Despite its importance to cash flow and overall revenue, accounts receivable (A/R) far too often becomes an underdeveloped or outdated operation, even among enterprise businesses. Manual processes, unnecessary errors, and disjointed workflows drag out payment timelines and cause growth to become stagnant. These problems only compound as organizations send out hundreds, if not thousands, of invoices each month.
Flexible, efficient A/R is a focus for us here at Invoiced by Flywire as we deliver accounts receivable automation software to businesses across the globe. In this article, we’ll outline some of the A/R challenges that enterprise-class companies commonly face as they continue to thrive, enter high-growth periods, and expand internationally. We’ll also discuss how the right software can make all the difference in overcoming these hurdles even quicker.
Challenges of scaling your business’s accounts receivable process
Growth always demands concessions, forcing you to rethink and rework what you’ve done previously to accommodate higher transaction volumes. What worked for you while you were a small- or mid-sized business will no longer be viable once you hit certain growth thresholds. In fact, many of those old measures may prove to be a hold you back, particularly during sales spikes or as you reach new markets.
Ultimately, your ability to appropriately scale with business opportunities directly correlates with how much you can grow and how much of the market you can command.
Enterprise businesses face traditional A/R roadblocks, but on a larger scale
For small- and medium-sized businesses, scaling your organization generally requires less precision. After all, if your billing process is managed by one employee using manual processes, doubling your sales simply requires hiring another team member or an automation investment. But when A/R is integrated with enterprise accounting software and coordinated across various teams and departments, even a 5% increase can break down workflows and produce crippling bottlenecks.
Some common barriers to scalability that enterprise-level businesses face include:
- Process complexity: At this size, you are likely dealing with multiple customer demographics that require varied workflows, credit terms, payment channels, and more to meet their unique billing expectations. Each change made to your A/R, no matter how minor, needs to be reflected across all of these dimensions.
- Automation gaps: As previously mentioned, many enterprises still lean heavily on manual processes that unnecessarily couple your growth to how quickly you can locate, hire, and onboard new staff.
- Interconnectivity: Your A/R operations impact more than just billing, with the data surrounding these financials influencing production, budgeting, payroll, technology investments, and more. When growth creates revenue bottlenecks, subsequent decisions either need to be delayed or made with outdated information.
High-growth businesses require greater flexibility to meet shifting demands
When the opportunity arises, it would be foolish not to capitalize on any new opportunities that grow your revenue, market share, or brand. Unfortunately, rapid progress is often accompanied by mistakes could have otherwise been avoided with more gradual, deliberative development. Accounting for the fact that inefficiencies tend to compound exponentially at scale, these mistakes can be incredibly damaging.
Some common barriers to scalability that high-growth businesses face include:
- Liquidity challenges: When your business’s A/R lags behind your sales, you can easily run out of cash to cover daily operating expenses, not to mention any actions you might be taking to alleviate pressure from your expansion.
- Inflexibility: Enterprises can struggle with agility, having fashioned layered processes and intricate IT architectures to accommodate their sizable workflows. Unfortunately, spikes in sales and production often demand that new business practices be embraced quickly.
- Hiring: Similarly, no matter how much automation you integrate into your A/R, you’ll still require a workforce behind the scenes to keep these processes and workflows moving smoothly. Introducing new employees is rarely done quickly, particularly when striving to keep policies and governance consistent.
- Unsure forecasting: If your budgets and projections are built using historical data, how do you prepare for the future when your growth has been unprecedented?
International companies navigate complex governance challenges alongside layered expectations
Whether via steady or rapid growth, most enterprises will eventually expand their markets to new countries. As noted in a survey commissioned by Flywire back in 2023, international accounts receivable creates a whole new host of hassles. When asked about their primary roadblocks to A/R success, enterprise-level respondents whose companies operated across at least two international borders most frequently cited fragmented visibility into customer interactions (36%). Their third most cited challenge was insufficient insight into A/R processes (21%).
These gaps can, in turn, make it difficult to respond appropriately as traditional scalability challenges begin to compound with each new frontier your business crosses. Some common barriers to scalability that international businesses face include:
- Regulatory burdens: Each new nation, or even simply each region you tap into will have its own set of laws to dictate how you must manage your A/R operations. This could range from how much tax you collect, to where you store your financial data, to how you recognize revenue. Managing complementary or sometimes even contradictory expectations will consume more of your time, money, and energy.
- Currency conversion: Countries across the world use a variety of legal tender. Even electronic payments can be subject to varying platforms or formats depending on where the money is being routed. As such, your global accounts receivable and its corresponding workflows will need to become currency-agnostic.
