24/07/2024 9:58 AM


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from digitization to complete transformation

90% of mid-market enterprises are now digitizing their accounts receivable (AR) processes. But digitization and traditional AR automation alone aren’t enough to solve for businesses’ most important stakeholder—their customer.

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Accounts Receivable: from digitization to complete transformation

Craig O’Neill, CEO at Versapay, discusses why mid-market enterprises need to transform their AR function to bridge the gap between a company and its customers.

Mid-market enterprises are the backbone of the North American economy, responsible for more than $4.54 trillion in payments volume annually[1].

As the digital revolution continues, these companies are recognizing the benefits of digitizing their AR processes – a welcome development, given the advantages in terms of reduced cost, fewer errors, faster processing and better dialog with customers that stem from the adoption of digital invoicing, processing and payment.

As we argue in our new white paper, however, mid-market enterprises should be going beyond digitization. And that means adopting a new, collaborative approach to AR that will transform their accounting procedures, reduce risk, drive efficiencies and accelerate their growth potential.

Doing so will deliver a quantum difference in terms of efficiency, productivity, ease of payments, improved cash flow, and customer experience. What’s more, mid-market enterprises will also free up existing AR personnel to perform work that’s more strategic and has greater impact, and offering better career prospects.

Digital transformation: a launch pad for growth

A number of sectors are shifting to vastly more efficient business processes as part of the digital revolution. Consider retail banking, currently in full transformation from a branch-and-internet model to a fully digital, mobile business.

In our white paper, “Transform accounts receivable for massive efficiency gains”, we argue that adopting a fully digital, collaborative AR platform can enable a business to turbo-charge its capacity for cloud-based, collaborative relationships with its customers—rather than simply digitize existing processes.

By giving customers and internal AR staff the same level of visibility in terms of invoices, supporting information, disputes and forward planning, companies can reach new levels of communication and collaboration with their customers.

When customers and staff share the same levels of information, exceptional customer experiences happen, and huge improvements are delivered in terms of reduced cost, improved efficiency and dramatically lower error rates.

A next-generation approach to AR

Alongside this vision, our new white paper sets out some of the more concrete benefits of a transformative approach to AR. By using a cloud-enabled, collaborative platform, mid-market enterprises can reduce chargebacks and lower the risk of late, inaccurate or unpaid invoices via an analysis of customer payment patterns on a case-by-case basis.

They can also use rich data harvested from fully digital AR systems to improve their resource planning, identifying seasonal and cyclical patterns in revenue, average payment times and delinquency rates. Among the many other benefits, working with a cloud-based, fully digital AR system, which includes functionality such as automated reminders to pay, has the potential to reduce past-due invoices by 50%.

Recent IMF projections[2] predict economic growth for the US and Canada at an average of between five and six percent over the next two to three years, among the highest growth rates seen since World War II. Taking full advantage of this growth potential will require back-office functions such as invoicing and AR to be completely transformed.

In doing so, such functions will move closer to front-office endeavors, becoming strategic drivers that directly influence the customer experience and enhance cash flow.

An enterprise-wide, approach to the fully digital automation of AR represents the best opportunity for mid-market enterprises to re-tool their business for the digital era.

Full-scale automation offers not just an opportunity to reduce costs and improve efficiency while improving the customer experience: it also promises enhanced communication, better collaboration, and richer data to inform management strategies for accelerated cash flow and profitability.

To learn more about the benefits of a transformative approach to AR, download our white paper, “Transform accounts receivable for massive efficiency gains”.

[1] See: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-services/us-fsi-b2b-payments-untapped-opportunity.pdf

[2] See NASDAQ.com, 27 July 2021: https://www.nasdaq.com/articles/imf-raises-global-growth-forecast-for-next-year-2021-07-27


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