Companies that prioritize resilience are better equipped to navigate challenges, seize opportunities, and sustain long-term success. Resilience enables them to adapt to change, effectively manage risks, engage employees, build customer trust, foster innovation, and maintain financial stability. However, while resilience is the Holy Grail for many businesses, discovering it is becoming, for many, harder than ever.
Recommended: “Fintech Ascend: Unveiling The Top 20 Influencer Marketing Software Of 2023”
The latest Global Economics Report from The World Bank warned that the latest forecasts indicate a sharp, long-lasting slowdown with global growth declining to 1.7% this year. Alarmingly, it also suggested that by the end of 2024, the level of GDP in emerging markets and developing economies will be about 6% below levels predicted on the eve of the global COVID-19 pandemic. So, how can something as basic as accounts receivable help companies counter such enormous challenges on the horizon?
A new generation of digital payers in an evolving payments landscape
The payments landscape is evolving rapidly, reflecting the uptake of digital technologies and the need for agility and innovation in the economic downturn. Automation and digital payments offer numerous advantages that can contribute to building strength and driving profits for companies. By embracing a digital transformation, companies can mitigate financial vulnerabilities and significantly contribute to creating a resilient company.
Creating a new generation of B2B digital payers supports CFOs and other financial professionals by allowing them to maximize and forecast cash flow while reducing dependence on paper checks and mail systems, helping to future-proof businesses as uncertain times continue. Put bluntly, your accounts receivable process will likely be the difference between success and failure, so how can implementing a robust automated AR process help?
A better cash flow and customer experience
If businesses are to be resilient and maintain their competitive edge in these economic conditions, they need a strong cash flow.
Faster payments and an automated AR process leads to improved cash flow and reduces the risk of delayed or defaulted payments. Leveraging technology to automate manual tasks such as generating invoices, sending reminders, and reconciling accounts can reduce human error, save time, and improve efficiency.
Digitalizing AR also enhances the customer experience by streamlining the invoicing process and gives real-time information on payments and payment history, enabling customers to make payments conveniently. This promotes satisfaction and strengthens customer relationships. These positive customer experiences contribute to customer loyalty, repeated business, and a resilient revenue stream.
A glimpse into the future while reducing costs
Automated AR solutions can provide a wealth of data that can be analyzed to help understand things like trends in customer behaviors, average payment times, and potential areas of weakness. This data can help companies optimize credit policies and identify high-risk customers. Ultimately, it will also help with cash flow, and this liquidity can enable businesses to better manage their working capital, meet financial obligations, and invest in growth opportunities while reducing transaction costs. Accepting electronic payments eliminates expenses associated with physical checks, cash handling, and manual reconciliation. Moreover, digital payments can automate recurring billing processes, reducing administrative overhead and improving operational efficiency.
Recommended Fintech Insights: Daily Fintech Series Roundup: Top Fintech News, Analytics and Insights
Enhanced Security
Automated AR, and in particular, digital payments, often incorporate advanced security measures such as encryption, tokenization, and two-factor authentication, making them more secure than traditional payment methods. This increased security minimizes the risks of fraud, data breaches, and financial losses for both companies and their customers. By providing a secure payment environment, businesses can build trust and loyalty among their clientele, ultimately driving profitability.
Choosing the right AR Provider
When looking for a modern AR provider, businesses should focus on interoperability. Is its solution integrated with the open Business Payment Network (BPN) and interoperable with the larger payments ecosystem? It’s also critical to work with an AR partner that has an expert grasp of evolving payments legislation. EU laws are currently changing, and it’s important businesses implement processes that are fully compliant with all relevant trading laws such as the EU’s recently published VAT in the Digital Age (ViDA) directive which will mandate e-invoices.
Conclusion
Central to facing the challenges of turbulent times is maintaining a healthy cash flow, facilitated by an efficient, digitalized AR solution. Implement a robust, reliable solution, and you can drive profitable growth, even in a stormy economic climate. After all, the way your cash flows is as crucial as the fact that it flows.
Blockchain and Crypto News: Cboe Digital Receives Approval to Launch Margin Futures on Bitcoin and Ether
[To share your insights with us, please write to sghosh@martechseries.com]
