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The AP vs. AR tug-of-war: Ending the struggle to manage multiple AP platforms

By Mitchell Rose, Senior Vice President & General Manager, Corporate Segment, Billtrust. This article originally appeared in the Q3 2020 edition of Perspective by CRF.

Is there a tug-of-war going on between your AR team and the ever-increasing number of AP platforms your customers are using? Do you feel like you’re getting perilously close to being pulled into the payments mud puddle? Before we examine all the challenges you’re facing — and before you get dirty — let’s look at the facts.

Accounts Payable portal usage is on the rise, and there’s no turning back. Nearly 3 out of 4 of you who participated in a 2020 study conducted by Nacha, the Credit Research Foundation and AP Now, see customer portal activity increasing over the next three years. 

Other research agrees: a recent Gartner study states that, by 2025, over 50% of mid-market and large businesses will have deployed procure-to-pay suites. Plus, AP automation spending, according to a Forrester forecast, will be nearly twice that of AR in 2021. Advantage AP.

To pull even in this game of tug-of-war, you have some choices: add more “muscle” or add more “automation.” Let’s go over your options.

Tell your customer your organization won’t support their AP platform

“The cost to use the portal is not advantageous,” say 36% of Nacha/CRF/AP Now respondents when asked for their top reasons why they don’t use customer portals 100% of the time. That tied with “lack of staff to input invoices” as the category’s top two responses. 

Combined, that makes for a pretty compelling argument to just say no. It’s not a great option, though, because customer service is everything, and you want to be seen as the company with which doing business is easy. The make AR a competitive advantage philosophy is a better bet because, in a perfect world, you always want to present invoices and receive payments the way your buyers prefer. 

But, with your customers using so many different AP platforms, which ones will you embrace and at what cost? It can be a tough call. 

Hire more people or outsource to support manual keying

Back to the Nacha/CRF/AP Now study: 93% of respondents indicated having customers with portals, while 82% report that portals are requiring significant additional staff time. As a result, AR teams are often forced to manually key invoices into potentially dozens of online portals, which the study says is your number-one pain point. So, if you have the budget to do so, more people on your side helps you even things up in tug-of-war. But, automation ultimately wins this war, not more manual tasks. I bet your budget agrees.

Invest internally in AP portal integrations

If you are fortunate to have internal IT resources at the ready, this can be a viable option. Typically, these types of integrations involve EDI or Robotic Process Automation (RPA) which uses technology to complete repeatable tasks, automating much of the manual work that has been involved in trying to integrate with AP portals. 

RPA technology is able to automate the login process to these AP portals and input the necessary information without human intervention. These software robots can “wake up” when certain data arrives (e.g. a bank payment or AP portal login/form), act on​ the data and pass the transformed data to the next process in the workflow. Of course, you may be involved in another tug-of-war with this one: you vs. your IT group. 

If custom integrations aren’t their thing, you may run into a roadblock. And with the potential of several dozen portals to customize (and more portals coming in the future), it may be too much for IT to handle. Finally, with the pandemic, IT might have other issues they’re trying to address. 

Use a third party to automate

The smartest of smart solutions, using a third-party vendor for AP portal automation gives you both the intelligence and muscle to even out the tug-of-war while taking advantage of the RPA technology I just mentioned. Today’s portal integration systems integrate with most of the leading accounts payable portals to automatically deliver invoices, so it can truly be a one-size-fits-all solution. 

Look for a vendor who is already integrated with the AP portals you use, as well as ones you don’t, to future-proof for when you take on additional customers. Also, if you’re working with an AP portal that a vendor doesn’t support, they should be able to bring that portal into their system to provide true customization. 

A word about COVID-19

The COVID-19 pandemic has added a new layer of stress and complexity to the tug-of-war. With work-at-home requirements, your AR team may not be optimized for remote work, with close collaboration among individuals often necessary to get through the workload. Many teams are unable to physically receive paper invoices that have been mailed to an office location, requiring additional interaction with buyers and adding time to the order-to-cash process. Portal automation helps solve these issues by allowing teams to remain efficient and productive when they aren’t co-located.

How payments networks add even more automation

For real muscle and genius-level intelligence, another way to automate is through a payments network. Today’s payments networks automatically connect suppliers like you to many of the different AP platforms your buyers are using to pay you, as well as third-party banks and ERPs. 

Here’s how it works: when your invoice is approved to pay, a payment network captures the payment instruction and moves the money to you based on your preferences. It then obtains the remittance from those systems, posts it and presents it to you in a format compatible with your AR process. Payments come in the same remittance file with the same funding mechanism you’ve already established. Besides receiving payments faster, a payments network allows you to broadcast your payment preferences to AP platforms. 

Best of all, you’re also not asking your buyers to change their payment behavior, all while conveniently accepting payments from their platform. 

The bottom line? AP portals are here to stay. Your challenge is how best to make the AP vs. AR tug-of-war a game you can both win. 

About the Author

Mitch Rose is Senior Vice President and General Manager, Corporate Segment, where he heads up Billtrust’s go-to-market strategy. Prior to this role, Mitch led Partner Solutions at Billtrust, where he was responsible for leveraging third parties to bring innovative solutions to the Billtrust customer base. Mitch also led Billtrust’s marketing team, growing revenue ten-fold.

Before Billtrust, he held senior-level marketing positions with Coca-Cola, Mattel and Warner Lambert and led marketing at start-up company PointRoll. Through the course of Mitch’s professional career, he has created breakthrough marketing campaigns, successfully battled competitive threats and led teams in the development of industry-leading new products.

Mitch holds an MBA from Columbia University in Marketing and a BS in Applied Economics from Cornell University.

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