4 Steps For Turning Accounts Receivable Into a Strategic Growth Driver

On paper, accounts receivable (AR) is one of your largest assets. But how long does it typically take for you to have that cash in pocket?

A lengthy cash conversion cycle not only spells trouble for paying your business’ regular expenses but it also inhibits your ability to grow. Fast-growing companies need quick access to cash to fund expansion into new regions, hiring of additional staff, and research and development efforts.

A new report from the International Data Corporation (IDC) titled “It’s Time to Transform Accounts Receivable” shows how overhauling traditional AR processes with cloud-based technology leads to unlocking working capital faster, so you can invest it where it matters.

In this blog, we’ll break down four strategies IDC highlights for improving processes that would otherwise leave cash tied up in operations for extended periods of time, helping you accelerate cash conversion.

1. Understand Your Customer

Miscommunications and customer disputes can cost you precious time when awaiting payment on receivables. Sometimes discounts promised to customers by sales reps aren’t reflected on their invoices or goods can arrive damaged. Straightening out these kinds of issues via phone or email can mean weeks go by before customers are prepared to pay.

Collaborating with your customers more directly can clear up miscommunications before they become disputes and make it easier to get to the root cause of an issue. An AR automation solution that provides customers with an online portal enables this level of bi-directional communication. Customers can view invoices on their own time and leave comments directly on those invoices when they have a concern. That way, your team never has to search for the context of an issue and can quickly resolve problems that hold up payment.

Engaging with your customers this closely can also help you spot recurring issues in your processes that contribute to late payments, so you can make changes that’ll positively influence future payment behavior.

2. Know Your Process

In order to optimize your AR process, you should first know exactly what’s currently involved in it. This sounds simple enough, but when finance teams operate with a high degree of manual work, having visibility into the status of all their receivables becomes difficult.

Beyond just being irksome for your team, manual AR processes hurt your cash flow. A recent report from PYMNTS.com found that businesses that rely on manual AR processes tend to have 30% longer average DSO compared to those with medium to high levels of AR automation.

Centralizing your AR operations in one location with cloud-based software gives everyone on your team an easy way to understand where each account stands and at what stage a delay might be occurring.

3. Control Your Cash

Unifying all your data on customer accounts and the status of receivables in one place through an AR automation platform also gives you easy access to the insights you need to accurately manage cash. When your AR platform syncs in real time with your ERP, you can be sure you’re basing decisions off the most accurate data when aiming to optimize working capital. 

Many AR automation platforms offer advanced analytics capabilities, aggregating all-important metrics like DSO in one convenient dashboard. Instead of having to refer to multiple sources to pull reports that inevitably get stale the moment you export them, you can get everything distilled in one real-time view. A simpler data measurement process makes it easier for you when reporting to executive leadership, which concern over the economic downturn likely has you doing more frequently.

4. Make Your Customers Happy

One often overlooked way to accelerate payment times is to focus on your customers’ experience. With the barrier to switching suppliers getting lower and lower in most industries, every aspect of the customer experience counts—and that includes the billing and payment processes. Research from American Express points to the fact that for 33% of American customers, it only takes one negative experience to get them to consider switching their service provider.

By giving your customers a better billing and payment experience, you motivate them to pay you faster. For instance, think about the invoice delivery and payment methods you currently support. Are these the channels that your customers want to be receiving invoices and making payments through or are they simply the most convenient options for you? If it’s the latter, you have a clear opportunity to better serve your customers.

Shifting your mindset from supplier-centric (what’s best for you) to customer-centric (what’s best for your customers) means giving customers flexible options for receiving their invoices and making payments. When customers are given the convenient experience they want, they’ll happily pay you faster, contributing to shorter cash conversion cycles.

Turning Unlocked Cash Into Growth

Improving the speed with which you collect receivables, paired with an effective working capital management strategy, allows you to take advantage of opportunities to invest in your business’ growth and innovation. By automating traditionally time-intensive and people-intensive accounts receivable tasks, you can reduce expenses by avoiding the need for additional headcount and direct your team’s efforts to projects that bring the highest value to your organization.

For more practical insights on how you can transform your AR processes to optimize cash flow and increase operational efficiency, you can download IDC’s report “It’s Time to Transform Accounts Receivable” for free here.

It's Time to Transform Accounts Receivable

Shopping Small: How We Partnered With Batch This Past Holiday Season

As we all know, the past year has been a particularly challenging one for small businesses. Research from McKinsey & Company published in June 2020 found that of the small businesses they surveyed, between 1.4 million and 2.1 million (25%–36%) of them were at risk of closing permanently as a result of the early impacts of COVID-19.

The shop small movement has been around since long before the pandemic began, but it’s been great to see it pick up momentum recently as small businesses need support now more than ever. In this spirit, we wanted to take a moment to shout out one of our own small business clients and maybe introduce you to a new favorite #shopsmall gem.

This past holiday season we wanted to support a small business when organizing gifts for our partners—and what better place to look than within our own client base. Instead of using a massive retailer to send out our company gifts this year, we worked with one of our clients, Batch, to deliver holiday gifts to our value added reseller (VAR) partners.

