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Effective invoice payment processing is crucial for your business’s financial stability and healthy cash flow, yet so many companies still grapple with delayed payments, inefficient processes and the risk of funds stalling in collections. Leveraging advanced tools and technologies is essential for addressing these challenges, to help businesses optimize invoice payment processes, ensuring faster access to cash.

The Problem with Traditional Invoice Payment Processing

While the business landscape regularly evolves, invoice payment processing has lagged behind, held back by time-consuming and manual processes. The reliance on traditional methods, such as paper-based invoicing, manual data entry and approval workflows, contributes to inefficiencies that impede a company’s financial health. Here are some examples of how traditional invoice payment processing methods hold companies back:

  • Paper-Based Invoicing: The manual creation, printing and mailing of paper invoices not only consumes valuable time but also increases the likelihood of errors. Yet, 90% of companies are still issuing paper-based invoices in some capacity.
  • Manual Approval Workflows: The need for physical signatures, paper invoice approvals and manual verification processes contributes to delays in payment cycles. According to our Progressing Payments Report, it takes 11 working hours, on average, to manage a single manually processed invoice, with 71% reporting that up to 15 people are involved in the process.
  • Inefficient Communication Channels: Communication gaps often exacerbate delays in invoice payment processing. Inefficient communication channels, like phone calls, for example, not only slow down the resolution of payment issues but also hinder collaboration between organizations and stakeholders.
  • Limited Visibility into Payment Status: Manually tracking the status of invoice payments is challenging. Without real-time visibility into payment statuses for you and your customers, you can’t predict cash flow accurately for your business and your customers may not have a clear understanding of what they owe for goods and services rendered.?

Addressing these challenges requires a shift towards modern, automated invoice billing and payment solutions that streamline the entire invoicing process, from creation to payment.?

5 Essential Tools for Faster Invoice Payment Processing

Here are the five essential features you should look for to help your business elevate its payment processing methods.

1. Electronic Invoicing Systems

Transitioning from traditional paper-based invoices to electronic invoicing systems can significantly enhance the efficiency of payment processing. According to our Automating Accounts Receivable survey, businesses using electronic invoicing and automation experience a number of benefits, including improved productivity, increased customer satisfaction, better customer retention and improved cash flow. Electronic invoicing streamlines the entire invoicing lifecycle — from creation and delivery to tracking, approval and payment, leading to faster, more accurate collections.

2. A Comprehensive Payment Gateway

Integrating a comprehensive, secure, global payment gateway into your invoicing system facilitates more convenient transactions for your customers. According to Statista, global digital payment transaction value is expected to total $14.87 billion by 2027. The right payment gateway should support all of your payment use cases, all the currencies and countries you sell into and should support features that remove friction from the payment process, like an easy payment link in invoices, the ability to save payment information and allowing your buyers to use the payment types they most want to use. Many businesses that invoice payments avoid accepting cards because of the costs. Look for a payment gateway with compliant surcharging to help cover these fees.?

3. Automated Receivables Management

Implementing automated accounts receivable management tools allows businesses to save time and efficiently track and manage outstanding invoices. This helps in identifying and addressing late payments promptly. According to a NerdWallet survey, 55% of businesses have outstanding invoices from the previous year several months into the next year. Automated receivables management tools can automate reminders, escalate collection efforts and provide insights into payment patterns, reducing the risk of invoices aging into collection accounts. In fact, BlueSnap customers who use our AR Automation product see more than a 50% decrease in their DSO.?

4. Mobile Payment Solutions

With the rise of remote work and the global economy becoming increasingly mobile-centric, incorporating mobile payment solutions into your invoicing process is essential. In fact, research predicts that mobile payments will surpass $3.1 trillion by 2025. Mobile payment solutions enable businesses to receive payments on-the-go, providing convenience for both them and their customers.

5. Data Analytics for Cash Flow Forecasting

Using data analytics tools for cash flow forecasting allows businesses to gain valuable insights into their financial future. According to PwC, 84% of companies that actively manage their cash flow achieve higher profit margins. Predictive analytics helps businesses anticipate cash flow gaps, enabling them to proactively manage their finances and allocate resources strategically.

Turn Invoicing Inefficiency into Excellence with BlueSnap

Embracing the right tools for invoice payment processing is essential for businesses aiming to optimize their financial operations. With BlueSnap’s Invoicing & Billing Solutions, organizations can automate and digitize the entire accounts receivable workflow. From decreasing days sale outstanding (DSO) to boosting productivity and improving the customer experience, BlueSnap enhances organizations’ ability to safeguard their business and plan for the future.

Learn more about how BlueSnap helps businesses get paid faster by speaking with a Payments Expert.

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Frequently Asked Questions

What is AR automation?

AR automation, or accounts receivable automation, is the process by which manual accounts receivable tasks such as producing, sending and uploading invoices are instead handled by software. AR automation software can handle the entire accounts receivable process, allowing you the ability to automate any task you’d like to optimize.

What are the advantages of AR automation?

  • Fewer manual tasks mean less busy work for your teams, allowing them to focus on higher value operations.
  • Automatic account updating means immediate updates and instant notifications, reducing costly downtime and ensuring that payments are faster.
  • Dashboards are updated in real time, providing instant insights into important metrics such as AR performance, customer accounts, payment processing and more, for better overall data management.
  • Faster turnaround times and fewer errors result in less frustration for customers, while branded portals offer secure places for them to pay online.
  • Overall improved efficiency saves your company money, makes it easier to scale and can lead to more business opportunities.

Do I have to automate my entire AR process?

While you can automate your entire AR process, you certainly don’t have to. The flexibility of our AR automation solution ensures that you only automate the processes that you want to. This includes integrating with accounting, ERP and CRM software systems. Our AR automation solution comes pre-integrated with the software that you already use, so when you do want to start the automation process you can avoid complex onboarding or coding.

Can AR automation also handle subscriptions?

Yes. Subscriptions are automatically calculated in terms of recurring revenue. All of this information is placed in the reports section. The system breaks down all subscription revenue to its recurring monthly component, keeping track of all subscription revenue.

Can BlueSnap’s AR automation handle global sales?

Absolutely. Our Payment Orchestration Platform is designed to enable effective global sales, and AR automation is an important part of that. Our AR automation software can handle over 100+ currencies and 100+ payment types. Plus, our team handles regional regulations, so all your payments stay compliant and secure.

Talk to a Payments Expert