Payost Vs Accounts Receivable Software (ARS)
Accounts receivable software has been compared to the ideal employee. One that never complains, never takes a sick day, never asks for a raise and always, always does exactly what you tell them to do. Those things by themselves make a compelling argument for a company to use this type of software. Accounts receivable software will also alert you when a customer is in danger of slipping into arrears, will let you enable online payments and simplify document management. But is this kind of software any good at helping storm restoration companies bring order to their cash flow? That’s what we’re about to find out. Let’s get started.
What is Accounts Receivable Software?
Accounts receivable software (ARS) takes different forms for different companies: depending on what type of company it is and what the owners are trying to accomplish by using the software. That said, there are a few central features you’ll find in almost all the different types of accounts receivable software.
How Does Accounts Receivable Software Work?
Accounts receivable software works by employing most or all of the following features as well as any others that may be germane to the operations of a specific company.
- Online bill payments - Any accounts receivable software worthy of the name will offer this feature. Storm restoration company owners sometimes think this will help them bring order to their cash flow roller coaster. But it doesn’t work that way. And we’ll get into that in a bit.
- Email automation - A lot of companies find this a handy feature. They just enter which customer should receive a reminder email at what time and the system does the rest. The system works from an email template and adds individual details as warranted.
- Invoice dispute management - If the utility or GC winds up dragging their feet on payment for some reason things can get ugly. The ARS can help you determine when is the right time to escalate collection efforts.
- Document management - No department generates as much paperwork as accounts receivable. One of the primary responsibilities of your ARS software is to reduce the amount of paperwork and bring order to the documents you have.
“Accounting is the language of business” - Warren Buffet
Types of Accounts Receivable Software
Essentially accounts receivable software falls into one of three categories. They are:
- General or Enterprise Resource Planning (ERP) - These are the most common forms of ARS. ERP software is created specifically for your organization. While “general” ARS is created by a totally independent third party and marketed to a wide audience. This type usually allows some customization. But nothing as targeted to your needs as ERP software would be. With ERP software integrating it into your business process should be an error free experience. But this type of software will often lack the power and flexibility of third party software. On the other hand general purpose software is likely to leave you dealing with more head scratching anomalies than software created specifically for your business.
- B2B Software - Storm restoration companies are B2B companies and so to many of them this type of software seems to make a lot of sense. Those struggling to avoid the peaks and valleys that come with emergency response work often seek help from this type of ARS software. The thinking being it will enable them to more effectively handle the lean times. And while it may be that B2B software will provide some small measure of relief, waiting to be paid is still waiting to be paid. And all the software in the world isn’t going to change that.
- Premises vs Hosted - It’s usually things like the size of an in-house IT staff and the company size that determine whether a business should have on-premises ARS or opt for something hosted. Bringing everything in-house can get very expensive so there really needs to be a compelling reason to do so. For most small to mid-sized storm restoration companies a hosted ARS solution is often the best choice.
Best Accounts Receivable Definition
The best definition of accounts receivable software is that it’s financial software that helps an organization deal more effectively with money owed to it.
Most Popular Accounts Receivable Products
Although the market it still dominated by a few key players some upstarts have made significant inroads in the past few years. As of this writing these are some of the top ARS programs.
- QuickBooks - QuickBooks is a product of Intuit which was founded in 1983. Intuit was the first company out of the gate with accounting software and developed a significant lead in the market before any real competition arose to challenge them. By the turn of the century they had developed both basic and pro versions of their QuickBooks software. And by 2005 QuickBooks could boast 74% of the accounts receivable software market in the US. Today they offer both on-premises and cloud based ARS solutions.
- SAP Business ByDesign - SAP Business ByDesign is strictly cloud based ERS software offered by SAP, a global leader in enterprise application software. ByDesign is intended to serve the needs of small to medium sized businesses. ByDesign exhibits SAP’s penchant for covering all the bases and is built on the principles inherent in SOA (service oriented architecture). It provides an array of business process solutions in areas including human resources, business analytics and of course, accounts receivable. ByDesign is currently thought to be in use in at least 144 countries. The software supports a dozen languages including Hebrew, Korean, Polish and Chinese.
- Sage Business Cloud Accounting - Sage is designed to address the specific needs of small to medium sized businesses. There are two versions currently available at different price points. For $10 per month you get the “Start” version. This is a fairly stripped down version similar in some respects to QuickBooks. For $25 per month you get the entire suite of features from Start plus an array of additional features that lean more toward the esoteric duties of ARS software. There’s a mobile app should you wish to take your accounting on the road. And customers can avail themselves of a free 30-day trial version if they wish.
- Invoiced - Invoiced markets itself as ARS that helps companies get paid faster. That notion will probably appeal to a large number of storm restoration companies. But the fact is neither Invoiced or any other accounts receivable software is going to make utilities pay outstanding invoices faster than they already do. That aside, Invoiced currently claims some 20,000 customers and tens of billions of dollars in receivables processed. Invoiced is highly regarded as being one of the easier ARS program solutions to learn and use.
- SlickPie - SlickPie may sport a questionable name but there’s nothing questionable about its popularity. It’s made significant strides in penetrating the market for cloud based solutions for small business. It employs a simple online dashboard that enables the user to record and track income and expenses. The documents the program emits can be used “as is” or users can apply a modest amount of customization. So that the invoices more accurately reflect their company’s branding. SlickPie also provides simple document management capabilities and can send payment reminders to problem customers.