Batch is a small retailer based in Nashville, founded in 2013 by friends Sam Davidson, Stephen Moseley, and Rob Williams. Batch offers handcrafted locally made gifts ranging from sweets and treats to apparel, and much more! Although they’re small, Batch offers a surprising variety of products, selling over 1,000 different items including unique finds from iconic cities across North America.

Delicious s’mores kit, courtesy of Batch!

Working with Batch was a great experience for us, as the whole process was smooth and convenient. We loved being able to spread holiday cheer and show our gratitude to our partners, all while supporting our own client.

Batch and Versapay

How did Batch become a Versapay client? Batch was referred to us by a partner and after conversations with their CEO Sam Davidson, we discovered there was an opportunity for us to help them save on card processing costs and streamline their processes.

Batch now uses Versapay’s Solupay for NetSuite payment acceptance solution, integrated with their ecommerce platform. “The integration is seamless, saving me time in reconciling payments and doing financials,” says Sam.

At Versapay, we aim to improve the way businesses work together by minimizing manual processes, reducing costs, eliminating fraud, and increasing sales. As we’ve been able to do with Batch this year, we strongly believe in being a partner to all our clients and supporting them beyond what we do for them day to day.

With all that has been happening in the world since the COVID-19 pandemic began last year, there’s no better time to shine the light on small businesses. We encourage you to think about how you can support small businesses in your own local community!

What is DSO and Why is it the Lifeline for Accounts Receivable?

Picture an astronaut floating in space. What’s the one thing keeping them alive?

You guessed it, it’s a steady supply of oxygen. Just like an astronaut needs oxygen, a business needs cash to survive.

For companies that make a considerable amount of their sales on credit, Days Sales Outstanding (DSO) is a pretty good indicator of the business’ cash availability and overall financial health. Keeping a close eye on DSO and its trends is essential for any finance team in monitoring and managing the business’ cash flow.

What Does Outstanding Receivables Mean?

Outstanding receivables refers to the debt owed to a company when they’ve provided a product or service but accept payment from a customer later. Since accounts receivable will be converted to cash, it’s considered a short-term asset on the balance sheet.

What Is Days Sales Outstanding (DSO) and Why Does It Matter So Much?

DSO (also referred to as the average collection period or days receivables) helps finance leaders understand the average number of days it takes to receive payment after a sale is made. A low DSO means that it takes your company a reasonably short time to collect payment while a high DSO means that it takes your company longer.

Not only is DSO a measurement of how long it takes to receive payment, but it’s also a reflection of customer satisfaction, customers’ credit worthiness, and the effectiveness of your collections team. (More on this later.)

With the economic pressures of the pandemic, C-suite leaders now lean on their finance team’s guidance more than they did before to inform their decision making. A Gartner survey from April 2020 found that 70% of finance leaders were conducting cash flow forecasts more frequently and 75% were reporting to their C-suite at least once a week.

With so many insights coming from this one metric, you’ll want to have easy access to this data, letting you report on the status of receivables efficiently and accurately to leadership. You can track DSO proactively and automatically with accounts receivable software, meaning less work for you.

How Do You Calculate DSO?

If you want to calculate DSO manually, here’s how to do it. For the period you’re calculating (a single month for instance) you’ll need to divide total receivables due by the total sales you’ve made on credit and multiply this by the number of days. The formula looks like this.

Days Sales Outstanding equals Accounts Receivable divided by Total Credit Sales, times the number of days

How Do You Calculate DSO for 3 Months?

For businesses with seasonal sales or fluctuating sales month over month, calculating your DSO over the course of a quarter instead of a month is a great way to normalize your data and see trends over time. If you want to calculate your DSO for the quarter, take your total receivables for those 3 months divided by total credit sales during that period and multiply this by 90.

Days Sales Outstanding for three months equals Accounts Receivable divided by Total Credit Sales, times 90 days

What Is a Good DSO?

According to the Credit Research Foundation’s National Summary of Domestic Trade Receivables, the average DSO in Q2 of 2020 was 41.56 days. In general, anything below 45 days is considered to be a low DSO. But since DSO ranges wildly from industry to industry and from business to business, it’s a good idea to look at companies that are within your industry and have similar terms to see how you compare. To get a full picture of your company’s operations, it’s best to look at trends in your DSO rather than focus only on the number itself.

What Could Be Causing a High DSO?

There are a couple reasons your DSO could be trending higher. It could be an indication that customer satisfaction is low and as a result, customers are taking their time to pay you—or aren’t paying. In the case of the latter, it could be that your sales team is extending credit to customers they shouldn’t.

A higher DSO could also be a result of inefficient collections processes. Getting away from highly manual accounts receivable processes in favor of automation reduces the length of the cash conversion cycle significantly. PYMNTS.com’s recent B2B Payments Innovation Readiness report found that businesses that rely on manual AR processes tend to have 30% longer average DSO compared to those with medium to high levels of AR automation.

