Executives that don’t align CX ambitions with accounts receivable leave money on the table

Most executives agree that customer experience (CX) is among their top priorities for ensuring their business remains healthy. It’s a simple formula: Happy customers will continue to buy from you, and unhappy customers will take their business elsewhere.

And yet, when it comes to accounts receivable (AR) and available digitization options for improving efficiency and accelerating cash flow, C-suite leadership routinely fails to see the connection with customer experience. Executives tend to view AR as isolated in the back office, overlooking the fact that it is one of the most consistent and vital customer connection points in the customer journey.

Wakefield Research and Versapay surveyed 1,000 C-level executives at companies with a minimum annual revenue of $100 million on their accounts receivable digital transformation efforts. Versapay discovered that nearly all executives judge their performance on CX, with 89% stating that they agree that the C-suite is only as good as its customer experience. Unfortunately, when it comes to AR digitization projects, customer experience isn't factored in enough.

Case in point: Fewer than half of executives (44%) see better communication with customers as a benefit of digitizing AR. Meanwhile, 72% state that their AR department isn't customer-oriented enough, implying that executives understand the need for customer-oriented AR departments, but aren't aware that they can close that gap as part of their AR digitization project.

Threats to cashflow are driving a need for AR digitization

There’s no denying that enterprise organizations today face some of the most challenging headwinds in decades. In fact, 99% of executives surveyed agree that supply chain disruptions, rising energy costs, lingering COVID-19 disruptions, high inflation, rising interest rates, labor shortages and global unrest all create major headaches for their businesses and increase the pressure on AR department performance.

Any one of these alone would pose a threat. But combined, they amount to a perfect storm for cash flow shortages and increased costs, including added cost to borrow capital for funding vital business endeavors. This situation has shone a light on outdated AR practices that demand intensive staff time and drive operational costs. Outdated practices include manual invoicing, making collections calls, handling check payments and using spreadsheets for cash application and reconciliation.

It’s no wonder that CFOs everywhere are now realizing the urgent need to digitally transform their AR operations with automation. 92% of those surveyed agree that to reach peak performance, every department in the organization (including AR) needs to be digitized.

A resounding 96% of respondents claimed that there is work to do in digitizing their AR departments, yet 60% agreed that their AR departments haven’t been prioritized as much as other departments for digitization. At a time when the importance of securing cash flow is higher than ever, many businesses are not putting enough focus on it.

Businesses that ignore CX in AR face costly consequences

Digital transformation projects for AR teams and processes tend to focus on a few key performance indicators (KPIs): improved days sales outstanding (DSO), cash flow acceleration, shortened collections cycles and labor efficiency. While it’s imperative to improve back-office AR efficiencies, automation alone isn’t transformation in the fullest sense.

True digital transformation in AR doesn’t just streamline what the AR department does: It reinvents the end-to-end process, changing customer interactions to address the root causes that hold up cash flow, ultimately delivering outsized improvements.

AR automation on its own can certainly deliver better performance against important KPIs for accounts receivable. But there’s a risk when automation ignores the customer side of the equation. Automating processes that already create poor customer experiences can potentially make a bad thing worse.

Consider that nearly half (45%) of executives surveyed have implemented at least some form of AR automation, but the majority continue to experience the same delays and issues. AR automation that doesn’t involve the customer isn’t helping as much as expected:

• 73% of executives say the invoice to cash process can negatively impact the customer experience.
• 82% say they have lost business due to conflicts arising during the invoice-to-cash process.
• 78% say that these issues could have been solved with better communication with customers.
• 85% say that poor communication with customers has led to getting paid less than they’re owed.

The “improvements” many companies implement through traditional AR automation — that is, automation that exclusively focuses on streamlining in-house AR processes — fail to address the root causes that hold up cash flow and can inadvertently make customers’ experience of doing business with you less human.

There’s a direct relationship between the humanness of the buying experience and customer satisfaction. While automation might deliver some KPI improvements, it doesn’t do anything to address the human element — the connection between the AR department and customers — that is too often missing in the AR process. More than just impacting cash flow, the long-term effect of this can mean lost business.

Collaborative AR is true digital transformation

Automation alone won’t drive transformation in the AR department. It won’t close the gap between AR departments and their customers or make it easier for customers to do business with you. Traditional AR automation tends to make processes easier for the AR team, but leaves the customer out of the equation. Their buying experience is unchanged, and can even become more difficult as the opportunity to interact with AR team members is reduced.

The vast majority of executives (95%) agree that increased transparency and collaboration between AR staff and customers would decrease payment disputes. This is why it’s vital that AR digital transformation efforts not only solve for efficiency and cash flow acceleration, but also the human element.

Collaborative AR goes beyond traditional AR automation by including digital tools that empower the buyer and supplier to work together more efficiently and in real time. Because, at the end of the day, business-to-business boils down to people-to-people. If that connection is broken, attempts to improve AR will fail to have a meaningful impact.

Delivering on the promise of Collaborative AR

Collaborative AR — closing the gap between AR departments and their customers — addresses the root causes that hold up cash flow and goes beyond automation to deliver outsized results. That’s why we created the world’s first ever Collaborative AR Network. Versapay is the first AR automation solution designed to address the human side of AR by empowering the genius of teams. We get AR and AP teams working together efficiently — in real time — to solve challenges and move business faster.

Our Collaborative AR Network is what you get when you take Versapay’s industry-leading AR automation, add all the collaboration tools we’ve come to expect from modern, cloud-based apps and then add a next-generation B2B payments network. It connects buyers with suppliers to create greater AR efficiencies, accelerate cash flow and drastically improve the customer experience.

The beautiful thing about the Collaborative AR Network is that, of course, it solves process issues for increased efficiency and accelerated cash flow. But it also dramatically improves the customer experience via the kind of collaboration tools your customers expect in the buying process. This drives down dispute escalations to retain more satisfied customers and get paid faster. At Versapay, our Collaborative AR Network has consistently demonstrated:

• 50% reduction in manual work
• 30% decrease in past-due invoices
• 25% increase in speed to payment
• All this with a 95% customer satisfaction rate

The finance arm of the organization is not exempt when it comes to supporting the critical priority of customer experience. So how is it that nearly three out of four executives are willing to admit that their AR department isn’t customer-oriented enough? Now is the time to change that.