Globys Research A strategic perspective on invoice-to-cash

Accelerate Your Invoice-to-Cash Process with One Simple Change. Guaranteed.

Topics: Invoice-to-Cash, Invoicing

Stop invoicing by order and account and start invoicing by customer.

Yes, read it again and let it sink in. It’s not your disconnected billing systems or complex product catalogs delaying your payments. It’s your disconnected orders and account structures that are spilling over into your customer invoicing.

The by-order or by-account approach may be the ‘easiest’ way for your billing and accounts receivable to issue invoices and collect payments. But the efficiency of your invoice to cash process is not solely dependent on you. It’s reliant on your customers’ accounts payable making timely payments.  If you leave consolidation up to your customers, you’re injecting delays into your payments.

Innovative B2B companies are collecting cash in half the time by shifting from their supplier-centric ways to a more modern, customer-centric approach.

Let’s break down the invoice to cash process to learn how: 

Step 1: Generating Customer Invoices

The act of gathering all usage and charge data into a shareable format is no easy task – especially when you have thousands of customers, using tens or hundreds of services.  Customers procure your products over multiple orders and under multiple accounts. And your invoices are driven from that purchasing behavior.

So a business customer who has 20 wireless, 20 wireline and 20 data services accounts, receives, at a minimum, 60 invoices each month.  Consequently, the customer’s accounts payable manager will have to spend time manually consolidating these in order to simplify their payment.

Customer-centric invoice processAnd in the case of enterprise invoices, these customers typically require the supporting detailed data for validation purposes. Again, this invoice detail data is typically provided per account, and adds another step – and more time – to the process of consolidation and review. 

Step 2: Managing Invoice Adjustments

Adjustments, disputes and discounts all require a change to the invoice produced in Step 1. Some recurring changes, such as contracted discounts, may be applied prior to distributing the customer invoice. But adjustments and resolved disputes often require the re-issuing of an invoice.

Similar to supplier-centric invoicing, dispute processes are typically aligned to a specific product or line of business. Again, this may simplify dispute handling for the supplier but can be daunting (and a payment deterrent) for a customer who raises disputes across multiple invoices.  

Step 3: Receiving Payments from Customers

Remember those 60 invoices the business customer received in Step 1?  Now comes time for payment. Following the same structure as the invoices and disputes, the payment options are order and account specific. Accounts payable can pay online for the wireless accounts but have to pay via check for the wireline accounts. Your customer’s accounts payable will have no way to make a single payment across all accounts or to easily allocate the cross-invoice charges throughout their organization.

It’s important to note that customers don’t just ‘adapt’ to your way of invoicing. They build heavily manual, time-consuming processes to dissect your invoices, in order to reconstruct in a way that aligns to how they actually operate – and how they need to pay. 

Step 4: Applying of Customer Payments

And as a result, the application of payments is becoming more of a challenge. As business customers move further from your defined invoicing and payment model (account – product – invoice – payment), the task of connecting the dots is growing in complexity.

Following our example above, after allocating the charges on their side, the customer’s AP uses a bank transfer to avoid making 60 individual payments. The good news? You got paid for the total outstanding amount. The bad news? There’s no remittance advice as to how to apply payment to which invoices and which accounts. As a result, your AR team spends countless hours playing the matching game between payments and outstanding invoices – while the cash sits in limbo.

Your customers are moving to a pay-their-way model – with or without you. By providing a customer-centric invoice-to-cash approach, you maintain the connection between your customer invoices and your customer payments. Customers can easily consolidate, allocate, and pay according to their needs. And you can automatically reconcile payments across your varying systems.  

Ready to accelerate your invoice to cash process?  Click here to learn more.