Optimizing the Receivable Process and Reducing Average Days to Pay with Sage Intacct
Arguably one of the best things you can do for your business from an accounting standpoint is to make payments from customers easier and optimize the collections process, especially now.
Many businesses in the US take the following approach to invoicing their customers:
- Create an invoice in their accounting software
- Email or mail the invoice to their customer
- The Customer then writes a check to pay their invoice or perhaps pays via ACH
- The business receives the check (depending on the speed of the mail carrier) within a few days
- If an invoice becomes past due, accounting follows up on the invoice with an email or call. The email lives in the accountant’s email outbox with no real visibility into when this invoice was last followed up on.
- Then one day you find yourself with 10,000 customers (which is great!) and 1 person following up on all past due invoices full time. Certainly not every customer will miss their payment due date, however there are also a lot more invoices to follow up on with 10,000 customers than with 100. Now, add in a pandemic where cash is already being constricted, the last thing you’d want to do is to make it harder for customers to pay you. If a customer is going to have to choose who to pay, I’m sure you’d like them to choose you.
By optimizing the process outlined above, we make it easier for customers to pay us and thus lower average days to pay. Average days to pay is a common metric tracked by businesses (and of course easily buildable in Intacct – we’ll save that for another post). Average days to pay is defined as the total number of days to pay divided by the number of closed invoices. It gives you a quick assessment of the customer’s overall credit risk by providing the average time it takes a company to pay bills. Now, let’s see how we can optimize this process and reduce our average days to pay. Our plan of attacking the average days to pay metric is from two angles:
- Making payments easier for customers
- Optimizing the collections process
Our first angle: making payment easier for customers.
Aside from accepting checks, there are a few options for accepting other forms of payments from customers.
- Using Intacct’s free online payment feature. This enables the ability to charge a credit card from within Intacct via Paypal/Authorize.net. This option usually works best when a customer leaves a credit card on file with you and has authorized monthly charges. It is even possible to automate charging the card on file when setting up recurring order entry transactions.
- Using a partner on Intacct’s marketplace allows for a “click to pay” option. This enables a customer to click a link when they receive their invoice and pay their invoices securely online. These partners also often offer customer portals, where a customer can log in, see all outstanding invoices, and select which they’d like to pay. Below are a few marketplace partners:
Our next angle: making collections easier for the accounting team.
There are many ways to optimize the collection process with Sage Intacct. Below are a few partners listed on the Sage Intacct marketplace:
- VersaPay – watch a short demo video.
“VersaPay ARC seamlessly interacts with Sage Intacct, allowing you to automate repetitive AR tasks, save time and money, and enable your team to refocus efforts on activities that drive your business forward. Say goodbye to manually matching payments to invoices, resending invoices, and follow-up reminders – let VersaPay’s AR automation platform, do the work for you.”
- Invoiced AR – Watch a short demo video.
“Outstanding Sage Intacct invoices are pulled into Invoiced. Our system then automatically follows up with the customer and gives the option to pay instantly online. Payments received through Invoiced are reconciled back into Sage Intacct.”
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Kathy Jastrzebski is a manager with CLA’s Intacct team. CLA is an Intacct Premier Partner with a partnership that spans over 20 years and more than 1,000 successful implementations. Kathy brings five years of accounting experience along with seven years of Sage Intacct implementation experience. Along with her accounting experience, she has a passion for leveraging technology to lead finance teams worldwide through system implementations with a mission of increasing department efficiency through business process improvements.