Voice of Our Customers: Changing the Collections Process with ARC

In this short video, Dr. Al Bates, Principal in the research group Distribution Performance Project, explains why distributors who take on these 5 essential practices find themselves in the top 10% of profitable distributors.

The 5th and final point, communicate to and with all the managers. Financial teams can’t be successful if they operate in silos. Loop in the wider business and ensure everyone is bought into the objectives set.

The 5 Essentials for Improving Profitability – MDM Spotlight #5: Communicate With All Managers

In this short video, Dr. Al Bates, Principal in the research group Distribution Performance Project, explains why distributors who take on these 5 essential practices find themselves in the top 10% of profitable distributors.

The 5th and final point, communicate to and with all the managers. Financial teams can’t be successful if they operate in silos. Loop in the wider business and ensure everyone is bought into the objectives set.

Voice of Our Customers: Improving the Invoicing Experience with ARC

We asked our clients how VersaPay ARC has improved their invoicing process and the experience they deliver to their customers.

ARC enables organizations to automate invoice presentment, send invoices electronically and track not only that the invoice has been received, but when it has been viewed or opened. Our clients never have to hear “I didn’t receive that invoice” again.

The Fathers House

That Father’s House implemented VersaPay ARC®, a cloud-based solution that automates the entire invoice-to-cash process: presentmentcollaborationcollectionspayments and cash application. With ARC, The Father’s House replaced two legacy systems, enabled an exceptional customer experience throughout the invoice and payment process and saved its AR Specialist real time.

With ARC’s seamless Sage Intacct integration, invoice presentment has been fully automated.
A full day’s work each month has been reduced to no more than an hour or two. No more manual entry. With ARC’s invoice delivery tracking, The Father’s House now has the ability to see not only that invoices were successfully delivered, but when they were viewed and opened.

ARC’s easy to access payment portal allows end-customers to enter the portal with 1-click.
Customers can pay the way they want with increased payment options – including ACH – and have the ability to set-up AutoPay. With automated notifications and in-platform messaging, customers are always aware of when payments are due. With real-time dashboards and customer tagging, the AR Specialist has complete visibility over customers and payments.

With VersaPay ARC, The Father’s House has enabled its AR Specialist to better serve its customers while getting paid on time.

Voice of Our Customers: What Smart Leaders Say About Customer Experience

We asked finance and IT leaders across industries to explain why providing an excellent customer experience is so critical in today’s business landscape.

With VersaPay ARC, delivering a memorable, self-service customer experience is simple. Put your customer at the centre of your AR process and make it easy for them to do business with you.

COVID-19 Response – MDM Live Event: Cash Flow Management

In this 20mins video, John Gunderson, VP of Analytics and e-Business at Modern Distribution Management (MDM), explains what distributors and manufacturers can do today to manage cash flow in the face of the COVID-19 pandemic.

John recommends 5 levers that you as a distributor could pull to strengthen your position:

  1. Cash discounts
  2. Special terms for specific customers
  3. Rebates
  4. Stock programs
  5. Manage your back orders aggressively
  6. BONUS TIP: Automate your AR and AP

Interested in learning more? MDM are hosting weekly live events with leaders across the wholesale distribution sector. Register for the next event here.

5 Ways Your Finance Team Can Stay on Top of its Receivables Today

The End of Economic Prosperity

As reported by the International Monetary Fund, the United States is now in the worst economic downturn since the Great Depression. Unemployment, retail sales, economic output and industrial production are all at record numbers. In this time, it is critical for organizations to recognize the severity of the current situation, and to realize it is not just business as usual. Every business must change how they operate now, in order to survive the current economic downturn.

Staying on Top of Your Receivables

Change can be difficult, and oftentimes organizations struggle knowing where to start. But a good first step any business can take to ensure business continuity is staying on top of receivables. To do this as effectively and as efficiently as possible, here are five tips we’ve gathered from clients as they share what they are doing today to adapt to the everchanging environment.