5 Strategies for Improving DSO

Here are some strategies you can use to reduce DSO:

1. Make it easy for customers to know what they owe—Giving customers visibility into all their current and past invoices makes it much easier for them to know exactly what they owe and when payment is due.

2. Get paid faster by embracing digital payments—Accepting digital payments means no more waiting on checks to arrive. When made through an online portal, digital payments also eliminate the issue of cash getting tied up in the process of matching payments with open AR, since remittance data is captured at the time a payment is made. Dollars and data move together.

3. Incentivize early payments with discountsDiscounts can be a great way to incentivize customers to pay you early. But, as managing which customers are eligible for discounts and accounting for them later can be a nightmare, teams are often hesitant to use them. The right AR platform with built-in tools to help you collaborate with your customers can eliminate this block, as you’re able to communicate discounts to a targeted selection of customers and even require a specified reason for the discount when payment is made.

4. Automate payment reminders—Send customers personalized notifications and reminders on when it’s time to pay. Nudging your customers in this way both saves your team time and preserves customer relationships by avoiding what could become confrontational collections calls.

5. Set customers up with autopay—You can make the payment experience even more convenient for customers when you introduce the option to set up autopay. With payments being made from their account on a set timeline automatically, customers have less to think about and you know for sure you’ll be paid on time.

A modern AR Platform can be your business’ lifeline when it comes to staying on top of outstanding accounts receivable and maintaining control of your cash position. Interested in learning about Versapay’s AR solutions? Find more details here.

2020 Wrapped Up: Growing and Innovating Through a Challenging Year

As we near the end of 2020, like us we’re sure you’re experiencing a lot of mixed feelings. This year has seen us through some unprecedented challenges as we’ve navigated a global pandemic, a social revolution, and a new culture of remote work.

Against the backdrop of these obstacles though, it’s been incredible to witness the resilience of our clients and team. We’ve seen our clients support their customers through making the shift to remote working and we’ve seen our growing Versateam masterfully manage both work and home as those worlds collided.

To finish the year off with some levity, we thought we’d share some of the bright spots from 2020.

How Has Accounts Receivable Changed This Year?

From the challenges businesses have had to face this year, more finance teams are finally modernizing their accounts receivable processes and increasing their acceptance of digital payments.

COVID-19 put into perspective just how impractical manual and paper-based AR processes are, especially as teams made the switch to working from home. With no one in office, who’s going to print and mail out invoices and process checks?

A recent report from PYMNTS.com found that 83% of businesses reported having changed their AR processes since the pandemic began, with 83.1% of firms using tech to manage their AR at a high level accepting more digital payments than they were before COVID-19.

The past year has also made businesses reflect more on the importance of customer experience, as providing online channels for billing and payment experiences became non-negotiable. While ecommerce used to be regarded as a channel for lower value purchases, the pandemic has made B2B buyers even more comfortable making big purchases in an online environment.

A report from McKinsey & Company found that 70% of B2B decision makers reported being open to making purchases well over $50,000 in a fully self-serve or remote capacity.

Embracing digital payments and AR automation means finance teams are unlocking potential for cost savings like 30% DSO reduction and giving customers what they’ve long been asking for—a convenient, online experience.

This Year at Versapay HQ

We started the year off on an exciting note as we went through the final stages of Versapay’s acquisition by Great Hill Partners, a Boston-based technology investment firm. In October, we followed this up by announcing our merger with leading payment services provider Solupay and affiliated companies ChargeLogic and 2CP.

Our coming together means we’re better able to deliver on our goal of simplifying the way buyers and sellers do business together by digitizing the accounts receivable process and simplifying payment acceptance.

Merging with Solupay has also meant that we’ve grown from a team of ~100 employees to over 200 and counting. This year we brought on 100 new hires, 92 of whom have never set foot in a Versapay office.

We were pleased to see Versapay recognized for the first time on both Deloitte’s Technology Fast 500 and Fast 50 lists, honoring the fastest growing and most innovative tech companies in North America and Canada respectively. We were also named a Leader for the second time in the IDC MarketScape for Worldwide SaaS and Cloud-Enabled Midmarket Accounts Receivable Automation Software.

Our Clients

In 2020 our network of clients served has grown by the thousands, connecting us to 500,000+ end customers. We onboarded some stellar new clients this year, including Dream Office, Amer Sports, and TireHub. Through Versapay, our clients created millions of invoices and processed payments collectively totaling $12 billion.

During the onset of the pandemic, we worked with our clients on ways to support them and their customers. For instance, we:

  • Helped our clients quickly pivot to accept credit card payments as their customers needed ways to pay remotely
  • Enabled clients to give their customers a financial break by waiving convenience fees at a time when the future for many small businesses was uncertain
  • Accelerated the testing and roll-out of pre-payments and initial deposits for more clients, allowing them to accept more payments faster and provide their customers with more flexibility

We were moved to see how a few of our clients went even further to support their customers and first responders through COVID-19.

