Is your ERP maximizing your invoice-to-cash cycle?
With all its centralized capabilities, an ERP might seem like the answer to all your prayers. Imagine integrating all the disparate systems for inventory management, the sales cycle, marketing automation, and human resources planning. And those are just a few examples.
But before you get too excited, remember this: ERPs can manage many different processes, but there are some that they don’t generally focus on. Sadly, invoicing gets the shaft in most ERPs.
Yes, ERPs include basic invoicing functionality. You can create and print out invoices for mailing, accept customer payments over the phone, and manually reconcile payments. But that’s just not enough for the speed of businesses today.
So what are ERPs missing when it comes to invoicing? Here are 3 key gaps:
Zero invoicing automation
Do you really want your accounting staff spending time manually creating, printing, and mailing invoices? Unfortunately that’s the experience they’ll have with most ERPs, and that process can really slow down your invoice-to-cash cycle.
Invoices take weeks (if not months) to get paid as they sit in the mail. And your business’s costs are higher due to printing, stamps, envelopes, and employee time. Paper invoicing costs roughly $6-$10 per invoice!
With an invoicing platform, you can do everything online. Send invoices via email to speed up delivery and cut down on material costs. Take advantage of automation features to handle complex billing logic without the manual effort. And automatically apply payments via online payment processors.
No digital billing experience
ERPs frequently provide a sophisticated online experience for their own customers - that means you. But an online customer interface for your customers is usually lacking. And it makes sense: if ERPs only allow you to print off invoices to send in the mail, why would they offer a way to view them online?
Without a digital billing experience, you’re missing out on opportunities to shorten your invoice-to-cash cycle. Even if your customer receives the invoice in the mail, the first thing they might do is look at the invoice for a website where they can pay online. Without that information, you’re back to waiting for their mailed payment.
Invoicing providers can fill that gap with an online customer portal, where customers can view historical invoices, make payments, update payment information, and file invoice disputes. That means faster payments and reduced phone time for employees, as customers can access the bulk of the information themselves. And many portals are customizable, so your business gets another opportunity to extend your brand presence.
Limited A/R reporting
In addition to faster invoicing and online customer tools, another proactive way to speed up your invoice-to-cash cycle is to analyze customer invoice data to look for problems. Most ERPs offer a wide variety of reports, but accounts receivable reports are generally not on their list.
Robust invoicing reports can help you target delinquent payers in a variety of ways. You can look for patterns in repeat offenders and offer new payment methods, decide how to settle bad debt, or even reach out to customers with upcoming expiring credit cards. Without these critical reports, you’d have to extract data from your ERP and manipulate it manually - and who knows how long that would take!
Don’t get us wrong: ERPs are highly sophisticated platforms that cover a large swath of business needs. But when it comes to invoicing, your business likely needs more than most ERPs can offer. Give yourself a full suite of invoicing capabilities by connecting your ERP with a platform like Invoiced.
Want to learn more? Contact us today for a customized demo.