- Accounting Xpert - Accounting Xpert aims to serve all types and sizes of businesses. It’s an on-premises accounting solution whose primary features are general ledger, payables, payroll, accounts receivable, tax forms and inventory management. It can also be configured to aid in PO management, SO management and data importing from other ARS programs like QuickBooks.
Common Benefits of Account Receivable Systems
While this type of software can often be of enormous help to companies with more or less regular income streams the benefits of ARS software for storm restoration businesses are very much open for debate. Below we’ll look at purported ARS benefits and why they may not apply to storm restoration companies.
Purported ARS Benefit: Improved Cash Flow
Reality: This is a major concern for storm restoration companies. Since they often wind up burning through their working capital while responding to weather-related emergencies cash flow becomes a major hurdle to longevity. This situation is only exacerbated because utilities can take 90 to 120 days to pay out on an invoice. ARS programs promise to help you regulate and normalize cash flow but they can’t do much because of the nature of the storm restoration business. To truly improve cash flow you need state of the art invoice financing like that provided by Payost.
Purported ARS Benefit: Greater Control Over Working Capital
Reality: The ability to gain control over working capital outflow can often seem like the impossible dream for storm restoration companies like yours. As you know you can burn through great gobs of cash when responding to distant weather events and can return home to face empty coffers and a 3 or 4 month wait to be paid. While it would be nice if ARS could do something about this, the fact is any help it could lend would be minimal at best. What you need is Payost. We can turn your outstanding invoices into working capital today. Without purchasing your invoices or saddling you with punitive fees.
Purported ARS Benefit: Reduced Administrative Costs
Reality: If your storm restoration business is being held hostage by a dearth of working capital and an endless wait for payment reducing administrative costs is the least of your worries. There is likely little or no administrative work going on because you’re in limbo. You need the kind of practical, real world invoice financing solution Payost provides. If you have outstanding invoices with a utility we can provide you with the working capital you need to conduct equipment maintenance, meet payroll and quiet those subcontractors that have been hounding you. Once Payost helps restore some type of order to your cash flow maybe an ARS program can help you save a few bucks on administrative costs.
Purported ARS Benefit: Shorten the Work-to-Payment Cycle
Reality: Not going to happen. Your ARS program can send all the automatic email reminders it wants. The utility is not going to change its payment policy. In fact, sending too many urgent requests for payment to the utility will probably wind up getting you blacklisted and sidelined during the next emergency. There are only a few ways for storm restoration companies to shorten the work-to-payment cycle:
- Invoice factoring - Wherein you sell your outstanding invoices to the factoring company. They then pay off around 85% of the invoice and become the payee of record. We’ll get into why that’s a problem in a moment.
- Bank loans - Wherein you go to the bank and ask them for a bridge loan to tide you over. They of course work at a snail’s pace and will demand collateral.
- Payost invoice financing - At Payost we pay off your outstanding invoices in just a couple of days from the time you get the ball rolling. When the utility finally pays off the invoice you reimburse us plus a modest fee for our service.
What’s the Difference?
- Factoring Companies - With invoice factoring the factoring company takes ownership of the invoice. You then need to inform the utility of the change. This may not seem on the face of it like a big deal. But chances are the utility now believes you are having financial difficulties and may deem you unreliable. Factoring companies also typically take a significantly bigger bite of your invoice than Payost.
- Banks - Banks will conduct a credit check and require you to jump through numerous hoops in order to get a bridge loan. You’ll need to put up some of your equipment as collateral, your credit rating could take a hit and they are going to take their own sweet time processing your application.
- Payost - Payost believes storm restoration companies like yours deserve a break. We base our model on the creditworthiness of the utility. Not you. We also don’t purchase your invoice but instead simply pay it off once it is verified. As such the utility never finds out you came to us for assistance. Payost is also fast, with the application process taking just a few minutes and approval not much longer. Once approved you’re provided access to an online dashboard where you can upload your qualifying invoices. Payment often happens within 24 hours.
Market Trends to Look Out For
- Blockchain technology - Many people are familiar with blockchain technology via Bitcoin and other cryptocurrencies. But the blockchain is not just for creating money from nothing. In the coming year look for accountants and finance managers to utilize the blockchain to help reduce fraud, automate workflows and even streamline invoicing via smart receipts.
- Edge computing will challenge the cloud - The “edge” in edge computing simply refers to the fact that the server hosting the accounting software is physically closer to you than a cloud server would be. Significantly closer. And why would that matter? Because having the server close at hand reduces the volume of data sent over a wide area network. This reduces WAN bandwidth costs and increases efficiency.
- Say hello to AI - Without sounding too alarmist machine learning is going to make a lot of jobs obsolete in the near future. The benefits of machine learning for ARS include faster auditing, simplified payment processing and reduced financial risks.
“with artificial intelligence we’re summoning the demon.” - Elon Musk
Accounts receivable software has proved a windfall for many companies both great and small. But it can’t force utilities to pay off invoices faster than they currently do. It can’t help smooth out cash flow problems when there is no cash flow. And it can’t improve your working capital situation when you exhausted it all responding to a natural disaster a thousand miles afield. For solutions to all those problems you need Payost. We provide the money you need based solely on who is holding your invoices. Applying is fast. Approval nearly as fast and payment often happens within 24 hours of uploading your verified invoices. So don’t wait. Head over to the Payost “Apply Now” page and get on the track toward sustainability.