Recession headwinds call for focus on Account Receivables

19 June 2023

Maintaining a healthy cash flow has become more important in the current economic landscape. However, performing the essential functions of accounts receivables can really bog down businesses, making it important to prioritize efficiency.

In order to promote growth, it is essential for your business to prioritize accounts receivables. This blog will cover the following topics:

  • The importance of efficient cash flow management for b2b businesses
  • Streamlining payment processing to focus on business growth
  • Final thoughts: recession headwinds call for focus on account receivables

The Importance of Efficient Cash Flow Management for B2B Businesses

Consider this, the B2B sector that has a monumental impact on the overall financial health of the economy with about $25 trillion in commercial payments each year, but their outdated manual payments system stifles cash flow and hinders growth. Highlighting a greater need to improve cash flow management.

Outdated Manual Payment Systems Stifle Cash Flow and Hinder Growth

On an average, it takes 10 days for any business to process a single invoice, which can delay receiving payment up to 30 days or more. The finance teams often struggle with remittance, map checks, manual processes, and so on. According to an APQC study, businesses that use electronic invoice lines for 80% or more of their invoices have considerably lower days sales outstanding (30 days) whereas those that only send 20% or less of their invoices electronically have 55 days.

Accounts Receivable (AR) management is a crucial aspect of operating a successful omnichannel business. However, hiring and training an Accounts Receivable team can be a lengthy and costly process. When businesses are grappling with the unpredictable economic climate, it becomes challenging for them to invest substantial sums into improving their processes. That said, cash flow management is critical for the survival and growth of any business.

B2B finance is more complex than B2C.

Larger orders, deeper customer relationships, various terms of payment, etc. making a digital overhaul that much more difficult for B2B businesses. Integrated payment systems take the complexity out of those time-consuming and cumbersome tasks and create a simplified, automated payment process, easing the workload for businesses. However, it is crucial to identify the right payment solution that resonates with your business needs, while custom and scalable integrated payment solutions are ideal, they can be costly and beyond the reach of many businesses. This presents a major challenge for businesses that are looking to improve their payment processing.

Streamlining Payment Processing to Focus on Business Growth

Since maintaining a large AR team to manage cash flow is no longer feasible and custom-developed solutions can be cost-prohibitive, businesses need a solution that is user-friendly, secure, integrated with their existing Enterprise Resource Planning (ERP) system, and reasonably priced. The solution must also be able to provide immediate actionable results, without the need for downtime for setup.

Leveraging Integrated Payment Solutions for Cost Efficiency and Actionable Results

Fortunately, there are solutions available in the market that start from as little as $45/month, offering seamless integration, user-friendliness, security, and quick deployment. While they may not be as comprehensive as custom-built payment solutions, they can automate costly AR manual processes, lower merchant account fees, shorten account reconciliation time, gain operational efficiency, and enhance customer experience, with –

  • Automation through ERP integration – The real-time communication between your payment solution and your ERP ensures speed and accuracy on every transaction with amounts and their journal entries are all automatically taken care of.
  • 24/7 payments – Empowering your customers with the freedom to pay their bills online 24/7 using the payment portal without any support needed from your end.
  • Versatile payment methods – Enabling you to accept all major credit cards, ACH/EFT, credit memos, even general payment unassociated to an invoice.
  • PCI secure – With all transactions processed in PCI Level 1 Certified private cloud environment and use AVS/CV2 validation to ensure the security of your customers’ cardholder data.
  • Access to detailed reports – Offering data at your fingertips, including access electronic transaction reports

Final Thoughts: Recession headwinds call for focus on Account Receivables

The importance of efficient cash flow management cannot be overstated. The B2B sector is a crucial component of the economy, and outdated manual payments systems are holding it back. Businesses of the future should look for such solutions that have already incorporated the necessary capabilities, and are easy to integrate into their existing ERP systems. An integrated payment solution is an essential tool for any omnichannel business, and businesses should leverage solutions that can provide immediate actionable results and cost efficiency without the need for downtime for set up. Choosing the right solution can allow businesses to streamline their payment processing and manage their cash flow effectively, enabling them to focus on growing their business.