The future of accounts receivable is customer-focused—is your company ready?

George Green
Future of AR

96% of customers are ready to leave organizations for bad service. Today, companies are reimagining their entire business.

In the last 18 months when businesses faced a liquidity crisis, the accounts receivable function became more critical than ever before. Companies with an efficient cash conversion cycle were in a stronger position to manage through the economic downturn.

Maintaining this during the pandemic was a huge challenge. The global pivot to remote work did more than just reveal paper-based AR problems. It highlighted the outdated methods teams use to engage with customers and collect payments from them.

During COVID-19, 54% of companies experienced late payments. Of course, this was partly due to customers struggling to manage their cash flow. However, a significant factor was the lack of customer-centric tools within the traditional AR process. Customers now expect more when it comes to making payments. When faced with newly perceived challenges such as  limited account visibility or a lack of payment options, this affects their ability—and willingness—to pay on time.

Today, AR is undergoing a transformation with 93% of CFOs digitizing operations. The pandemic has inspired an overhaul of traditional invoicing and payment practices. It's not only the scale of digitization that's remarkable. It's the impetus. 96% of the CFOs surveyed are making these investments to benefit their customers.

The Customer-Centric CFO

CFOs manage the “back office” which is commonly described as non-customer facing. This term has negatively impacted organizations for years by implying that this business area does not play as important a role in customer experience.

However, times are changing. In a 2021 Harvard Business Review Survey of over 1000 executives, 58% of respondents said that finance leaders are now players on their organization’s customer experience team. This is perhaps unsurprising when you look at the business case. Deloitte found that customer-centric companies are 60% more profitable, while Forrester discovered that brands with a superior customer experience bring in 5.7 times more revenue.

Given the significant number of touchpoints accounts receivable professionals have with customers, it makes sense that customer experience is becoming a back office priority. Let’s examine three key ways AR teams can better accommodate their customers.

customer-centric

Deloitte found that customer-centric companies are 60% more profitable

Give Your Customers More Control

A fundamental issue with the traditional AR payment experience is the lack of convenient payment options for customers. Checks are still the primary payment method in B2B payments, accounting for 40% of all transactions. This is largely due to the simple fact that many firms are more familiar with this payment method and are likely to use it despite its drawbacks.

One way to manage this challenge is rather than replacing checks entirely, businesses can incorporate digital methods into the mix alongside the check-based options. By providing customers with a range of payment options, from checks to credit cards, accounts receivable teams can directly influence their likelihood of being paid on time or even early. YayPay works with REPAY to provide customers with real-time electronic payment methods. These simplify the payment experience by removing obstacles. This not only accelerates how quickly customers pay but also makes them happier to do so.

digital payment method

Incorporate digital methods into the mix to accelerate your customers' payment speed

Encourage Customer Loyalty 

Cloud-based customer portals are a feature of modern accounts receivable systems that enhance the customer experience. These provide customers with self-service capabilities, allowing them to access account details such as payments owed, outstanding credits and deductions. They also enable customers to settle their debts how and when they want through multiple digital payment channels.

In Forrester Consulting’s study on YayPay, it was found that organizations using the platform saved 16 minutes on each B2B payment collection. The customer portal not only saves businesses time as they no longer have to take phone calls or respond to emails to manage the payment process. It also increases customer loyalty as their needs are better met. This translates into stability in a company's customer base and provides an opportunity to build a larger footprint inside accounts.

Self-service capabilities

Self-service capabilities improve customer loyalty and satisfaction

Create An Open Dialogue

Every B2B customer is also a B2C consumer in their daily lives. In a CNBC study, it was found that Americans spend up to $164.55 every day. This total cost comprises multiple payments and these are typically simple, streamlined experiences. For example, in eCommerce instances, we value the simplicity of live chat functions to discuss concerns and resolve disputes immediately.

This stands in stark contrast to B2B payment experiences. Customers find it difficult to contact accounts receivable teams and regularly have to go back and forth to achieve clarity. To match the B2C experience, organizations need AR solutions that enable two-way, recorded communication and encourage a company and its customers to interact productively.

YayPay’s customer portal allows customers to contact AR teams quickly and easily. When queries are submitted, they are automatically assigned to the correct contact. There is no back and forth required to establish details before a resolution can be reached as the conversation is tied to the specific account and invoice. This saves time for everyone.

 

Today, the most competitive organizations are reimagining their entire business through the lens of experience. With 96% of customers ready to leave organizations for bad service, it's no wonder that companies are taking this seriously. 

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