3 ways to turn your AR program into a competitive advantage

As challenging economic forecasts continue to roll in for 2023 and beyond, uncertainty has become the one constant in today’s business climate. More than ever, companies must find new ways to edge out the competition in attracting new customers and retaining those they already have. The best way to do this is by meeting customer needs and solving their problems. 

Most companies don’t typically think about their AR program as a driver of growth or as a competitive advantage, but a well-managed, technology-driven AR program–-one that reins in lengthy pay cycles without costly manual processes–-can help you grow sales, delight customers, and retain them for long-term recurring revenue. Here’s how:

Your customers are looking for more credit and longer terms, and they no longer hesitate to make increasingly substantial transactions online. A 2022 McKinsey report found that 77% of business buyers are willing to spend $50,000+ on a single remote or online transaction, and 35% of respondents were willing to spend more than $500,000 on an online purchase. 

However, typical in-house credit lines can’t support transactions of that size–at least not without increasing risk significantly. According to a recent Capital One study, the number one challenge of offering credit to B2B customers is that customers pay slowly, which negatively impacts cash flow.

A full-service B2B accounts receivable solution can provide larger lines and extended terms for your customers. You can get paid for every sale without having to wait 60 to 90 days or more, which means you can offer your customers what they need—without taking on more risk.

Today’s business customer expects the same buying convenience they get as consumers–-a frictionless experience across traditional channels as well as e-commerce and mobile apps. 

In fact, Digital Commerce 360 reports, “Despite lingering challenges like inflation, supply chain disruption, and a labor shortage, U.S. manufacturers and distributors grew total B2B sales in 2022 to $14.86 trillion—up 14.5% from $12.98 trillion.” Of course, customers still expect you to have the product they need, have it delivered promptly, have the order accurately fulfilled, and be billed without error. 

In a world where Amazon has revolutionized the consumer buying experience–-and has done the same for business–-offering a seamless omnichannel experience will earn you sticky, hard-to-leave relationships. 

Make sure that your B2B AR program can work with an omnichannel solution for taking orders—including providing flexible terms and payment options—and that it can seamlessly integrate into your existing business systems and workflow.

Just as buyers expect a smooth online purchasing experience, they also want to manage their credit accounts whenever and wherever they prefer. 

But for the most part, they’re stuck with outdated manual processes. While paper check payments are declining, they still represent 33% of B2B payments in the U.S. and Canada according to a 2022 survey by the Association for Financial Professionals. With an outdated or substandard online self-service portal, you’ll have more calls, more paper, and more headaches—and customers are more likely to miss payment deadlines due to inconvenience, oversight, or the time it takes to deliver a check. 

Consider offering your customers data-driven instant credit decisioning and online self-service account management capabilities that let them:

• easily pay online
• track available credit
• request more credit
• dispute a charge
• review their purchase history 

Your internal processes should offer your own employees the same convenience—with digital tools that let them send and receive applications, see pending settlements, and maintain visibility into customer credit lines, purchases, and payment history.

The world of B2B purchasing is evolving quickly. Sooner than you think, features like flexible net terms and instant credit decisioning will not be seen as differentiators. Instead, they will be regarded as minimum requirements for entry.

But extending credit terms to customers doesn’t have to drain your business’s time, resources, and cash flow. Instead, a well-managed B2B AR program can provide you with a competitive advantage that drives growth, profitability, and customer satisfaction.

Capital One Trade Credit offers a full-service B2B accounts receivable solution for enterprise companies. Backed by the scalability and security of a Top 10 U.S. Bank, our proprietary platform wows customers and drives sales. Choose the program components your business needs while providing each customer with tailored terms and billing treatment. It's all customizable for the way you do business. 

Contact us to learn how our full-service AR solution can assist your business. Send your question(s) to: tradecredit@capitalone.com.