Cash flow is crucial to any B2B company. Making a profit isn’t enough if your cash flow is so weak that it makes meeting overhead costs difficult.
High operating expenses, excessive inventory, and low sales can cripple cash flow. A chief culprit, however, may be your manual AR (accounts receivable) process. Doing AR by hand can extend DSO (Days Sales Outstanding) — the time it takes you to get paid — by days or even weeks, leaving money to stagnate when it could be used for hiring talented staff or ramping up marketing efforts.
Not sure if your AR process is the problem? This blog lists five signs that it may be.
Do you know how many invoices are outstanding? Or which customers routinely pay past due? And do you know your DSO? Accurate cash flow management is impossible if you can’t answer any of these questions.
AR automation doesn’t just automatically spit out invoices — it offers full transparency of your entire process. You can see, in real time, which invoices have been paid, and which customers are outstanding, along with 18 months of their buying history. Coupled with AI (artificial intelligence), AR automation can even forecast when payments are going to be late, enabling you to reach out and assist a struggling customer or predict when a slow season is on the horizon. That way, you can plan accordingly and put aside additional funds.
Some platforms even offer up-to-the-minute updates on crucial metrics like DSO and AR aging. Not only does AR automation strengthen cash flow, but it provides the tools you need to accurately manage it and use it when making important business decisions.
2. You spend hours chasing payments
Late payments don’t just hurt your bottom line. They create a high-stress environment and force employees to spend too much time chasing and less on servicing customers.
With AR automation, you and your team can be proactive by setting up customized workflows and sending tailored payment alerts to whomever, whenever, and how often you choose. You can target specific customers without bothering your prompt-paying buyers.
Rather than having to make uncomfortable phone calls to customers who’ve missed payments, you can seamlessly send these gentle reminders about upcoming due dates. You get paid on time — or even early, depending on how far in advance you send the reminders — while your staff won’t have to waste hours of their week running down delinquent customers.
3. Your customers grumble about the payment process
More than 70% of today’s B2B buyers were born after 1980. They have come to expect simple, one-click payment processes. They don’t want to waste time digging through emails or re-entering their information whenever a payment is due. Friction like this rankles customers and delays payment.
Today’s buyers prefer making digital payments that are done with ease through AR automation. Customers have access to self-service portals where they can set up, manage, and securely store banking and credit card information inside a digital wallet. Paying bills becomes as simple as literally clicking a button, enabling your customers to make prompt payments that drive down your DSO and spike cash flow.
4. Your process is scattered
A manual AR process is typically divided among multiple spreadsheets, binders, and PCs. This makes it impossible to find information or answer questions in a timely manner. It also creates friction when reconciling payments. Customers can pay you on time, all the time — but your cash flow takes a hit if those payments aren’t reconciled correctly.
AR automation automatically reconciles payments and matches them up with the correct invoice, removing several time-consuming manual steps and accelerating cash flow. Everything is stored inside a secure, cloud-based platform and placed at your fingertips whenever you need it. No more wading through reams of paper or getting locked out of a file because the only employee with the password is on vacation 2,000 miles away. Also, no more friction clogging cash flow.
5. You’re way too reliant on checks
Check fraud continues to escalate, yet checks remain a popular form of payment. Nothing puts the brakes on cash flow like checks, which take days or even weeks to arrive and clear. They also set you and your customers up for check fraud.
Providing customers with multiple payment options is the best way to eliminate check usage, accelerate collections, and ultimately, supercharge cash flow. AR automation makes it easy for customers to pay digitally through ACH and with credit cards, payment methods that are far more secure and speedier than paying with a check.
Give Cash Flow a Jolt with Bill360
AR automation from Bill360 fuels cash flow by eliminating clunky, manual processes. Our innovative platform combines payment-ready e-invoicing, auto reconciliation, and payment processing to get our clients paid an average of 36% faster than their current process. Faster payments result in stronger cash flow, which is easy to manage thanks to our dashboard that gives you up-to-the-minute status on key metrics like AR aging and DSO.
Bill360 eliminates the friction that stalls cash flow, enabling you to access the money you need to grow your company and sustain long-term success.
Looking to improve your cash flow? Download our Software Evaluation Toolkit that features interactive worksheets, checklists, and a step-by-step process to ensure you choose the automation platform that best suits your B2B.