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 send your DSO through the roof and working capital running for cover.
Oh, and don’t forget to throw in the high stress, rocky business, and strained relationships late payments cause.
Looking at these numbers, you’d be forgiven for assuming that the future of AR looks bleak. But there is a solution you can add to your arsenal of AR tools to help tackle outstanding payments – self-service online payment portals.
They’ll enable you to put an end to the game of cat and mouse often played in AR by facilitating customer self-service in your AR payment process. This is key as taking a customer-centric approach enhances your customer experience, making customers want to pay you.
There’s also much to be gained for your company. Implementing self-service digital payment portals can have a positive impact on the metrics that matter most to your organization. Then, your newfound cash and time can be used to help grow and scale your business.
Sounds good right?
So, without further ado, let’s dive right into the benefits of self-service online payment portals in your AR process.
Make your AR process work for your customers
Not all customers dodge bill payments because they lack the funds. Sometimes, paying bills is inconvenient, time-consuming, and even annoying.
So, to ensure swift payment from clients, flexibility and simplicity are essential.
Solve collection related issues by offering an online payment portal that’s on par with the online checkout systems your customers encounter in their day-to-day shopping. It’ll give customers the freedom to choose things like their:
- Preferred payment method
- Payment time
- Transaction amount
By optimizing your AR process using online payment portals, you make your customers’ needs a priority and ensure your AR process works for them. This improves the customer experience whilst simultaneously helping your business reduce things like customer churn rate, DSO, AR team workload, and admin costs.
Self-Service Payment Portals can help you secure faster payments as customers will no longer be bound by your office hours. Nor will they be confined to speaking with you on the phone when collection time rolls around. Instead, they’ll be able to pay you when it’s convenient for them.
This is especially useful if your business operates in a different time zone to its customers. So, having an online payment portal could be the deciding factor that leads to your business getting paid quickly or not at all.
And, let’s not forget about the speed of service customers will experience, which is another huge benefit using self-service online payment portals. Invoices can be automatically generated, sent, and paid within minutes of each other instead of hours and days as is the case when using traditional methods of collection.
Another win for all!
Improve your company’s financial position
Did you know that on average, American companies write off 1.3% of their AR accounts as bad debt?! That’s up from a year ago.
This figure may seem small but for large companies, it can be an eye-watering amount.
What’s more, statistics like this are bad news for metrics like your company’s working capital and current ratio.
However, providing the option of customer self-service in your AR process through an online payment portal can encourage faster payment by removing the barriers caused by cumbersome procedures in traditional payment methods.
Offering a quick and easy way to pay makes paying invoices a simple, rather than an arduous task that customers need multiple promptings before completing. This facilitates speedier payments which quickens your collections, improves your working capital efficiency, and bolsters your current ratio.
Going further, adopting digital payment portals can do wonders for your AR metrics as the incoming payments can provide your business with things like:
- More cash on hand to fulfill your short-term liabilities and build a solid safety net
- The ability to invest financially in improving your customer experience through better products, systems, and processes
- Greater financial stability and liquidity that’ll enable you to present a solvent image to your creditors and investors
Also, adopting a self-service approach to AR brings down costs but not just those commonly discussed. Online payment portals address the opportunity cost associated with chasing payments by reducing the financial and time costs of collections.
These resources can then be funneled into back into your business to solve other issues your clients face and finance more company goals and projects.
Avoid unnecessary risks and protect your reputation
Even in today’s technologically advanced world, some companies, be it due to a lack of awareness or skepticism, continue to use outdated and complicated methods for collecting payment.
This often leads to these businesses falling short in their AR customer experience. So, it’s no surprise that research by Mastercard once found that Fortune 500 companies are unable to access over $20 billion in working capital due to complex receivables processes.
Not only does this shortcoming disrupt collections, it also has far-reaching consequences.
Late payments adversely affect all parties associated with your business. For example, the costly delays associated with late and non-payment can result in you needing to borrow money to tide your business over as well as temporarily reducing or even halting certain operations to stretch cash.
These scenarios present serious risks to your customers who rely on your service as well as your own company. Also, these consequences are unfair to customers who have paid on time.
But more damagingly, this situation can instill fear, distrust, and frustration into customers, which can make them more reluctant to pay you. This is turn can negatively impact your AR Turnover and DSO, increase your client churn rate, and stifle growth.
However, embracing customer self-service AR tools like an online payment portal encourages faster payment by making bill payment painless experience. This’ll allow your company to uphold its reputation as a reliable supplier and avoid any AR-related disasters.
VersaPay ARC’s self-service options allow you to put your customers in the driving seat of your collections process and provide a great customer experience that gets you paid in a fast, easy, and secure way! Are your collections sluggish? Find out how VersaPay can get your AR processes back on form.
Customer experience is the key
With overdue payments posing a significant threat to even well-established companies, implementing customer self-service in AR processes is fast becoming a necessity rather than an option.
But one thing is clear, providing a frictionless customer experience in your collections process is key to enhancing your customer experience to ensure you get paid on time, every time.
That’s why implementing customer-centric AR tools like VersaPay ARC shift the odds of getting paid in your favor. Our ground-breaking software makes it simpler for customers to pay you by providing the flexibility and speed of service customers have come to expect in today’s competitive, digital market.
This tool also positively affects metrics like your revenue, DSO, and working capital, providing you with the resources to grow.
Don’t fall foul to the deathly slow ways of collecting payments still used in AR today. Make your customers a priority and get your collections process back on track, using VersaPay ARC as your vehicle of choice.
Want to learn more? Click here to uncover how VersaPay can help revolutionize your AR collections process.