What Do You Need To Know About Accounts Receivable For Your E-commerce Business?

Buy Now, Pay Later (BNPL) payment methods have become indispensable in both the B2C and B2B sectors: around 80% of Germans trust purchases on account. The numerous benefits for buyers explain the high popularity of purchasing on account.

Allowing customers to buy on account, on the other hand, entails risks for businesses: delayed payment, which results in burdensome collection and dunning, or complete default. Companies require an accounts receivable management system to avoid this. This is explained below, along with an example of good accounts receivable management.

What Do Accounts Receivable Management Mean?

Accounts receivable management is a critical function in any business. It has a significant impact on the cash flow, working capital, and balance sheet of the company.

Accounts receivable management, in a nutshell, ensures that debtors pay their invoices on time. However, the process is not quite that straightforward. To ensure that payment terms are met, all invoice purchases must be documented and monitored, which requires several steps.

Accounts receivable management allows businesses to alert customers of impending payment deadlines at an early stage. In the event of payment defaults, it takes over the receivables and dunning process.

How Do Accounts Receivable Management Work?

Accounts Receivable Management walks you through the entire invoice purchasing process. From credit checks to invoicing and dunning, all data and payment targets are documented and controlled. This is the only way to protect a company's cash flow.

Why is accounts receivable management so important?

Below are the reasons why accounts receivable management is so important:

For cash flow

Companies rely on the timely payment of invoices. The ability of a company to pay current costs and invoices is determined by cash flow and liquidity. According to the study "The Domino Effect: The Impact of Late Payments," 9% of invoices in Germany's B2B sector are not paid within the standard payment period. Companies lose 56 billion euros in cash flow each year as a result of late payments. In the worst-case scenario, this results in bottlenecks or even insolvency.

For customer loyalty

95% of online shoppers want to be able to buy on their accounts. When businesses provide their customers with a short-term financing solution in the form of purchase on account, they increase convenience and trust in the payment process, which automatically increases retention. Smooth communication increases customer satisfaction even more: dependable accounts receivable management always keeps buyers up to date on open invoice amounts and upcoming payment deadlines.

For the workload

With a large number of orders and invoices, the internal accounting department of a rapidly growing company quickly reaches its capacity. An external accounts receivable management system is a good solution for relieving responsible employees by ensuring timely payments from customers while also saving resources. Accounts receivable management provides relief even for online stores with high sales and invoice amounts by simplifying invoicing and payment requests. This allows businesses to concentrate on their core competencies.

Accounts receivable management with NCRI

NCRI handles communication with buyers in the event of late payment and assumes the risk of non-payment, giving businesses more time to focus on core business.

NCRI benefits for B2B E-Commerce and marketplaces:

Real-time credit check. Our algorithm checks new and existing customers in seconds - with NCRI, the acceptance rate is greater than 90%.

Reduced operational burden. NCRI assists merchants with payment allocation and the running process, freeing up time for the core business.

Easy integration. NCRI can be easily integrated into your preferred e-commerce platform or storage system.