Businesses of all sizes, across all industries, often struggle with growing their business while waiting for payment on products and/or services they have delivered. Payment terms of 30, 60 days or more are convenient for buyers, but delays the benefit of the payment to the seller. Some transactions can be processed by credit cards, though most high-value transactions end up in the accounts receivable column of a company’s balance sheet.
Buyers immediately benefit from what they buy, whether it is a capital equipment purchase or professional services. The seller needs to wait to pay their staff, pay their taxes or make other strategic investments with the funds from the transaction. Waiting for checks to arrive, electronic funds transfers to arrive in the bank or other payments to be made is like watching a pot boil. It takes a long time, and a lot can go wrong when you are waiting. Consider what might happen if your business was not able to make payroll, remit on taxes or pay your office lease on time because of a delayed customer payment.
Accounts Receivable Collections Done Right
In some industries like logistics and transportation, companies will expedite payment of their invoices by contracting a freight bill factoring service provider. Credit management software is a more affordable and fiscally responsible arrangement.
Completing offline credit checks, extending terms which facilitate large sales and waiting for payment is a traditional, but inefficient way of doing business. B2B credit management software is not just for large companies; small businesses are often the most vulnerable when accounts receivables are not paid on time. If a company is looking to get acquired or expand through investment itself, banks and investigators do not like to see patterns of slow receivables collection.
Secure online transactions provide convenience and ease of ordering for the buyer. Popular e-commerce engines like Shopify, IBM WebSphere and SparkPay provide powerful API’s for integration with accounting systems and credit management software. Ensuring a buyer is credit worthy before shipping product greatly reduces the risk of non-payment. B2B sales portals require significant investment to build and maintain, so expediting payments from your website should be a priority.
Ease of doing business and effective credit management are often primary considerations for companies shopping for a new vendor. The buyer can get the product and value they are looking for faster. The seller’s assurance of quick on-boarding time can be a strategic differentiator. Not extending credit to customers, or taking a long time to do so can cause you to lose business to those that do. Since your core business focus is likely not pursuing delinquent accounts, the expense of paying a collection agency can erode your profitability on the revenues you manage to recover.
Instead of missing out on recognizing a critical transaction for the fiscal year or quarter, ensuring a customer is credit-worthy before closing out the transaction tends to make auditors happy. If you have worked with auditors, you will know making them happy can be a difficult task.
Accelerating Days Receivable Turnover
The cost of contracting for cloud-based credit management software are far outweighed by the benefits of getting paid faster. Consider the peace of mind of not needing to worry about whether you can meet your own obligations while you are waiting for customer payments. Fast client credit approval will translate into customer loyalty. Your sales and service personnel can spend more time building high-value customer relationships instead of chasing bill payments.
Ensure the stability and growth of your business by ensuring online and offline transactions are secure, and leverage the increased cash flow to meet your obligations. If you can realize savings from early invoice payments, consider Apruve to be a way of offering your clients the same courtesy.
Call it a win-win.
To learn more about how Apruve credit management software can help your company to reduce the risk of extending credit for B2B transactions and accelerate payment, check out our data sheets page, or arrange a phone call with an Apruve solution expert.