Assessing The Risk Of Forgoing B2B Collection Software
B2B Collection Software
For the finance executive perusing solutions to the order-to-cash conundrum, foregoing the use of B2B collection software can appear an attractive option, particularly in light of budgetary constraints or the complexity entailed in solutions implementation. While opting for manual, systems-agnostic approach may deliver savings in the short-term, doing so carries long-term risk that drastically outweigh potential cost efficiencies.
It is incumbent upon business to establish auto-payment processes that represent secure, seamless, and cost-effective methods of customer payment. Collection software can provide such solutions when business is selling to large enterprises, through facilitating secure and digital payment solutions. In addition to preventing fraudulent chargebacks through encryption, B2B collection software allows invoices to span multiple business, each with its own business partner-agreed terms and payment method. In spite of the iterative nature of trading partner agreements, collection software affords business the agility to respond to the needs of customers and can accomodate for liquidity constraints through payment deferrals, integrated invoices and streamlined reconciliation.
Implementing collection software package carries, of course, some costs. In addition to the initial purchase price, there may be concomitant expenses related to implementation, maintenance and customersupport. This runs somewhat counterintuitive to the aims of the finance executive, however, failing to properly safeguard customer payment solutions and manually managing accounts receivables is bound to encounter discrepancies, resulting in costly arbitration proceedings and customer defection.
In times past, one might be able to mitigate the risk of dropping customer payments by outsourcing payments to third-party. However, in the age of data privacy, business is liable and responsible for serving its customers in secure way. This means that business must ensure its technology solutions are up-to-date, encrypted, and compliant with global regulations. Failing to do so could incur additional penalties and large costs associated with customer data breaches. As such, the failure to invest in customer data privacy and secure payment solutions may have far-reaching costs.
In short, abstaining from properly implementing collection process through collection software can deliver short-term cost amelioration, but the long-term risks of failing to deliver secure and cost-efficient customer payment solutions can be dire. Should business opt for this path, it must bear in mind that long-term costs, both tangible and intangible, are likely far greater than what would have been incurred in properly investing in collection software and digital payment solutions.
