It’s the classic chicken or the egg dilemma. Which came first – your AR problems or your customer’s AP woes?
“Why can’t they just make a payment that matches the invoice?” – AR Manager
“Why can’t they just send an invoice that matches how we pay? – AP Manager
And the manual process begins (and goes on and on).
There’s a major disconnect between how suppliers are invoicing and how enterprise customers are actually processing and paying those invoices. Both sides of the AR/AP house have made technology investments to bring efficiency to their month end process. But in most cases, little has been done to drive efficiency across the full spectrum.
Take your enterprise customers for example. ERP advancements are automating the approval workflow, requiring minimal intervention to push an invoice through to payment. And now with the rise of e-invoicing solutions, major corporates are turning the tables and requiring their suppliers to upload invoices into these designated channels.
On the AR front, there’s been a major push for automating the invoicing process. The goals? Automate the creation and delivery of invoices and accelerate the cash application process.
But there’s still a problem. The supplier’s AR team is assuming that the invoice they’re providing is a direct match for how the customer wants to pay. They’ve sent it as a PDF via email and even provided in an online portal.
What more could the customer want? Well, a lot actually.
While the suppliers’ investment in improving their AR process has made it easier for customers to retrieve their invoices, little has been done to make it more efficient to actually process those invoices. Invoice consolidation and splitting, fee verification, cost allocation – all of these tasks have to occur before an invoice is sent through the approval and payment workflow.
But that’s an AP problem, right? Depends how you measure your AR success.
Every hour, day, or week a customer spends on deconstructing or consolidating your invoices to match their AP structure means another hour, day or week that you go without payment.
And with B2B DSOs approaching the 75 day mark in some industries, suppliers are starting to change their approach from ‘not our problem’ to ‘how can we help?’
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