01. Avoid Clamping Down too Harshly on Your AR
When faced with a crisis, a common first reaction from finance leaders is to lock things down, and to try and collect on all outstanding invoices. But being too aggressive with your customers could drive them away and lose business for your company in the future. The key is consistency; be considerate of the current situation, but also be realistic about your finances too. Communicate to your customers what your expectations are going forward and make clear of any consequences should they not hold up their end of the bargain. Maintain an open line of communication and treat every deal as a partnership.

02. Employ the Carrot and Stick Approach
Successful AR managers are able to find the right balance between the carrot and stick approach and utilize both methods simultaneously to effectively stay on top of their receivables. Our clients recommend pairing positive reinforcements like discounts with negative reinforcements, such as late fees. Here, the goal isn’t to punish your customers, but instead to encourage them to pay in a timely fashion. As was the case with tip #1, your organization must be consistent in its approach. If you’re offering discounts to customers who pay within 10 days, that means 10 days. Ensure both sides have a clear understanding of your expectations, and if in doubt, over communicate until you’re satisfied.

03. Be Flexible
The global environment we find ourselves in today is unlike anything we’ve experienced before, there is no handbook for what we’re current dealing with. We’re all trying to figure things out as they happen. To that end, our clients recommend retaining some level of flexibility in your business processes, so you are better able to support those who are struggling to get by. So long as you are in the cash position to do so, delivering a flexible customer experience in these times can help strengthen your relationships in the long run.

04. Use Technology to Your Advantage
In order for your organization to effectively facilitate the first three tips, you must first ensure you have the right technology in place to do so. A good place to start is with an AR Automation solution that seamlessly integrates with your ERP and streamlines your collections process. The right solution will:

  • Save you time by automatically completing many labor-intensive tasks
  • Save you money by moving your current paper processes to a digital environment
  • Reduce the likelihood of human error and costly mistakes
  • Provide better insight into your current cash flow state

05. Have the Right Capabilities
When choosing your AR solution, look for a platform that provides the following functionality:

  • Customer Information: Your solution should maintain a record of all customer information. Treat it as a CRM for AR!
  • Automated Collections: Your solution should automatically handle all task-based activities, so your team only needs to worry about exception-cases.
  • Customer Scorecards: Your solution should give insight into customer payment behaviour, so you can confidently determine which customers you can be flexible with.
  • Ability for Customers to Communicate with You: An effective AR solution will allow for two-way conversation between you and your customers, so you know they’re always in the loop.
  • The Ability for Customers to Pay You: Your AR solution should allow for several payment methods to make it as easy as possible for your customers to pay you.
  • Integration into Your ERP: Your solution needs to integrate seamlessly with your ERP system.
  • Customer Reporting: No matter how complex your organizational structure may be, your AR solution should be able to distill things down so you can track AR at all levels.

Incorporating such a solution into your current business process today will enable your organization to stay on top of its receivables and provide business continuity during these uncertain times.

If you’d like to learn more about how your business can transform today, please contact us directly and we’ll be happy to answer any questions you have.

For helpful resources on working from home in the age of COVID-19, check out our new Resources page!

The Risks of Not Accepting Electronic Payments

The present economic environment is leading organizations around the world to make stark realizations about their current business processes. Of particular concern, business leaders are learning how unsustainable traditional payment methods like checks and lockboxes can be, and they are looking for new ways to enhance or replace their existing systems to bring continuity to their business. Enter digital payments.

Why Digital Payments Now?

Several macro-economic trends indicate that organizations now, more than ever, should be utilizing electronic payments. The following are three primary trends we’ve seen which signal it’s time for organizations to adopt a digital payments solution:

  1. Changing Customer Expectations
    Customer expectations are ever-changing and organizations that don’t keep up are at risk. Customer self-serve, online shopping, mobile banking, and on-demand services have led consumers to expect instant gratification for their behavior. Those expectations as consumers have translated over to our lives at work and are having real effects on relationships with suppliers and business partners. The move towards an online, self-service environment indicates that organizations should explore such solutions for their business processes.
  2. Changes in the Workforce
    Millennials are now the largest generational cohort employed in the workforce. Their experiences and how they operate in the workplace matter. Process heavy roles are no longer desirable and attracting and retaining top talent will be near impossible for organizations that don’t change. Effectively catering to the needs of millennials is important to driving future success for businesses. Considering this, steering your processes away from being manual and paper-based to a more automated and digital environment is a no brainer!
  3. Remote Work and the “New Normal”
    If you’re still unsure about digital payments, consider that the present environment we find ourselves in makes a traditional payment collections process (sending and receiving checks) a safety risk. With companies having implemented ‘Work from Home’ measures that will be in place for the foreseeable future, transitioning to a payment process that keeps your company agile has never been as important as it is right now.

