How are AP and AR the 2 Sides of The Same Coin?

Accounts Payable (AP) and Accounts Receivable (AR) are two sides of the same coin when it comes to the finance function. In 2022 CFOs are prioritizing secured, real-time, controlled processes and profits for their organizations and there’s no other way to ensure that than with automation.

Yooz: Purchase-to-Pay (P2P) automation & HighRadius: Order-to-Cash (O2C) automation experts will share the true value of automating all your financial processes.

In this blog we cover:

  • Common challenges
  • Trends for both AP and AR
  • True costs
  • Reasons to automate

Common Challenges

Many industries, even amid the pandemic, saw growth, especially in the healthcare, real estate, and renewables industries and even retail saw enormous growth in 2021.

As a business grows, it may seem obvious that the scale of operations and the number of transactions increase.

So as an organization grows, so do the requirements to support that growth. This includes the features and functionalities required when looking at solutions to handle the growth and manage the upward scaling of your business. And with growth brings more complexity, so costs also rise.

4 Key AP Trends

According to the recent Ardent Partners annual survey:

  1. 70% of Mid-Market Enterprises (MMEs) have prioritized AP automation in 2022 . That’s a 48% increase since 2021 in the appreciation for the value of AP to the overall organization.
  2. B2B payment strategies are either 37% paying early or 30% paying late but over 1/4th of MMEs don’t have a payment strategy at all.
  3. Companies say the time to process an invoice is 12.9 days which remains unchanged from 2021.
  4. A post-COVID and remote heavy world has intensified the need for greater security and fraud prevention, especially for software like AP automation.

4 Key AR Trends

  1. Rapid adoption of digital paymentsThis means faster payment of accounts by customers, optimizing cash flow successfully, and a seamless cash flow.
  1. Real-time credit risk monitoringReduce bad debt by monitoring changes in your customer’s credit profile on a daily basis. Real-Time Credit Risk Monitoring helps you to monitor your customer portfolios daily on a real-time basis to track any micro or macro-economic fluctuations in your customer’s credit profiles.
  1. Personalized customer experienceEach year customer expectations increase in regard to ease of doing business. A smooth, streamlined experience is the minimum requirement for a business to attain, engage and retain good customers these days. In the accounts receivable/collections space, for customers this means a clear, easy process to receive and understand an invoice, automated statements, or reminders ahead of the due date.
  1. Automating AR to the core – This means segmenting customers based on strategic importance, payment performance, and credit history. Prioritizing worklists to maximize collector effectiveness. Automate Dunning and correspondence by reaching low-risk customers through emails via correspondence templates. A self-service customer portal gives customers the flexibility to access invoices and choose payment methods.

True Costs

The typical pain points of traditional Accounts Payable and Accounts Receivable are well known; you probably experience them every day. However, the financial impact on the organization is often underestimated or unknown.

AP Side

For example, did you know an invoice traditionally costs an organization $15.55 to process? Or that it takes 28.5 days on average from receipt to payment?

Studies show that, with automation, organizations can lower their invoice processing costs by 80%.

AR Side

The cost of processing a check can be anywhere from $4-$20. Versus the cost for processing an ACH which is $.29

Why Automate AR

  • Modern payment processing systems can afford finance teams much-needed flexibility in terms of payment formats.
  • Mitigation of risk with secure payment processing. Certifications like PCI DSS ensure safety standards are met.
  • Automating AR can save organizations overhead costs and fees, positively affecting the bottom line.

Why Automate AP

  • Automating the entire purchase-to-payment process eliminates stacks of paper and manual tasks including manual data entry and the errors that typically arise from it. – both manual errors and some fraud risks
  • Automated invoice and payment processes give you the highest level of security on a Cloud-based platform. Combined with advanced AI-powered technologies AP automation solutions combat and detect fraud.
  • AP automation removes manual tasks while also providing improved visibility and control over important financial data to allow organizations to make informed decisions based on real-time and accurate data.

About Yooz

Yooz Provides the smartest, most powerful, and easiest-to-use cloud-based Purchase-to-Pay (P2P) automation solution. It delivers unmatched savings, speed, and security with affordable zero-risk subscriptions to more than 4,000 customers and 200,000 users worldwide.

Yooz’s unique solution leverages Artificial Intelligence and RPA technologies to deliver an amazing level of automation with extreme simplicity, traceability, and end-to-end customizable features. It integrates seamlessly with more than 250 financial systemsexceeding any other solution on the market.

Yooz North America is headquartered in the Dallas, Texas metropolitan area with global offices in Europe.

About HighRadius

HighRadius is the only provider of the Integrated Receivables platform for the entire credit-to-cash cycle. We are the #1 receivables player in the Fortune 1000 market today, and we have a fast-growing presence in the mid-market space as well. On an annual basis, our platform processes over a trillion dollars of receivables.

In 2020 we made two exciting announcements: HighRadius is now classified as a Unicorn Company, which means we are a privately-held start-up valued at $1B. We achieved the unicorn status and also launched our dotOne performance dashboard for global businesses aspiring to achieve dotOne (0.1%) status. We also launched our RadiusOne A/R suite specifically for mid-sized businesses.

We integrate with many ERPs including Microsoft Dynamics.

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