Accounts Receivable (AR) sits at the heart of every business because cash coming in, reliably and on time, is what keeps everything moving and supports growth. Getting paid promptly matters in every sector, especially in industries like telco and utilities, where capital investment is high and competition is intense.
“Our priorities are managing cash, overseeing acquisitions and minimising risk. We don’t want to wait too long for money to come in,” according to a Bottomline telco client.
For many organisations, that expectation collides with the realities of legacy systems and fragmented payment processes.
The quickest way to unlock working capital is to collect the cash already owed to the company. Streamlining and enhancing the AR process will also improve cash forecasting and reliability, which ensures the company has enough liquidity to grow and maintain momentum.
Yet AR is often overlooked until something goes awry. As one Bottomline utilities customer commented: “Cash collection is really important. But it’s one of those things that goes on in the background. And when it goes wrong, it goes very wrong.”
Today, AR is attracting greater attention, as it moves from being viewed as an operational function to playing a more strategic role. Companies are realising that AR is central to several important business areas, such as customer experience, buyer-supplier relationships and compliance. As such, many are modernising AR to help them thrive, particularly in high-volume, highly regulated sectors.
Delivering Business Benefits
In the recent webinar, ‘From Back Office to Frontline: How AR Powers Success in the Telco and Utilities Industries’, Bottomline experts identified several strategic goals for AR departments:
- Improving the customer experience
- Having agility to pivot to different payment methods
- Being able to see and predict when cash is coming in, so the company can deploy it most effectively.
A great customer experience starts from within: payments need to be connected, integrated and embedded, and flexible. For example, a customer wants a smooth and easy experience when paying their chosen telco or utilities provider. Often, they want to save time by setting up ‘fire and forget’ payment instructions, such as Direct Debits (DDs).
For telco and utilities companies, making customers’ lives easier creates a competitive edge. A simple, frictionless billing experience is a powerful way to strengthen customer loyalty and reduce churn. Accounts Receivable has a direct impact on this process. By delivering clarity and convenience, it influences customer satisfaction and supports the company’s broader growth strategy.
One of the most visible ways AR does this is through payment flexibility. There’s now a wide range of digital payment methods, such as Pay by Bank, instalment plans and card payments, as well as DDs which are favoured in the telco and utilities industries.
However, some consumer and business segments still prefer paper-based transactions. Companies need to cater for this requirement too, so as to connect and engage with customers via a wide variety of payment methods.
But offering choice is only part of the picture. The real challenge is maintaining visibility and control as payments flow in through multiple channels.
Managing cash flow effectively is a priority in the current economic environment, which pushes visibility into incoming payments to the top of the agenda. AR departments need to easily and quickly see what has been paid, as well as upcoming payments, to improve forecasting and identify trends within the receivables space.
The speed at which telcos and utilities respond to missed payments or unpaid invoices can set providers apart. Rapid recovery of outstanding balances not only improves cash flow but also positions the business for growth—freeing up capital for investments, acquisitions, and innovation.
Next Level AR
As a strategic team, AR underpins growth and the quality of the customer experience. That starts with how AR teams are equipped and how effectively they operate across tools, processes and payment flows.
With next-generation tools and services, the AR team can work more efficiently and eliminate repetitive tasks through automation. This improves accuracy and speed, while freeing up staff to focus on high-value, complex issues that require judgment and expertise. As a result, employee satisfaction (ESAT) rises—making the job more engaging and rewarding—which naturally translates into better customer interactions and stronger relationships. For example, if AR is engaging over the phone with a customer who has an outstanding balance, immediately sending out a payment link or guiding them through the payment journey on the website will result in a higher collection success rate.
Beyond day-to-day collections, a strategic AR function also plays a critical role in identifying missed payments. For example, many companies saw an increase in cancellations, or exceptions, during the recent cost of living crisis. An AR team can prove its value by recovering the money owed from these exceptions as quickly as possible. However, none of this is possible without detailed, accurate and transparent reporting.
That same visibility and control is also critical as fraud increasingly targets the wider payments process.
In the face of increasing fraud, AR teams should review how personal customer information is stored. Fraudsters target not only the payment itself, but also adjacent processes. Having the right tools in place to combat fraudulent activities is not only a regulatory or payment scheme requirement but should be a fundamental part of serving customers. Bank account details are among the most critical personal information that companies hold. Therefore, being able to store account information in a secure vault outside the company’s systems, operational processes and individual teams, as well as tokenising the data, will help reduce the risk of being breached.
Choosing The Right Strategic Partner
AR departments should look to their payments provider to help them achieve their goals.
Agility means having the right tools in place to support operational payment processes, as well as having the flexibility extended to customers, whether over the phone, through the website, a mobile app, or even the post.
A strategic AR department should look for a payment partner with a single, consolidated platform that delivers a sophisticated experience across multiple payment channels. They should also look for a platform that is trusted, established, financially stable and embedded in the national payments ecosystem. Bottomline, for example, is part of several industry bodies and regulatory working groups making it knowledgeable about incoming market changes and helping customers understand how they will be affected. Bottomline’s engagement also ensures that its products remain fully compliant and resilient as changes are introduced.
In addition, a payments provider should pledge ongoing investment in research and development (R&D), which goes hand in hand with agility. A financially stable provider with continued investment in R&D is better positioned to adapt as new legislation and requirements emerge, including initiatives such as the UK’s National Payments Vision.
Customer Success
The webinar concluded with a case study of how a large UK telecommunications provider created a more agile AR department. Plusnet was faced with a legacy billing system, which was outdated and had security vulnerabilities. Its current CRM offers an end-to-end operating system for utility companies but doesn’t allow the storage of bank details.
Bottomline’s scalable solution included a digital signup process, where payee bank details are validated and securely stored, as well as automated reconciliation and interchangeable payment methods upon failure based on the customer’s preference. The result is automated, secure and streamlined collections, while ensuring compliance with industry regulations and data protection standards. Through deploying PTX, Bottomline’s cloud-based payment platform, Plusnet was able to unlock the full value of automated AR.
“Every area where PTX is deployed has delivered value to the business and our customers. The ability to simplify the different customer journeys such as collections, refunds or payouts, all enhance the overall customer experience,” said Mairi Macconnell, systems operations team leader, Plusnet.
As illustrated above, it’s important to boost the agility of the AR team’s tools and services, as well as integrate with a payments partner that can support the company’s growth. AR can then move from being operational to strategic.
Key takeaways:
- AR is central to customer experience, buyer-supplier relationships and compliance
- Utilities and telcos can modernise AR to thrive in high-volume, highly regulated environments
- Improve control and visibility with Bottomline’s latest reporting capabilities
- Drive towards operational excellence and resilience across complex payment flows through a single and integrated, interoperable platform.