Kite Realty Group launched a small business loan program aimed at local small shop tenants. To communicate the availability of this program to all their tenants, Kite Realty used the Marketing Message feature in ARC, sending two email blasts to all active tenants.

Bedford Industries, a manufacturer of packaging solutions using Versapay’s Solupay for NetSuite solution, shifted from making twist ties to face shields during COVID-19. Bedford already manufactured the nose wires that go into medical masks and on seeing the dire need on the front lines for Personal Protective Equipment (PPE) decided to start making plastic face shields. To quickly get up and running shipping out the face shields and accepting payments, Bedford looked to NetSuite and Solupay to build their ecommerce instance.

A Year of Exciting New Features

This year we released several enhancements to our ARC solution. Here are our clients’ top 3 favorites:

  • Electronic Cash on Delivery: Cash on Delivery (COD) has traditionally involved a lot of challenges for distributors, from applying cash payments to open invoices to the logistics of collecting payment at the time of delivery. We’ve tackled these challenges by giving COD customers a way to store their preferred payment method and automating the invoicing, payment, and application of payment the moment an order is requested.
  • Discount Management: Our discount management features make it easier to communicate discount terms to customers via their invoice, the ARC portal, or email and tie them to specific payment methods. We’ve made it easy for customers to take advantage of early payment incentives and eliminated the potential for unearned discounts. Reconciliation is automated so you have complete transparency into which discounts are used and why.
  • Document Manager: With this new feature, we’ve made it easy for you to securely share documents, marketing messages, memos, and other communications with your customers all in one place—and know when they’ve been viewed.

What’s Ahead in 2021?

We know there are many challenges that complicate payment acceptance for B2B companies, preventing them from delivering exceptional billing and payment experiences to their customers. We’re committed to tackling these issues one by one to simplify the entire order to cash process for buyers and sellers.

As remote work and social distancing will continue well into 2021, we’ll be focused on supporting businesses as they make the shift to digital payments and modernize their AR processes to match. Although 2020 has been challenging, it’s also been a milestone year for Versapay. We’re grateful to our clients, partners, and team who drive us forward in everything we do, and we’re optimistic for what the next year will bring in the world of B2B payments. Will you come along for the ride?

Versapay Again Named a Leader in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Midmarket Accounts Receivable Automation Software

Toronto, ON—December 17, 2020—Versapay Corporation, the leader in Customer-Centric Order-to-Cash solutions, has been named a Leader in the recently published IDC MarketScape: Worldwide SaaS and Cloud-Enabled Midmarket Accounts Receivable Automation Software 2020-2021 Vendor Assessment, December 2020, IDC#US47032320.

The report highlights Versapay’s strengths in collections and analytics, self-service and collaboration, and payments, stating: “The platform consistently achieves strong buyer adoption and drives material savings for suppliers through faster payment, reduced processing costs, removal of manual processes, and customer self-service.”

“The events of the past year have made it clear just how critical convenience and digitization are in creating strong customer experiences,” stated Kevin Permenter, Senior Research Analyst, IDC. “Forward-thinking companies are transforming their AR processes to remove friction from the billing and payment experience, a goal that Versapay supports.”

“We’re excited to be recognized as a Leader for the second year by IDC MarketScape through their comprehensive market research,” said Craig O’Neill, Chief Executive Officer of Versapay. “We’re focused on simplifying buyers’ and sellers’ experience throughout the entire order-to-cash process, and this report confirms that our customer-centric approach highly resonates with the market.”

Versapay was also named in Deloitte’s 2020 Technology Fast 500 report and recently announced its merger with Solupay, creating a B2B Payments network supporting 500,000 end-customers.

About IDC MarketScape

IDC MarketScape vendor assessment model is designed to provide an overview of the competitive fitness of ICT (information and communications technology) suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each vendor’s position within a given market. IDC MarketScape provides a clear framework in which the product and service offerings, capabilities and strategies, and current and future market success factors of IT and telecommunications vendors can be meaningfully compared. The framework also provides technology buyers with a 360-degree assessment of the strengths and weaknesses of current and prospective vendors.

About Versapay

Versapay is focused on changing the way companies do business together by offering Customer-Centric Order-to-Cash solutions and B2B Payments for mid-market and enterprise businesses. We help our clients offer a superior customer experience, enabling CFOs to accelerate cash conversion, streamline payments, and digitally transform manual business processes. Based in Toronto with offices in Atlanta, Cleveland, Baltimore, and Las Vegas, Versapay is owned by Great Hill Partners, a Boston-based technology investment firm.

How To Make It Through Economic Uncertainty by Digitizing Accounts Receivable

In the last eight months, we’ve all learned that the future is anything but certain.

The economic instability businesses have had to endure due to COVID-19 highlights the need for a predictable cash flow and greater control of working capital. One way you can support this is by optimizing the cash in part of the equation—your accounts receivable (AR).

A new report from the International Data Corporation (IDC) titled “It’s Time to Transform Accounts Receivable” highlights how transforming dated approaches to AR with cloud-based technology can help businesses unlock cash flow and stay resilient to future challenges.

