Gain control of cash flow in six steps
Cash and cash flow management require simultaneous monitoring of an array of financials. We break down how to approach each part of the process.
When it comes to any small business' success, selecting an accounts receivable (AR) payment provider is critical. From providing flexible payment options and streamlining the accounts receivable process, to increasing cash flow and driving customer loyalty, the right AR payment solution can be a powerful ally for small to midsize businesses (SMBs). But how does an SMB choose the best provider?
In this article, we'll explore the criteria for selecting an effective AR system, the key features in the SMB payment collection process, and show the competitive advantage that an integrated AR solution (with embedded payments) has over a standalone merchant services provider. With this information, you can make an educated decision on which AR payment provider can best meet your business needs.
It is crucial to assess AR payment options and make the right selection upfront to ensure you partner with a company that can stand next to you as you grow. For most SMBs, the AR Payment Provider needs to offer:
When assessing an AR payment provider, it is also essential to consider the needs specific to each step of the payment collection process. Let’s take a look at the most critical parts of the payment collection process and what CFOs and Controllers should be keeping in mind:
Communicate invoice and payment information
Most standalone merchant services providers offer invoice issuance only, while integrated AR solutions like Centime provide both invoice issuance AND every subsequent payment reminder on configurable cadences by the customer segments you define.
Automate and customize invoice reminders
Most standalone providers do not offer invoice reminders at all, while integrated AR platforms not only send out reminders, but allow you to customize the reminders for your customers in a personalized way that suits your business and customer relationships.
Monthly statements
Standalone providers do not send out monthly statements on open invoices, but integrated solutions automate this process and also allow for sending statements on an ad-hoc basis.
Multiple payment options (Card, ACH)
Both standalone and integrated AR solutions typically offer multiple convenient payment options for customers to facilitate a frictionles payment experience.
Store payment details
Most standalone providers do not allow saving of payment information, whereas integrated solutions do which results in faster payment processing.
Automated payments
Most standalone providers do not allow automated payments while many all-in-one solutions have this feature which ensures timely payments when customers choose to utilize them.
Controls around credit cards
Both standalone and all-in-one AR solutions allow for setting and passing of surcharges on to customers, but only fully integrated AR payment solutions also offer the ability to control under which circumstances to even offer credit cards as a payment option (e.g. specific customers, invoices under a certain threshold, invoices paid before the due date, etc)
Early pay discounts
Standalone providers don’t take early pay discounts into consideration but an all-in-one solution not only offers early pay discounts in accordance with the payment terms, but can reconcile the reduced amount correctly back to the accounting system.
Cash application to General Ledger
The majority of standalone providers do not integrate with an accounting system, while all-in-one AR providers allow for automated posting and native, bi-directional GL integrations saving you from the hassle of cash application.
Gross and individual payouts
Solutions like CentimePay pay out in gross (NOT net) and pay out every payment individually, which means that every payment applied in the GL will exactly match what hits the bank account and auto-reconcile. Standalone merchant services providers cannot offer this since there is no integration with an accounting system.
Secure self-serve payment hub
While most standalone merchants cannot, integrated applications like Centime help customers see all open invoices, access and download original invoices, see paid invoices, store payment preferences, set promises to pay, apply credits, and more. A payment hub can often allow for direct communication between customers and suppliers resulting in faster dispute resolution, better communication, and a full audit trail.
For most businesses, it makes sense to consider an all-in-one solution for AR payment collections for a more seamless overall cash management process. Having all of your cash flow features like AR, AP, cash forecasting, and credit features is cost-effective and efficient for finance managers and CFOs at most SMBs.
Centime's cash flow management suite of applications helps small to mid-size businesses streamline their AR payment collection process without taking away from the big picture. With the introduction of Centime AR + CentimePay (coming soon) + Payment Hub (coming soon), SMBs can scale growth and improve their Collections Effectiveness Index.
Talk to us to learn more about our integrated solution.
Cash and cash flow management require simultaneous monitoring of an array of financials. We break down how to approach each part of the process.
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