5 smart AR moves for tough trade times

For global businesses, on-time payment collections can be the difference between profitability and cash flow problems that hamper growth and delay needed investment.

Getting paid on time is always a challenge, but even more so during periods of economic and geopolitical uncertainty.

Businesses that suffer from delayed payments are essentially leaving significant capital on the table and providing free loans to their customers.

Without the ability to collect in a timely fashion, businesses are forced to borrow more money at today’s higher rates to make good on their own financial responsibilities.

Enhancing accounts receivable processes and deploying automated technology to accelerate incoming payments can help address the problems that arise from chronically delayed payments, enabling global businesses to maintain resilience during periods of economic turbulence.

Here are 5 primary ways adopting an automated AR (Accounts Receivable) strategy to improve collections can help any global business persevere and thrive in today’s business environment:

• #1: Pre-empting the Need to Take on Expensive Debt

Interest rates are high, and borrowing isn’t cheap. Reducing Days Sales Outstanding (DSO) can free up the cash you have already earned, minimizing the need to take on costly debt to meet financial obligations such as payroll, purchasing supplies, or even just covering the office rent. AR technology leads to better liquidity and fewer interest payments.

• #2: Deepening Customer Loyalty:

In today’s market, switching vendors is easy. Delivering great experiences, stellar customer service, and support is key to retaining customers and protecting revenues. AR automation strengthens customer relationships by offering seamless payment experiences. Companies can reduce friction and avoid frustrations that come from repeated payment reminders, leading to increased customer loyalty.

• #3: B2B Digital Commerce is Gaining Momentum

B2B buyers expect the same fast, simple payment experience they get as consumers. AR automation allows companies to meet these demands by offering automated payment processing, self-service portals, and seamless integrations that make paying for a product or service as easy as a couple of clicks. By embedding payment links within emails or texts, offering automatic payment processing, and enabling customers to manage all aspects of the payment process, B2B businesses can meet the growing demand for a modern and digitized payment experience.

• #4: Incorporating a Personalized Touch

Not every customer should be treated the same – especially when it comes to collecting payments. The approach, methods, and tone a business takes with long-time customers with a strong track record of on-time payments should be different than dealing with a perennial late payer who has eluded multiple collection efforts. AR automation allows businesses chasing late invoices to incorporate a degree of personalization in their outreach to improve outcomes, allowing businesses to consider each case and communicate accordingly.

• #5: Closing the Knowledge Gap

Finally, when key people leave the company, manual AR processes fall apart. Companies using platforms like QuickBooks and Excel to manage AR and collections can experience debilitating knowledge gaps if certain employees depart the company.

AR automation centralizes financial data, creating a single source of truth that ensures continuity and visibility across the organization, regardless of personnel changes.

Leaving money on the table is not an option in today’s global business environment.

By reducing late payments and improving cash flow, AR automation technology can help businesses build greater resilience in the face of economic headwinds while freeing leaders to focus on more substantive matters, such as accelerating growth and profitability.

Henry Helgeson is CEO of BlueSnap, a global payments technology company and all-in-one payment platform designed to increase sales and reduce costs for B2B and B2C companies.