments to hit RPC's bank
When clients received an invoice by email in the past, they had to call in with their credit card info. RPC would then have to manually process it.
Now, when customers receive their email invoices, they can pay online in just a few clicks. They can also pay individual invoices in full using their preferred payment method. Or, if they want to, they can view all their invoices at once and customize their payment amount.
Once paid, RPC can retrieve and apply these payments to the right invoices in their enterprise resource planning (ERP) system, Microsoft Dynamics. By taking advantage of Versapay’s seamless integration with Microsoft Dynamics, RPC has accelerated their AR workflows and reduced the time they spend collecting payments.
In five months, Tammy brought that worrisome figure of $800,000 for invoices over 90 days overdue to less than $200,000. Tammy’s big save led to her winning Collector of the Year in Versapay’s inaugural AR All-Star Awards.
Beyond exceptional collections gains, here are four stellar results experienced by RPC since implementing Versapay:
1. Instant online credit card payments replace in-person debit swipes
With the accounts past-due crisis in their rear-view mirror, RPC set their sights on locking in incremental gains as a result of their newly transformed AR process. They wanted their growing client base to deliver more predictable and faster cash flow. Not bottlenecks in the accounting department.
A lot of RPC’s newer clients are now using credit cards. Before Versapay, RPC had no ability to offer auto-charges, but now many clients take advantage of it. And for those clients that aren't comfortable leaving their credit card on file, they can continue making payments in an instant through their personalized click-to-pay links.
For RPC’s accounting team, it’s a far cry from swiping cards at the front desk. Or listening to card numbers called out over patchy cell reception. Not to mention, they now can rest assured they have a much more secure method of processing payments. RPC has successfully minimized the scope of their cardholder data environment by no longer having to manually handle sensitive credit card data. Now, all payments are made through their click-to-pay environment. This tokenizes the data, ensuring a more secure payment experience.
2. Cash hits the bank the next day, as clients approve auto payments
Before integrating their payment processing with Microsoft Dynamics, RPC would email every invoice to each customer. And clients would take the traditional 30 days to pay, based on RPC’s standard net 30 payment terms.
But now Tammy has noticed a shift. When using Versapay to send customers a link to an online payment portal, RPC gets paid within a few days instead of 30.
A similar shift is occurring among customers using the auto-pay option. Before, RPC manually handled payments from customers who had given permission for their cards to be kept on file and charged. It could take a week before the collections team got through them all.
Today, these credit cards are automatically charged the next day. That means cash is in RPC’s bank account the next day, as well.
3. Clients get peace of mind with encrypted payment processing
Embedding payments in their ERP means adding an extra layer of security to RPC’s payment processes. RPC’s previous system for storing customer payment information was password-protected, which failed to meet standards that fit the research organization’s accustomed international quality benchmarks. RPC wanted to ensure they were in absolute compliance with PCI standards.
By integrating Versapay’s payment processing solution with Microsoft Dynamics, RPC has vastly enhanced their security measures. They are no longer concerned about not being PCI DSS compliant. The integrated payment solution means they can now securely process payments and pass sensitive customer data directly into Microsoft Dynamics. This has maximized the efficiency of RPC and Tammy’s team by eliminating hours spent reconciling payments with their Dynamics instance.
4. Collaborative AR gains open career development doors
But, the gains RPC has made aren’t only about processes and payments. Solving their inefficient processes has been a big win for AR Specialists like Tammy, too. Tammy’s progress in reducing overdue accounts has made her a rising star in RPC’s accounting department, earning her a nomination from her financial controller for Collector of the Year.
Tammy and team have seen hours and hours of manual collections work taken off their plates every single week. Much of the tedious, time-consuming work they perform is now automated. That, coupled with the gains in efficiency, cash flow, and customer experience, have freed Tammy’s team to perform more strategic work. In fact, Tammy now plays a larger role in the accounting department since putting click-to-pay to work on their collections. She’s been supporting the financial controller’s work while collaborating more with junior accountants.
Embed your payment processes within your ERP
Tammy and RPC’s achievements show how tight-knit accounting teams can turn the tide on seemingly impossible problems with collections and cash flow. You can drive massive efficiency gains, accelerate and bring predictability to your cash flow, and build incredible customer payment experiences—ones that make it easy for customers to pay you. All you need is a committed team along with a payment solution that allows you to accept all payment types across your point of sale and AR channels, embedded within your ERP.
The Research and Productivity Council (RPC) provides contracted (R&D) services, such as laboratory testing and analysis for food safety, air quality, and marine health. RPC grew their sales 17% from 2019 to 2020, across a company record of 1329 clients. Their fish health laboratory is internationally renowned and they are also ISO accredited for their DNA testing work.
About the author
Jordan Zenko is the Senior Content Marketing Manager at Versapay. A self-proclaimed storyteller, he authors in-depth content that educates and inspires accounts receivable and finance professionals on ways to transform their businesses. Jordan's leap to fintech comes after 5 years in business intelligence and data analytics.