How to Select an AR Payment Provider for Long-Term Success

When it comes to any small business' success, selecting an accounts receivable (AR) payment provider is critical. From providing flexible payment options and streamlining the accounts receivable process, to increasing cash flow and driving customer loyalty, the right AR payment solution can be a powerful ally for small to midsize businesses (SMBs). But how does an SMB choose the best provider?

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In this article, we'll explore the criteria for selecting an effective AR system, the key features in the SMB payment collection process, and show the competitive advantage that an integrated AR solution (with embedded payments) has over a standalone merchant services provider. With this information, you can make an educated decision on which AR payment provider can best meet your business needs.

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Define Accounts Receivable (AR) Payment Needs

It is crucial to assess AR payment options and make the right selection upfront to ensure you partner with a company that can stand next to you as you grow. For most SMBs, the AR Payment Provider needs to offer:

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Scalability: As a long-term strategic partner, a payment provider should be able to stand next to a business and support its growth trajectory for years to come. It is not feasible, cost-effective or a good customer experience to frequently change payment providers and processes. Scalability in payment providers offers a simple, sustainable solution for businesses looking to achieve unprecedented growth while keeping customer satisfaction and retention top-of-mind.
Integration: Integrating AR payment solutions can help businesses to holistically view and understand their AR and collections process and its impact on cash flow, while driving greater efficiency and identifying areas for improvement. By having this visibility, businesses can take a proactive approach to collections management, optimize their AR processes, and minimize the risk of bad debt.
Breadth of solutions: An effective AR payment process requires the right software solutions to automate and streamline payment options, remind customers, and receive/apply payments. With the right breadth of solutions, businesses can optimize their payment processes, automate manual tasks, reduce costs and avoid errors.
Your customers’ experience: Your payment experience is more than just a transactional process; it is an integral part of the customers' buying journey. Offering a seamless and hassle-free payment experience can help to enhance overall customer satisfaction, improve retention, and drive repeat business. Customers are looking for a frictionless payment process that is secure, user-friendly, and fits their preferred payment method.
Future proofing: As your business evolves, your AR payment solutions provider should offer a roadmap of initiatives to continually improve and enhance your payment processes. By future-proofing your payments, you can rest assured that your payment solutions will keep up with the changing landscape of customer payment preferences and optimize your financial operations.
Customer service and support: At the end of the day, payments are a critical component of your business operations, and having the right support is paramount. A payment solutions provider that offers personalized and responsive support can help to ensure that your business stays operational and customer satisfaction remains high.

Key Features in the Payment Collection Process

When assessing an AR payment provider, it is also essential to consider the needs specific to each step of the payment collection process. Let’s take a look at the most critical parts of the payment collection process and what CFOs and Controllers should be keeping in mind:

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Communicate invoice and payment information

Most standalone merchant services providers offer invoice issuance only, while integrated AR solutions like Centime provide both invoice issuance AND every subsequent payment reminder on configurable cadences by the customer segments you define.

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Automate and customize invoice reminders

Most standalone providers do not offer invoice reminders at all, while integrated AR platforms not only send out reminders, but allow you to customize the reminders for your customers in a personalized way that suits your business and customer relationships.

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Monthly statements

Standalone providers do not send out monthly statements on open invoices, but integrated solutions automate this process and also allow for sending statements on an ad-hoc basis.

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Multiple payment options (Card, ACH)

Both standalone and integrated AR solutions typically offer multiple convenient payment options for customers to facilitate a frictionles payment experience.

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Store payment details

Most standalone providers do not allow saving of payment information, whereas integrated solutions do which results in faster payment processing.

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Automated payments

Most standalone providers do not allow automated payments while many all-in-one solutions have this feature which ensures timely payments when customers choose to utilize them.

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Controls around credit cards

Both standalone and all-in-one AR solutions allow for setting and passing of surcharges on to customers, but only fully integrated AR payment solutions also offer the ability to control under which circumstances to even offer credit cards as a payment option (e.g. specific customers, invoices under a certain threshold, invoices paid before the due date, etc)

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Early pay discounts

Standalone providers don’t take early pay discounts into consideration but an all-in-one solution not only offers early pay discounts in accordance with the payment terms, but can reconcile the reduced amount correctly back to the accounting system.

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Cash application to General Ledger

The majority of standalone providers do not integrate with an accounting system, while all-in-one AR providers allow for automated posting and native, bi-directional GL integrations saving you from the hassle of cash application.

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Gross and individual payouts

Solutions like CentimePay pay out in gross (NOT net) and pay out every payment individually, which means that every payment applied in the GL will exactly match what hits the bank account and auto-reconcile. Standalone merchant services providers cannot offer this since there is no integration with an accounting system.

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Secure self-serve payment hub

While most standalone merchants cannot, integrated applications like Centime help customers see all open invoices, access and download original invoices, see paid invoices, store payment preferences, set promises to pay, apply credits, and more. A payment hub can often allow for direct communication between customers and suppliers resulting in faster dispute resolution, better communication, and a full audit trail.

Truly Integrated AR Solutions

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For most businesses, it makes sense to consider an all-in-one solution for AR payment collections for a more seamless overall cash management process. Having all of your cash flow features like AR, AP, cash forecasting, and credit features is cost-effective and efficient for finance managers and CFOs at most SMBs.

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Centime's cash flow management suite of applications helps small to mid-size businesses streamline their AR payment collection process without taking away from the big picture. With the introduction of Centime AR + CentimePay (coming soon) + Payment Hub (coming soon), SMBs can scale growth and improve their Collections Effectiveness Index.

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Talk to us to learn more about our integrated solution.

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**Deposit placement through ICS is subject to the terms, conditions, and disclosures in the applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through ICS satisfies any restrictions on its deposits. A list identifying IntraFi network banks appears at https://www.intrafi.com/network-banks. The depositor may exclude banks from eligibility to receive its funds. IntraFi and ICS are registered service marks, and IntraFi Cash Service is a service mark, of IntraFi Network LLC.

^††3.5% Annual Percentage Yield (APY) as of 11/19/24. Deposit rate may adjust to current market rate and may change daily. Fees may reduce earnings.

*Centime is not a bank and is not authorized by any federal or state agency to engage directly in core banking activities.
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*All banking products and services available through Centime are provided by FNBO and are governed by the applicable agreements and related disclosures provided to you by FNBO. Member FDIC.
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‍*While Centime facilitates traditional banking activities (such as the acceptance of deposits or extensions of credit), these services are actually provided by our banking partner, FNBO.
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*Centime may provide support services to FNBO, as permitted by applicable law, to facilitate the delivery of its bank products and services.

**Deposit placement through ICS is subject to the terms, conditions, and disclosures in the applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through ICS satisfies any restrictions on its deposits. A list identifying IntraFi network bank

How to Select an AR Payment Provider for Long-Term Success

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