In this blog, we’ll delve into key opportunities IDC highlights for digitizing your AR, and how this can better equip your business to withstand the whims of today’s economy.

Get A Complete Picture of Your AR

As businesses respond to the economic challenges of COVID-19, senior leadership increasingly leans on finance teams to inform their decision making. A Gartner survey from April of this year found that seven out of ten finance leaders reported conducting cash flow forecasts more frequently and 75% of finance leaders stated that they were reporting to the C-Suite at least once a week.

In order to accurately report on your business’ financials, you need a clear view of all your AR activities. For finance teams that refer to multiple data sources—whether it’s your ERP, bank lockboxes, ecommerce sites, or even spreadsheets—this is easier said than done.

When you’re preparing to report to senior leadership, it’s not efficient to have to manually run and export reports from separate platforms to calculate key metrics like DSO.

An AR automation solution with strong reporting capabilities can eliminate this friction and ensure you’re always accessing the most accurate data. Look for a solution that can break down your AR at the company, division, invoice, and line-item levels and puts metrics like DSO and ADP front and center. Integration with your ERP should also be a prominent factor in selecting a vendor.

Focus on High-Value Activities

Having a detailed view of each of your customers’ account standing is particularly helpful for determining where your AR team should spend their time. 

Another way to free up time to connect with the customers that most need follow up is to automate time-consuming collections activities. Instead of calling and emailing customers to check on the status of open invoices, deliver personalized notifications to your customers at various points throughout the collection cycle, reminding them to pay.

In periods of economic uncertainty, CFOs will want to focus their team’s efforts on the activities that drive cash flow optimization. Fast-tracking collections naturally falls into this group of high-value activities and businesses that heavily rely on manual AR processes will struggle to achieve this.

Reduce DSO

Not surprisingly, reducing DSO is a core strategy for maintaining business continuity in periods of uncertainty. Embracing digital transformation is essential for any finance team working towards DSO reduction. PYMNTS.com’s recent B2B Payments Innovation Readiness report found that businesses that rely on manual AR processes tend to have 30% longer average DSO compared to those with medium to high levels of AR automation.

Beyond streamlining your collections activities, there are other ways you can incentivize customers to pay you faster. The first is making it easy for customers to know what they owe you. Offering a variety of invoicing formats like email, within an online portal, or direct to AP portal lets customers choose the option that’s most convenient for them and as a result most likely to get them paying promptly.

The second is making it easy for customers to pay you. B2B buyers increasingly expect their payment experience to mirror what they encounter as consumers—meaning online.

If you’re hesitant to increase your acceptance of digital payments because of high processing fees, there are options that can take care of this concern. Working with a payment processor that provides interchange optimization helps with lowering processing costs, making accepting a high volume of card payments more feasible.

Minimize Workload Without Adding Headcount

Adding headcount to solve operational challenges isn’t practical for many companies right now. With sufficient AR automation though, you can increase efficiency and streamline workflows even with a lean finance team.

A recurring challenge for most AR teams is manually having to match payments with open AR, especially when they come with minimal remittance data. You can automate much of the cash application process with tools for auto-matching like portal crawling, inbox scanning, and OCR for extracting remittance data from your various file types and reconciling it with the appropriate payment.

Getting customers to pay you through an online portal is also a great way to reduce your efforts spent on cash application, given that online payments made through a payment portal capture complete remittance data at the same time.

Maintain Strong Customer Relationships

An area that many businesses tend to overlook that will play a critical role in helping them emerge strong through the economic downturn is customer experience.

If previous crises can offer business leaders any direction on how to handle the current situation, it’s that focusing on customer experience is a winning strategy. Research from Forrester found that during the recession from 2007 to 2009, businesses that led in customer experience had returns that were three times higher than businesses that fell short in this area.

An aspect of your customers’ experience that shouldn’t be ignored is how you bill them and collect payment. With remote work likely being a fixture for most businesses well into 2021, you should make the transition easy on your customers by optimizing how they manage their payments and interact with your AR team.

Giving your customers an online self-service portal empowers them to take control of their account preferences and find any information they might need—anytime, anywhere. An online portal is also a great vehicle for enabling direct communication and collaboration with your team, making it easy for both you and your customers to clear up questions and potential disputes.

Not even the most seasoned forecasters can definitively tell us what to expect as we navigate the economic fallout from COVID-19. But, this doesn’t mean businesses are powerless in the face of uncertainty. Organizations that prioritize transparency, flexibility, and visibility into cash management by transforming their order-to-cash processes will be better prepared to handle whatever comes their way.

For more insights on how digitizing your accounts receivable processes benefits your business and customers, you can download IDC’s report “It’s Time to Transform Accounts Receivable” for free here.

The Top Challenges Accounts Receivable Managers Face Today—And How to Solve Them

Most accounts receivable (AR) professionals would agree that their roles can be pretty tedious. Because many organizations haven’t fully modernized their approaches to AR, these teams are spending a high volume of hours on low-value tasks.

