The 5 Accounts Receivable Stats from Hell

By Nick Roquefort-Villeneuve, Global Marketing Director – Amalto Technologies 

I truly admire your courage…

Take a deep breath… In the United States:

  • On average, companies write off 4% of their receivables as bad debt. For a $500Mil organization, that means a $20Mil expense every year…
  • 11% of customers never got the invoice…
  • 39% of invoices are paid late…
  • On average, most businesses offer customers a 28-day credit term but in reality, the average DSO is 67 days…
  • Businesses lose 52% of the value of their B2B receivables that are not paid within 90 days of the due date.

How is that even possible...? Well, the answer lies in two words: Ineffective Automation.

There are quite a few AR automation solutions out there, but are they truly effective? Well, what makes an AR automation solution really effective? 

1. Single Repository for Purchase Orders and Invoices: Without a single repository where you can immediately access all the purchase orders you’ve received and the invoices which have been validated against those PO’s, managing those documents may quickly become a nightmare… or is it already? May I suggest you ask how many of your invoices are currently disputed, so you can get a better idea?

2. Seamless (Re)Formatting of Purchase Orders and Invoices: You don’t want to have to manually reformat your customers’ PO’s in a format your ERP system can understand, and you want to avoid having to tweak the structure of your invoices, each time you need to push one out to a client, so the buyer’s accounting or ERP system is able to assimilate all the information you send. In other words, each document should flow seamlessly from their system into yours and back to their system. Anything different will create much hardship and an out of control DSO. 

3. Real-Time Access to Information: Any user interface that doesn’t allow you to view the entire state of your organization’s AR, thanks to KPI’s automatically updated in real-time, is worthless. How else could Senior Management have a pulse on expected cash-flow and implement predictive measures to better manage internal capital? 

4. Workflow: Document an audit trail and automate all dispute resolutions. From the click of a mouse, you can deal with exceptions. So, you do not need to rely on multiple parties to find resolution to an invoice being disputed any longer. You save a tremendous amount of time and human resources.

5. Dedicated Cloud: Why would you want your data to be stored on shared servers? Dedicated cloud is the optimized cloud, because it can be customized to respond to the customer’s exact requirements and accommodate sudden configuration changes, among other key-features.

Naturally, a team of top-notch developers who not only can connect you to your customers’ portals but also be responsive when your requirements change over time is also what makes a whole AR automation package efficient.