Accounts receivable (AR) automation – or receivables automation – is quietly revolutionizing the collections process with unique invoicing and reconciliation capabilities. In this Q&A with Bottomline Product Director Kush Shah, he gets right to the point about the benefits of AR automation as part of a modernized payments offering.
Q: Kush, to begin, please explain the focus of receivables automation as a global solution, particularly as it relates to integrating different payment methods.
Kush Shah (KS): We see value in integrating a wide range of payment methods to cater to different markets, geographies, and customer preferences. This includes direct open banking and card solutions, covering industries such as utilities, telecommunications, and financial services. The goal is to provide a comprehensive suite of payment options that can be tailored to specific business needs and customer expectations worldwide.
Q: What are some positive impacts of receivables automation, specifically in B2B?
KS: In the B2B space, AR automation benefits will be around invoice distribution with instant and flexible payment options. Where regular high-volume transactions are common, businesses can spread their payments into a regular installment plan, with automated collection schedules and reconciliation. It's particularly beneficial for corporate verticals like utilities and financial services.
Q: AR automation and open banking are often mentioned together. Why is that?
KS: Open banking offers significant advantages for large value upfront collections and for exceptions. It automates the entire process, substantially reducing manual errors and improving reconciliation. This leads to increased sales conversions and improved cash flow. The result is a more streamlined, accurate, and secure method for handling large transactions.
Q: Are certain types of AR solutions proving more popular than others, and if so, why?
KS: There's a clear trend towards SaaS-based payment solutions in receivables automation. SaaS solutions offer greater flexibility, improved compliance with evolving regulations, and significant cost efficiencies for businesses. Unlike traditional in-house systems, SaaS solutions can quickly adapt to new payment technologies. This allows businesses to stay current without the burden of maintaining in-house systems.
Q: What are some other benefits of SaaS-based business payment solutions?
KS: Primary advantages of SaaS-based payment solutions include enhanced accuracy, increased speed of transactions, and improved compliance with evolving security standards. These solutions offer substantial cost efficiencies, allowing businesses to focus on their core priorities rather than managing complex payment infrastructures. Additionally, the scalability and API-driven architectures of modern payments enable businesses to easily expand their payment capabilities as they grow or enter new markets.
Q: How does the expansion of payment methods impact AR systems, and what are the larger systemic benefits of AR automation?
KS: The expansion of payment methods has a significant impact on AR systems, necessitating more sophisticated automation to handle diverse transaction types. Automated receivables bring numerous benefits, including improved reconciliation processes and faster cash flow. Also, by offering a variety of payment methods, businesses can meet customer preferences, enhancing the overall customer experience. AR automation within a worldwide network also enables global reach and expansion, as businesses can more easily manage transactions across different regions and currencies.
Q: What challenges do businesses face in managing recurring payments, and how do digital engagement models like AR automation address these?
KS: One of the biggest challenges in managing recurring payments is handling exceptions efficiently. Automated AR can significantly improve this process by providing automated responses to exceptions, and using payment links for streamlined communications. Digital engagement models offer flexibility in customer communications, allowing businesses to use various channels for engagement and payment reminders. This approach not only improves efficiency but also enhances the customer experience by providing convenient and personalized payment options.
Q: Where do integrated solutions have the greatest impact?
KS: AR automation benefits financial institutions and corporates that manage regular billing cycles. These solutions provide real-time data and improved customer experience through instant payment rails. They streamline the billing process and simplify processes. In B2B transactions, these solutions facilitate faster, more accurate payments, improving cash flow and reducing administrative overhead.
Q: In terms of AR processes, what's a key takeaway you'd emphasize for 2025?
KS: A crucial aspect of AR processes is revenue recognition. Automated AR processes allow businesses to realize revenue faster, which is particularly important in transactions where amounts can be substantial. By streamlining the payment and reconciliation processes, businesses can more quickly and accurately recognize their revenue, leading to improved financial reporting and decision-making.