A new report from the International Data Corporation (IDC) titled “It’s Time to Transform Accounts Receivable” puts into perspective just how many obstacles AR pros face, spotlighting issues around processes, systems, and customer experience.

In this blog, we’ll delve into the top challenges IDC highlights as most critical for accounts receivable managers, and most importantly, how you can solve them.

1. Late Payments

The challenge: Making sure the company gets paid on time is the core function of an AR department. When customers pay late, this makes balancing cash and accessing working capital exceptionally difficult. If you have little way of knowing exactly why your customers haven’t paid yet, or why they’ve short paid or taken deductions, then you’ll have difficulty addressing the roadblocks that could be holding up payments from customers who are willing and trying to pay.

The solution: A great place to start is looking at the way you communicate with your customers. In contrast to fielding customers’ questions through phone and email—which can easily be a full-time job in itself—an online portal that lets customers comment on specific invoices and line-item details cuts out this unnecessary back and forth. Your team is then able to answer messages quickly and directly via the portal and never has to search for the context of a particular question.

2. Data Management

The challenge: Between ERPs, bank lockboxes, ecommerce sites, and spreadsheets, AR managers require data from multiple sources. But the more places you pull data from, the more time-consuming a process it is and the likelier you are to get stale or inaccurate data.

The solution: The more you can consolidate your data and give your team a single source of truth for all things AR, the better. One way you can facilitate this is by opting for an order-to-cash solution that integrates directly with your ERP. To account for the complexities of your particular ERP instance, make sure you select a vendor that will partner with you throughout the implementation process and post-launch to ensure all of your systems are integrating smoothly.

3. Time Management

The challenge: There are better uses for your time than resending invoices, calling customers, or sifting through a sea of emails to track down the status of an invoice. With old-school approaches to AR, teams end up spending much of their effort on manual tasks, which could be redirected towards projects that will actually help move the needle for the business.

The solution: Automating key back-office AR functions like invoice delivery and collections task management saves time and reduces your margin of error, meaning you also spend less time troubleshooting.

4. Customer Management

The challenge: Billing and payment are important aspects of the customer experience and AR managers are the face of this part of the journey. Ensuring your customers have a positive experience is particularly important as you navigate the current economic downturn, seeing as a good experience can promote customer retention and even be a competitive differentiator. Traditional approaches to AR tend to be operation-centric rather than customer-centric, meaning teams’ focus is on completing an overwhelming list of day-to-day tasks rather than making sure customers’ needs are met.

The solution: B2B buyers’ expectations are very much informed by their experiences as consumers. Customers are looking for flexibility and convenience in the way they receive invoices and pay you. To deliver on these expectations, you should support a variety of invoice delivery and payment method options and give customers the power to customize their preferences. A self-service customer portal is a great vehicle for this, as it gives customers control of their account 24/7.

5. Payment Management

The challenge: Many AR teams are hesitant to lean into digital payments due to concerns around security, compliance, costs, and cash application. Although card payments, for example, are incredibly convenient for buyers, they often only represent a small portion of businesses’ total payment acceptance volume due to high processing fees.

The solution: You can increase your acceptance of digital payments by working with a payment facilitator that is able to provide lower processing costs thanks to volume pricing and interchange optimization (which is achieved by the processor sending more data through with each transaction, so that issuing banks lower their interchange fees and customers get a rate reduction in turn).

6. Cash Management

The challenge: For AR teams that still accept a high volume of paper checks, cash management remains a big challenge. Checks can take days or weeks to arrive and often with minimal remittance information, making it difficult to reconcile these payments with open AR. With your cash tied up in these lengthy processes, accessing your working capital becomes an issue—one made even more urgent in a turbulent economy.

The solution: You can unlock cashflow by first moving away from accepting checks in favor of online payments made via a payment portal, which can be processed in real-time and capture remittance data at the time of payment—meaning less time spent matching payment to invoice for your team. For the checks that you do accept—and other payment methods where remittance travels separately such as ACH—you can automate cash application with tools for auto-matching (like portal crawling, inbox scanning, and OCR for instance).

Addressing these core challenges positions you for DSO reduction, better visibility into the status of your AR, and improved relationships with customers. Finding an order-to-cash solution that can deliver on all the recommendations outlined above makes your and your team’s lives much easier.

For more insights on how you can benefit from transforming your current approach to AR, you can download IDC’s report “It’s Time to Transform Accounts Receivable” for free here.

It's Time to Transform Accounts Receivable

What Is an Online Invoicing Portal?

When your business sends a lot of invoices, keeping track of the status of all of them can be a tall task. Without adequate follow up, payments become past due and you’re left scouring your emails or calling customers to see where an invoice stands.

Upgrading your invoice delivery process by utilizing a solution that allows you to send and accurately track the status of all your invoices will have you feeling like an all-knowing accounts receivable wizard. And who doesn’t want that?

What Is an Online Invoicing Portal?

Online invoicing software can help you generate invoices for the products or services you provide to customers while also recording each step of the transaction process.

A solution that helps you create and send invoices can reduce much of the strain on your accounts receivable team. Solutions that include a customer-facing portal help customers know exactly what they owe and enable them to gain better control over their accounts. 