Key features of scalable accounting software
As previously mentioned, manual A/R processes will dramatically undermine your company’s ability to grow efficiently, while the right technology complemented by smart policies can empower you to keep pace with, as well as ahead of, your success. However, not all platforms deliver the same complement of features and capabilities, making it critical that you choose wisely.
But what is the most scalable accounting software? Or at least, how can you be sure that you’ve found the right fit?
Unfortunately, there is no one right answer to this question as it can be highly subjective. Depending on the nature of your business, your customers’ industry, where you operate, and a number of other factors, the nuanced requirements for your A/R can vary significantly. However, there are a few key software features that will prove useful for most businesses,
Automation centralizes processes, mitigates common errors, and accelerates cash flow
Automation is one of the most cost-effective and useful additions you can make to your A/R efforts. Automated workflows keep your billing and dunning efforts moving quickly and consistently, avoiding unnecessary delays and errors. Even better, these capabilities can scale with your business growth, at most requiring additional processing power to handle sales spikes.
Broad integration support protects existing technology investments
Many large-scale, high-growth, and international businesses lean heavily on their ERP systems, letting these platforms serve as a central control center and data store for all of their accounting and back-office operations. As you introduce new software, you’re business will want to ensure that it can seamlessly access, manipulate, and update ERP data not only within your current platform, but with any other major solutions you may transition to.
In fact, in a survey commissioned by Flywire in December 2022, 89% of financial professionals that responded stated that their businesses would save money if their cross-border A/R were more tightly integrated with ERP.
AI streamlines processes and decision-making when you advance beyond human skillsets
High-growth businesses can particularly benefit from leveraging AI-powered tools to optimize invoice-to-cash and payments cycles. For instance, Invoiced by Flywire features a CashMatch AI algorithm that applies incoming payments to the appropriate invoices, accounts, and balances instantly and independently of payment volumes. AI technology can prove invaluable in proactively balancing cash flows or intelligently assessing risks.
Global payment processing simplifies life for your customers and compliance team
Obviously, this function is a hard requirement for promoting international A/R efficiencies. If you operate across borders, you’ll want your solution to be able to easily transition between currencies and align with tax collection, reporting, and data management requirements with minimal intervention from your staff. Ideally, this offering will also be backed by a broader payment processing network that can keep your transactions moving quickly and smoothly across borders.
Why enterprise, high-growth, and international businesses need flexible accounting software
For your business to thrive, you need an agile, adaptable A/R solution that can not only compensate for the aforementioned challenges, but also grow with you. After all, whatever operational challenges you’re facing today may be completely different tomorrow.
Regulators and oversight bodies will continue to add new legislation and modify their expectations. Customers will increasingly demand real-time, personalized service when it comes to billing and payments. Not to mention, new market and technology trends will need to be accounted for. That said, a versatile platform, like Invoiced by Flywire’s Accounts Receivable Automation software, can help you:
Drive efficiency gains with automated invoicing and collections
Our software can handle complex billing practices, allowing you to tailor your A/R strategies to the varied needs of your customer pool. Draft payment requests that can readily accommodate subscription services, discounts, variable credit terms, and other nuances. At the same time, pursue outstanding invoices with minimal required employee review using our Smart Chasing feature.
Cater payment processes to the competing expectations of both regulators and consumers
Leverage the global payment capabilities of Flywire software to help ensure that you are aligning your A/R operations with the collection, payment processing, and data management guidelines of 240 countries and regions across 140 different currencies. At the same time, streamline self-serve portal that empowers your users to initiate transactions, update profiles, dispute charges, set up AutoPay, or manage subscriptions independently.
Make smarter choices with the right data at your fingertips
Our pre-built reports and Advanced Reporting add-on make it easy to capture and parse your available metadata into a digestible, easy-to-understand format. Armed with this insight, you can make data-driven choices about the future of your A/R operations and your business. Invoiced by Flywire can also deliver highly accurate cash collection forecasts by leveraging existing invoices, autopay, payment plans, promises-to-pay, and customer payment histories to streamline your budgeting and planning efforts.
A billing solution for all stages of growth: Invoiced by Flywire
If you’re an enterprise business that is experiencing steady, rapid, or global growth, you can benefit from exploring what our Accounts Receivable Automation software has to offer. We’ve designed our platform to cater to a variety of needs, and our ongoing development roadmap reflects a commitment to delivering new functions and capabilities targeted at keeping your A/R simple, fast, and effective.
Schedule a demo today to learn how we can grow together.
