4 Ways B2B Payment Automation Saves Your Business Time & Money

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It can be natural to approach new technologies with a certain reluctance. The first person to see fire was surely dismayed by how hot it was. And early witnesses to the wheel no doubt thought “Well, let’s just see how this plays out,” at one point or another.

But then the evidence comes along. Fire makes things warm. Wheels improve transportation and accounts receivable automation software changes the way businesses handle their billing.

For the unfamiliar, it makes sense to be uncomfortable adopting automated billing. Perhaps you think your billing processes are fine the way they are. Perhaps you’re worried the investment won’t pay off. These are understandable concerns. But you might feel differently once you’re acquainted with the many benefits of automated billing.

Payment automation boosts cash flow, produces secure business transactions, expedites invoice processing, and overhauls the entire payment process.

There are many ways that payment automation saves businesses time and money. Once you see them, you’ll never want to go back to manual processes again.

1. Radically reduce workload and expedite cash flow.

When it comes to billing, manual processes can take weeks to complete. Not only is the process tedious, but it’s also naturally prone to error. Manual data entry produces the potential for misspelled names, addresses, or even amounts owed.

To err is human. The average person makes over three-quarters of a million mistakes in their lifetime. A decent portion of them are bound to take place at work.

Automated billing technology allows for secure business transactions that are completed in minutes rather than weeks.

Consider the case of JustLogin, an HR tech company with an award-winning suite of software for HR management. Its product was doing great. So great, in fact, that its payment data became difficult to manage by hand.

Its invoice process took weeks to complete. Between payment processing and invoice approval, one cycle had hardly finished before the next began.

By adopting automated billing software, JustLogin was able to reduce its billing process by 90%. The result? Improved payment processes, a healthier cash flow, and a very grateful billing department.

Automating B2B payments platforms also produces significant capabilities for data reporting that can be useful for billing and other departments of your business. From reports on customer spending to accounts payable/receivable information, a wealth of data is easily accessible with an automated billing platform.

There are also major benefits for the customer. While the business seizes the opportunity to reduce costs and improve cash flow, the customer benefits from flexible payment options, and a predictable invoice experience they don't have to think about.

While manual processes may have seen bills arrive on the first one month and the tenth the next, the automated process allows for consistency.

2. Stop the strain of revenue leakage.

Automating payments can also reduce costs by significantly improving your dunning management strategy. Nothing is more disruptive to your cash flow than bills that never get paid. Manual dunning management requires employees to contact customers by hand, and engage in a long, frustrating process that often never gets resolved at all.

Automated dunning can lower the costs of unpaid invoices and improve cash flow through:

  • Automated credit card retries: Missed payments are often accidental. If a customer’s bank account was low on funds or their credit card was maxed out the first time the transaction was run, they might have faulted accidentally. Often, you can try the transaction a second or third time a few days later and the issue will have been cleared up. Automated payment retries retrieve payments without uncomfortable conversations or embarrassments.
  • Credit card reminders: Credit cards usually expire every three years. When a customer’s card clicks off you won’t get any payments from them until they update their information. Automated billing platforms can send scheduled update reminders through your billing software to reduce the chances of missed payments. Some automated billing platforms can even perform automatic credit card updating, partnering with the major credit card brands, to make sure customer information is always current.
  • Automated customer communication: Your billing platform can also automate your dunning-related customer communication with text messages or emails, making customer contact significantly easier. You can create a sequence of communications and switch up the text in each one, ensuring you’re always sending the right message at the right time.

Most businesses add between 2-4% to their bottom line by switching to an automated dunning strategy. However, bitHeads, a BaaS (backend as a service) company, was able to recover an impressive 5-10% of revenue each month when it started automating its dunning activities.

3. Keeps customers happy.

A good automated billing platform not only expedites processes for your billing department but also provides customers with an extremely flexible experience. Even something as foundational as your product can be influenced by a good billing platform.

With a legacy billing system, something as simple as custom offers or catalog updates can take hours and a call to the IT department to make. For the business, it’s time-consuming and costly. For the customer, it could be a frustrating dealbreaker.

Automated platforms allow businesses to update their catalog in a matter of minutes, allowing sales to create flexible, customized offers for potential customers.

Automated billing platforms also have the potential to please customers by increasing their payment method options. They can support:

  • Automated clearing house (ACH) payments
  • Paper check payments
  • A variety of electronic payment methods
  • Card transactions
  • Early payment discounts

Billing is the sort of thing customers shouldn’t have to think about. When done right, it takes place seamlessly in the background. A good automated billing platform gives customers a smooth, carefree invoicing and payment experience.

4. Keeps you ASC 606-compliant.

Finally, B2B payment automation software can help you stay ASC 606 compliant. Proper revenue recognition is notoriously difficult in the subscription world. Doing it manually can be next to impossible, especially as a business grows.

General ledger-backed automated billing software keeps your books in order by ensuring your numbers are accurate while producing a solid paper trail that you can produce in the unfortunate event of an audit.

You never want the IRS at your door. If they do show up, however, a good billing platform may mean the difference between compliance and a penalty.

ASC 606 mistakes are no joke. Penalties can range from fines to jail time depending on the extent of the offense.

A pre-condition of success

B2B payment automation and invoice processing are more than just convenient. The world of SaaS is extremely competitive and growth-driven. The vast majority of businesses that fail to grow by at least 20% annually wind up shuttered.

In an industry this competitive, the little things can make a big difference. Automated billing, however, is not a little thing. From maximizing efficiency to collecting on owed bills and keeping the IRS happy, it’s a true powerhouse for keeping your business operating at peak performance.

If you don’t use it, your competitors will. Make sure you show up to the fray of commerce equipped with a flexible catalog and operational efficiency.

Tags: Payments

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