Wondering if an online invoicing portal is right for you? Keep reading to find out what implementing an e-invoicing solution entails, how utilizing automation can take your strategy even further, and the impact this has on your business.

How Do I Know If I Need an Online Invoicing Portal?

Check the following that apply:

  • You find it hard to communicate with your customers about ongoing invoice disputes
  • Your AR process is tedious and slow, and you find it difficult to complete all your tasks on time 
  • Your clients are constantly asking you to resend invoices, supporting documents, and more details
  • Your DSO is going up and  payments are continuously coming in late
  • Your stack of outgoing invoices and mail keeps increasing and you’re losing track of certain documents

If you identify with any of the above, then your invoicing process could use an upgrade and an online invoicing portal may be a good place to start.

When deciding if an invoicing portal is necessary for your business, there’s really only one way to look at it – what do your customers want? If your customers want an easy and efficient way of receiving invoices and tracking their account standing, then an online portal is your answer.

The Benefits of an Online Invoicing Portal

Implementing an online invoicing portal has several benefits for your company and accounting team.

1. Real-Time Visibility

With online 24/7 access for both your business and your customers, it’s easy to find any information you need anytime. Your customers can clearly understand what they owe and will feel more prepared to make their payments when they’re due.

2. Insight Into Customer Behavior

With your customers’ account history at your fingertips, your team can better understand their patterns of behavior. Which customers tend to pay late? What notification cadence seems to do the trick? What payment method do customers prefer? These insights help with knowing the right time to interact.

3. Elimination of Manual Processes

An online invoicing portal eliminates the need for paper invoices and all the manual effort that comes along with that process. A better understanding of your customers’ payment behavior also reduces manual effort as collections calls can be minimized to only customers that can’t or won’t pay. Beyond saving on the time and cost of printing and sending invoices you also minimize the risk of error—which can be pricy since a single error from paper-based invoicing can cost over $50 to fix.

4. Quick Dispute Resolution

In AR, as in life, disputes are often caused by miscommunication or lack of information. When customers can access their complete account history and current invoices on demand, many disputes can be avoided before they become an issue. With the time you save by eliminating manual processes, you’re also able to spend more time communicating with your clients and making sure their needs are met.

5. Customization Options

Many e-invoicing solutions offer options to customize invoices to fit your brand.  The more robust solutions can also support multiple invoicing formats, giving customers the ability to choose the best delivery method for them. The more convenient you can make receiving invoices for your customers, the more likely you are to be paid on time.

When to Use an AR Automation Platform for Online Invoicing?

Invoicing is only one piece of the accounts receivable puzzle, as your finance team is well aware.

Implementing a solution that pairs invoice presentment capabilities with automation for back-office functions such as cash application, collections management, and task management drives your team’s efficiency beyond what you could expect from a pure e-invoicing solution.

The main drivers that should motivate your team to invest in invoicing software are of course to make processes simpler for your team, but also to create a better experience for your customers. Solutions that offer a customer-facing portal with tools for easy communication between you and your customers can make a big difference in improving your customers’ billing and payment experience. With an industry-leading end-user adoption rate of over 80%, we at Versapay know a thing or two about that.

The easier it is to do business with you, the faster you get paid—and isn’t that every AR team’s goal.


Versapay Named Among Fastest Growing Companies in North America and Canada on Deloitte’s 2020 Technology Fast 500 and Fast 50

Toronto, ON—November 24, 2020—Versapay Corporation, the leader in Customer-Centric Order-to-Cash solutions, has been named to both Deloitte’s 2020 Technology Fast 500 and 2020 Technology Fast 50 lists, honoring the fastest growing and most innovative technology, media, telecommunications, life sciences and energy tech companies in North America and Canada respectively.

Both rankings are determined based on revenue-growth percentage over a three-year period. This year, Versapay enters both lists for the first time, ranking 233rd on the Fast 500 list and 37th on the Fast 50 list.

Versapay is positioned for continued growth as it continues to strengthen its AR Automation and Integrated Payments offerings for mid-to-enterprise class businesses. Earlier this year, Versapay announced its acquisition by Great Hill Partners and merger with Solupay, a leading US-based payment solutions provider.

“We’re helping organizations navigate the transition to digital payments brought on by growing customer demand and an increasingly remote workplace,” says CEO of Versapay Craig O’Neill. “Our focus is making billing, payment, and online conversation easy for buyers and sellers.”

“We’re pleased to be named among such an impressive cohort of companies and owe this recognition from Deloitte to our amazing partners, customers, and team.”

About the Deloitte 2020 Technology Fast 500 and 2020 Technology Fast 50

Now in its 26th year, Deloitte’s Technology Fast 500 provides a ranking of the fastest-growing technology, media, telecommunications, life sciences and energy tech companies — both public and private — in North America. Technology Fast 500 award winners are selected based on percentage fiscal year revenue growth from 2016 to 2019.