Risks of Not Offering Digital Payments

Choosing not to offer digital payments to your customers presents two main risks that can impact the success and longevity of your business.

  1. Customer Power and Loss of Revenue
    Customers have tremendous substitute and negotiating power. We’ve all bought something from Amazon because it was the most convenient option, knowing we could have gotten it cheaper elsewhere. If your business processes make it difficult for your customers to do business with you, they will take their business to someone who can offer a more convenient experience, ultimately affecting your stream of revenue.
  2. Operational Challenges
    Forgoing a digital payments process leaves your business and your suppliers dealing with the added effort that comes with a manual payments experience. A cumbersome, manual payments process requires many steps and human effort to deliver a quality customer experience, every time. Not to mention, with the paper and labor resources required, it can be costly to your business. In a price sensitive market where margins are tight and you’re trying to grow and scale your business, manual processes of any kind are simply not sustainable. Compounded together, this introduces lags to your processes and slows down the speed at which you get paid, eventually driving up DSO, reducing working capital, and limiting the agility of your operation.

As John Shamanis, CFO of Carrier Enterprise put it, “If we’re not simplifying our transactions — and the transaction experience for our customers — then we’re failing.” By enabling your customers to pay you the way they want to, you are improving the experience you deliver to them while saving your team time and money. It really is a no brainer!

If you’d like to learn more about how your business can improve its payments experience, please contact us directly and we’ll be happy to answer any questions you have.

For helpful resources on working from home in the age of COVID-19, check out our new Resources page!

Streamline Your Collections with AR Automation

The current global environment has turned ordinary business on its head, forcing companies to come up with creative solutions to adapt to the rapidly evolving and uncertain economic climate. For those businesses that rely on a manual collections process, this puts a wrench in an already tedious and time-consuming undertaking.

With remote work expected to remain the new normal for the foreseeable future, it will be especially trying for these organizations to maintain business continuity within their current processes. Luckily, solutions like AR automation can help to eliminate the mundane tasks that tie up your finance team, enabling a more streamlined collections experience that ensures continuity for your business.

The Current State of Collections

Consider a day in the life of a Credit and Collections Manager today. They are required to check several accounting systems and their ERP for updates on customers’ standing. Credit managers will oftentimes need to manually input or manipulate this data into different reports for internal purposes, before cross-referencing it with their ERP and accounting systems, perform follow-ups with clients, all while tracking these interactions in a separate CRM tool.

Considering all of this effort, there are three main challenges that a manual collections process brings with it:

  1. Manual Work
    Simply put, a manual collections process is far too labor intensive; there are too many systems involved, which ultimately means time that could have been put towards other value-added work is wasted managing those separate systems.
  2. Out of Date Data
    Once your credit and collections team pulls data from your accounting systems, it immediately becomes out of date. Most standard accounting systems are not equipped to provide a live feed of data, so any payments made throughout the day will not be reflected until the next time that data is pulled.
  3. No Prioritization
    Manual collections makes prioritizing collections efforts – beyond total amount owing or recency – near impossible. As a result, the team is unable to focus their time where it would make the biggest impact to the business.

How Automation Can Streamline Collections

There is a better approach to this process and it all begins with automation.

  • Zero-Touch Collections
    Leveraging AR automation will enable your business to generate automated reminders for your customers that are based on your desired level of interaction with them. You will be able to easily target customers before they become overdue, and eliminate time spent chasing them down.
  • Real-Time Communications and Dispute Management
    AR automation gives your customers an easy-to-use portal for communicating with your collections team, allowing them to better manage disputes or answer questions as they arise.
  • Internal Follow-Up/Notifications
    With automation, your collections team will receive timely notifications and reminders that will empower your team to work smarter, not harder.
  • Audit Trail
    Having a clean audit trail that lists all interactions with customers in a centralized view is key for finance teams. Automated collections delivers an up-to-date view of your interactions with your customers.
  • Actionable Insights
    By leveraging automation, your finance team will gain clear insight into where to direct their immediate attention and intervention, while the software handles the rest.
  • CRM for Accountants
    Automated collections tools give finance teams a CRM (Customer Relationship Management) platform for accounts receivable. All team members will have a universal method for tracking their interactions with customers and record notes for anything that may require attention.

