The first quarter of 2020 has rudely awakened us to the specter of a pandemic and the resultant economic consequences. Businesses already struggling with a slowdown, now have to plan for a double whammy. In these testing times, where CASH IS KING, one needs to do everything possible to quicken the order-to- cash cycle. It is estimated that in a country like India, average collection cycles in B2B range from 45 to 90 days depending on the sector, and the buyer profile. Whilst a liquidity squeeze could explain the phenomenon partially, it is a cold reality that cumbersome processes are still a major stumbling block to getting paid faster.
A typical Accounts Receivable cycle in B2B starts with delivering the invoice to the buyer, following up via mails, phone calls, meetings etc, submitting supporting documentation, and waiting for the buyer’s finance department to release the funds.< And God forbid if the customer raises a dispute. All hell breaks loose as there’s a scramble to avoid blame for the dispute. Sales will blame Finance, Finance will blame Operations, Operations will blame Technology and so the vicious cycle continues. In these anxious moments, there are heated internal exchanges on who’s responsible for what, internal blame game, passing the buck and other typical traits visible when processes are manual and inefficient. One would think that the problem would end with the buyer paying, but in many companies, there’s a bigger problem with payment reconciliation, knocking off the right invoice, accounting for penalties / deductions etc Given the above, isn’t is obvious that there’s a crying need for automation of the entire A/R process? Why can’t we have automated invoice delivery, automated payment reminders, internal task allocation and tracking, and finally automated payment reconciliation. Imagine the savings of thousands of man-hours, not to speak of the reduction of errors. The most powerful feature of an A/R automation platform is the dispute resolution mechanism. Disputes which are offline take time to resolve because of lack of information and allocation of tasks to the right person. These delays add up unwanted days to the collection cycle and cannot be considered for overdue days penal interest, if any. Does investing in Accounts Receivable automation sound like a productive investment ? Kapittx is one of the best AR platform which will ensure you getting paid faster. Request for a demo now and experience how Kapittx will help you ‘Get Paid Faster’.
Anand Ramchandran Co-Founder and CFO, Kapittx