The Technology Fast 50™ ranking recognizes the 50 fastest growing Canadian technology companies with the highest percentage revenue growth from 2016 to 2019. Qualifying companies must have headquarters in Canada, have been in business for at least four years, have revenues of at least $5 million, own proprietary technology, and conduct research and development activities in Canada.

In order to be eligible for Technology Fast 500 recognition, companies must own proprietary intellectual property or technology that is sold to customers in products that contribute to a majority of the company’s operating revenues. Companies must have base-year operating revenues of at least $US50,000, and current-year operating revenues of at least $US5 million. Additionally, companies must be in business for a minimum of four years and be headquartered within North America.

About Versapay

Versapay is focused on changing the way companies do business together by offering Customer-Centric Order-to-Cash solutions for mid-market and enterprise businesses. We help our clients offer a superior customer experience, enabling CFOs to accelerate cash conversion, reduce costs, and eliminate paper, checks and manual business processes. Based in Toronto with offices in Atlanta, Cleveland, Baltimore, LA, and Las Vegas, Versapay is owned by Great Hill Partners, a Boston-based technology investment firm.

Should You Use Electronic Invoices? Everything You Need to Know About EIPP

For some people, it’s hard to imagine anyone using paper checks as their main payment method or stuffing envelopes and mailing out invoices to customers. For others, it’s still standard practice. 

With alternatives available today that encourage faster and more efficient invoicing experiences, many businesses still rely on dated processes for their accounts receivable (AR). Why? 

In this blog, we’ll outline Electronic Invoice Presentment and Payment (EIPP) and discuss whether it’s the answer to upgrading your manual invoice-to-cash process. We’ll delve into what EIPP is, help you understand why businesses use it, and ultimately, help you decide if implementing this kind of solution is right for your business.

What is EIPP? 

Put simply, EIPP enables suppliers to give customers an improved payment experience by providing a simple, automated, and secure alternative to the traditional paper-based invoicing process

From beginning to end, EIPP software automates and streamlines business transactions, and allows for the electronic sending of invoices to clients via e-mail or self-service customer portals, enabling your customers to pay you as soon as they receive an invoice. 

EIPP enhances the AR process by offering invoices in multiple formats according to their needs and preferences. These could be via electronic data interchange (EDI), commerce extensible markup language (CXML), PDF, and email. Plus, EIPP integrates with existing web-portals, accounting systems, and cloud software so you can better optimize your invoicing process. 

Why Do Businesses Need EIPP? 

If you’re reading this thinking “Well this all sounds great, but why do I need EIPP? My business’ invoicing process works well enough,” allow me to elaborate. 

Paper-based invoicing—with its postage, envelopes, paper, and printing—is incredibly costly to businesses’ bottom line. The margin for human error in manual invoicing is quite high, with each error from paper invoicing potentially costing over $50 to rectify. In our current climate of economic uncertainty, where maintaining cash flow is critical, you don’t want to be paying these kinds of avoidable costs. 

Paper-based invoicing and the disjointed accounting systems that accompany it make billing and payment incredibly complex and only lead to headaches for finance teams. 

But perhaps most importantly, paper-based invoicing doesn’t fit with the experience customers have come to expect from their suppliers. Expectations from the B2C world have migrated to the B2B world and customers today demand an online, self-service, and electronic payment experience which resembles their experiences as consumers.

An EIPP workflow eliminates the drawbacks of manual invoicing, simplifies the payment process, and improves customer, supplier, and partner relationships as a result. Businesses also see metrics in their aging reports improve after implementing an EIPP solution.

Reducing overhead costs, eliminating potential for human error, speeding up cashflow, and giving customers the experience they demand are all benefits of EIPP, and may give your business a competitive advantage.

Is EIPP Right For Your Business? 

If you’re looking for a way to get your customers paying you faster, EIPP may be a good fit for your business. By delivering a more convenient and personalized invoice presentment and payment method to your customers, you’ll most likely see an improvement in their payment behavior. Your customers will love being able to instantly view and pay invoices in the ways that work for them. 

That’s all well and good for your customers who were going to pay you anyway, but what about the customers who can’t or won’t pay? That’s where EIPP leaves much to be desired

Those customers who are “payment averse” need continuous reminders and follow ups, which is impossible to manage at scale without the right platform in place.

If your collections efforts are a significant pain source for your finance team, it may be worth considering a solution that can provide collaboration and deeper automation features than a basic EIPP solution can offer.

EIPP vs. AR Automation 

An EIPP solution can’t fully solve the challenges faced by a modern AR team. 

Rather, for an EIPP workflow to be best utilized, it should be paired with an AR automation solution that manages collections and payments, allows for real-time collaboration between suppliers and customers, and can intelligently apply cash so your money ends up in the right place every time. Bonus points if a solution can offer these back-office automation features in addition to multi-channel invoice presentment and online payments.

However you choose to invoice customers, implementing an electronic method will be leaps and bounds ahead of manual and paper-based invoicing. And as the world moves further and further towards a remote working environment and we digitize our finance processes, the better positioned we are to ride out uncertainties.