Task-based vs. Exceptions-based Collections

An important benefit of automating collections is the ability to move from task-based collections to exceptions-based collections. Task-based collections management is the traditional collections approach in which credit and collections teams spend their days working through exhaustive ‘to-do’ lists, including: manually investigate historical data for debts and bills, send emails to customers when they are XX days past due, process payments and refunds, update account status records, resolve billing issues, and so on. With exceptions-based collections management, automation does the bulk of the work so that you and your team only need to step in when human interaction is absolutely required to get the job done.

If you’d like to learn more about how your business can streamline its collections with AR automation, please contact us directly and we’ll be happy to answer any questions you have.

Transitioning Your Invoicing From Paper to Electronic

Remote working brings about many challenges for organizations and the AR department is no exception. For businesses that rely heavily on manual and paper-based processes, the current situation will be especially tough. With economic uncertainty the only certainty at the moment, it’s important for finance leaders to make the necessary changes now, in order to position their company for survival in the months ahead, and an eventual return to growth. One change that can help is to make the move to electronic billing.

You’re not at your office to print and stuff envelopes. Your customers aren’t at their offices to receive invoices in the mail. Making your invoicing process fully digital enables you to deliver invoices from your at-home office and ensures your customers can receive those invoices from wherever they are working. Beyond the usual arguments for going digital – time savings, eliminate mistakes caused by manual entry, and save envelope, printing and postage costs – digital invoicing can help ensure business continuity in today’s rapidly changing market.

How to Make the Switch?

Once you’ve recognized the need to switch from paper to digital, you need to put together a strategic plan. When putting together your plan, there are 4 key elements to consider:

  • Customer Email Addresses
    Ensure your business has a record of customer email addresses or has a plan on how to collect them. Having your customers email addresses is essential to electronic invoicing, as this is how invoices will be delivered.
  • Goals and Objectives
    Clearly outline your goals for switching to a digital process. Mainly, why are you making the switch, what is the win you’re aiming to get out of it, and in what timeline?
  • Customer Communication and Change Management
    Communicate with your customers in advance. Make them aware of the changes coming, the benefits they will reap from this new process, and of any adjustments they may need to make.
  • Implementation Approach
    Decide if you are going to phase-in the new process, or launch it simultaneously for all customers? Both approaches have pros and cons, but it will ultimately be up to the decision makers on your team to make that call. If you would like to learn more about the pros and cons of these implementation approaches, please feel free to reach out to us directly.

Once you’ve established a strategic plan of action, it’s now time to execute. Execution is important for businesses to get right, especially when trying to migrate customers who are also facing new and changing challenges. There are, however, ways for you to make this transition smoother.

  • Incentivize Customers
    Incentives are a great way to get your customers to adopt your new invoicing format – whether you hold a draw or offer some form of discount – it will go a long way to making the transition less stressful.
  • Update Onboarding Materials
    Address and explain electronic invoice presentment in all new customer onboarding documentation and advise that manual invoices will not be distributed.
  • Don’t Make Customers Set-up Logins and Passwords
    Simplify enrolment for your customers. We’ve found the number one barrier to e-adoption is the need to create some form of identification and passwords. Highlighting to your customers that this is not required will be a huge bonus, and you can expect to see a much higher adoption rate from them as a result.

Electronic Billing is the First Step

Implementing a fully digital invoicing process is a great step in establishing business continuity in today’s climate – but it’s only one aspect of accounts receivable. Enabling customers to easily pay, communicate, and collaborate online are all important aspects of managing cash flow and delivering customers a consistent experience.

If you would like further advice on how to implement a digital invoicing solution or about anything else we’ve discussed in this blog, please reach out to us directly and we’ll be happy to answer any questions.