In the grand scheme of things, when running a business, the prospect of “almost cash” is reminiscent of “near beer.” It’s something — but not quite the real thing.
Managing credit and collections — and the accounts receivable (AR) process at large — is an integral part of operations. Finance teams must grapple with invoices and managing their AR, while determining what’s collectible and what’s got to go to collections.
Nothing is certain in credit management, as Billtrust President Steve Pinado told Karen Webster. But advanced technologies can help companies manage invoices more effectively, which helps cement better buyer-supplier relationships, with a positive impact on cash flow.
The conversation came against a backdrop in which Billtrust, a B2B AR automation and integrated payments company, said in an announcement earlier in the month that it bought iController, a B2B provider of collection management solutions, for $58 million in an all-cash deal.
The marriage between automation and invoicing has been accelerating in a meaningful way, said Pinado, where companies realize the need to “chase the long tail of accounts” in ways that sidestep inefficient, manual processes.
‘A Greater Sense of Urgency’
With the pandemic, and the pivot toward work from home, finance teams are examining how to accelerate their own digital transformations.
PYMNTS’ own research has shown that a vast majority of companies — 92% — are in at least some stage of modernizing their AR/accounts payable (AP) processes.
“There’s a greater sense of urgency,” Pinado said, and he noted that sense of urgency, especially in Europe, is getting a bit of tailwind from mandates in Europe to move companies toward electronic invoicing.
There’s still significant room for improvement in the interactions between buyers and suppliers, particularly in giving suppliers a bit more leverage in getting paid according to their payment preferences, said Pinado.
“We’re in the early days,” of that shift, he said, “and receivers would generally like to get paid quickly, with quality remittances that they can post at no cost.”
Although there are still challenges with ACH and direct debit, payments are becoming more efficient and cost-effective.
To truly get there will require business model innovation on top of payments innovation — where technology fuels the ability to capture data that goes along with the payments in efficient ways (with the reduction of manual tasks too), he said.
In the announcement detailing the transaction, the firms said iController has more than 560 customers, while at the same time boosting Billtrust’s European presence.
iController’s offerings run the gamut from payment reminders all the way through to factoring (done in collaboration between iController and KBC, a Belgium bank), and the company has said that its offerings are used in 35 countries.
Pinado detailed that Billtrust will make iController part of its platform, with an eye on enabling both firms’ customers to get deeper integration around data use and insights.
The deal, he said, fits with Billtrust’s general growth strategy — where acquired companies are experiencing organic growth, too, and the products and services allow for platform and geographic expansion.
The iController deal, he said, “checked a lot of boxes.” He noted that Billtrust and iController already share some customer overlap; taking iController into its fold increases Billtrust’s collections footprint in Europe and the U.K. — across several time zones — right out of the gate.
“We’ve got offices now in Ghent, Amsterdam and Belgium, which [is] useful in helping us not have to do any third shifts ‘stateside’” in the United States, he said.
The linkup between Billtrust and iController, he said, fits into broader AR automation in the bid to “apply cash correctly, whether it’s billing quickly and efficiently, whether it’s gathering remittance quickly and efficiently turning ‘almost’ cash — things that you have sold successfully, customers you have acquired — into actual recognized revenue.”