With 2020 finally upon us, it’s time to start making our New Year’s resolutions. You may already have set your personal goals, but what about your Accounts Receivable resolutions? As an accountant, these resolutions might look a little different, but that’s why Paystand is here to help.
You may want to streamline collections and watch your productivity skyrocket. You could automate complex processes or try new tools. Let’s explore a few A/R resolutions you can make for the upcoming year and look at how we can turn them into a reality.
Below, I’ve compiled 6 resolutions from our team of Accounts Receivable specialists to help you improve your A/R process in 2020.
1. "Digitize the Accounts Receivable Process."
It’s never too late to start digitizing your accounts receivable process. When it comes to faster payment times, going digital is key.
You can create receivables instantly and capture data within the receivable itself so you can track them and see any associated payment events or communications that have happened. This enhanced view is a huge help for identifying and fixing issues that can cause your invoices to go unseen, unprocessed, or unpaid.
Digitizing your A/R process also opens the door for you to automate a whole suite of time-consuming tasks that keep your team busy with paper-work and data entry. If you’re interested in learning more about where to start, this blog does an excellent job of explaining the ins and outs of shifting to a digital approach.
2. "Optimize Payments to Get Paid Faster."
This year, make sure you’re getting the most of your collections efforts by doing a bit of payment optimization. Considering there are digital payment methods with instant payment settlement times, making a few tweaks to your payment strategy can lead to shorter processing times, fewer chargebacks, and a sharp decrease in late payments.
A great start would be auditing how your business processes each type of payment, the costs associated with processing each option, and how long it typically takes to collect the payment.
If you notice there are routinely late customers who pay by check, consider adding early payment incentives for real-time options. If you’re paying monthly rates to accept ACH and none of your customers use this option, turning these rails off in your payment checkout interface can help you reduce costs. The key is to make it convenient for customers to pay you sooner.
Just getting started with payment optimization but want to make this one of your A/R new year’s resolutions? Check out our beginner guide here.
3. "Lower Your Payment Costs with Payments-as-a-Service"
As accounting leaders, we are always looking for ways to drive down our payment costs, and lowering these costs can be tough. You can easily find yourself negotiating for weeks or months just to shed a few tiny basis points from your blended processing rate.
But, did you know that there are better ways to save on payment costs than by fighting to lock in lower rates?
The best way to do so is by shifting to a payment solution that offers flat-monthly pricing and zero-fee rails. This Payments-as-a-Service model can drive a ton value to your business by making your A/R costs predictable, which also improves forecasting accuracy. One of our customers was able to reduce their payment costs by 99% (yes, you read that correctly) by shifting away from credit cards and taking advantage of our zero-fee payment network.
The beginning of the year is a good time to reassess your current payment solution and figure out what’s best for your business needs. Want to learn more about flat-fee payments? Click here for more details around Payments-as-a-Service.
4. "Use Every Automation Feature Your Payment Solution Offers."
Throughout the last few years, automation has really changed what’s possible for accounting teams, making it easier than ever for you to close the books and get more work done with fewer resources.
Take a look at this staggering statistic from CapGemini: CFOs spend 90% of their time on financial closing duties and a mere 10% on analysis. Automation can actually reverse those numbers.
When computers do the number-crunching, executives gain the power to not only analyze data and cash flow instantly, but they can make actionable decisions about financial management that drive bottom-line growth and help scale the business.
Want to ramp up your automation but don’t know where to start? This blog will help you turn your manual A/R set up into an automated machine.
5. "Make Transaction Fees Work For You, Not Against You."
Are transaction costs taking a lion’s share of your profits? If so, this is the perfect year to refresh your fee management strategy.
If you’ve already negotiated lower fees with your payment partners, consider the ways you can ease the cost burden. Solutions like Paystand let you turn on “Least-Cost-Routing” to steer customers to the payment rail that will result in the lowest cost to the merchant. You can either absorb the cost, split it, pass it on to your customer, or set a threshold that makes the decision for you based on the invoice amount, customer location, or customer type.
In other words, rather than trying to drive your blended rate as low as possible, your software can actually incentivize your clients to choose the payment option that works best for you.
6. "Extract More Insights From Customer Payment Data."
How many times have you heard that “data is the new oil”? This is equally true for accounting. Adopting a data-driven payment strategy doesn’t necessarily mean you need a complete big tech makeover. You can greatly impact your A/R metrics by simply analyzing your customers’ payment history.
For example, you may notice a customer is routinely late during peak season and decide to put them on a customized collection plan that only activates once their transaction volume increases past a certain threshold.
Finding new ways to segment data can uncover the magic bullet that leads to significantly lower DSO. Are you looking to move the needle on your A/R metrics in 2020? Consider how you can start extracting insights from your payment data in order to drive better outcomes.
Let's Kick Off A/R The Right Way in 2020!
The end of the year will be here before you know it. Regardless of which resolutions you'd like to tackle for A/R this year, all of these goals have the power to radically change your current accounts receivable process for the better. Executed correctly, these goals will deliver a positive ROI almost instantly. If you want to go beyond simply accepting payments, contact us to learn how Paystand provides savings, scalability, and control.
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Do you want to reduce overhead costs, eliminate transaction fees, and streamline collections? Schedule a free demo with one of our experts or call us anytime at 1-800-708-6413.