Revenue figures are great to flaunt, profits offer a peace of mind, but it’s only a stable, reliable cash flow that truly demonstrates the success of an enterprise. Hence the adage “Cash is King.” Read this blog to learn how technologies such as AI-powered digital assistants and modern payment & customer portals can auto-pilot a large portion of customer-initiated payments to accelerate cash flow while reducing collection costs.
Much of accounts receivable education is focused on efficient collection efforts to ensure a steady cash flow by facilitating on-time customer-initiated payments. However collection efforts usually require a significant number of follow-ups, which often becomes painstaking for the collection staff.
Advancements in technology can enable your business to receive payments earlier from many of your customers without engaging in collection activities. Maximizing the number of customers who pay on-time of their own volition (on-time customer-initiated payments) will increase cash flow and reduce collection cost.
On-time Customer-initiated Payments – Beyond Invoice Accuracy
The American Productivity & Quality Center (APQC) has found that companies in the top quartile of invoicing accuracy are paid, on average, 19 days earlier than those in the bottom quartile. That accelerates cash flow, enhances the customer experience, and reduces collection cost. However, facilitation of on-time customer-initiated payments depends on more than just invoicing accuracy. It is also dependent on:
Perfect Order Fulfillment: A perfect order can be defined as the one that delivers the right product, right quantity, to the right location, on time in an undamaged form with accurate invoicing. Perfect order fulfillment eliminates legitimate reasons to delay payment. An incorrectly fulfilled order (wrong or damaged products, wrong quantity etc.) or an inaccurate invoice gives a customer a valid reason to delay payment.
Invoicing: An accurate invoice will promote on-time payment. In addition to an accurate invoice, it should also be submitted in the requested delivery mode (electronic vs paper, posted vs vendor portal), with all requested information (PO #, description of product/service, sales tax, accounting codes, etc.), in the format requested (e.g., PO # in upper left, amount due in the lower right, etc.)
Multi-Payment Types: Accommodating a wide range of payment modes—including the large number of digital payment gateways that have emerged recently—makes it easy for customers to pay you. While customers can pay through the mode of their choice, there is no harm in influencing them to pay in a mode that is less expensive for you to receive and process. The best example of this is Automated Clearing House (ACH) payments, which incur the lowest bank fees for the recipient’s lock box charges.
Self-Service Portals: A self-service portal empowers customers to find answers to their questions without having to reach out to you for help. It’s faster and easier than calling a customer service representative, and provides customers the flexibility to deal with a problem on their schedule with zero wait time. They even enable customers to pay whenever they want without being constrained to business hours. Emagia’s Electronic Invoice Presentment and Payment (EIPP) portal is one such self-service portal that can boost outreach and customer experience while cutting down customer service costs by up to 80%.
Speeding up Invoice Delivery and Accepting Payments using AI
While sound processes are a major determinant of the above attributes, technology plays a huge role as well. The right technology is required to customize invoices and deliver them electronically, to accept payments in a wide range of modes, and to provide a full-function Self-Service Customer Portal. This technology utilizes Artificial Intelligence Digital Assistants and is modest in its cost and implementation challenge. Emagia’s Accounts Receivable Automation solution can provide this technology to accelerate cash flow and minimize the manual touch points.
Put your customers’ payments on auto-pilot and reap benefits such as:
- Accelerated cash flow
- Enhanced customer service
- Reduced collection cost
- Reduced credit risk
- Increased revenue and profits