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Intelligent Long-Tail Automation Shreds Existing A/R Performance

Topics: Finance

Intelligent Long-Tail Automation Shreds Existing A/R Performance

Digital transformation. Two words that represent tremendous power and tremendous expectation for CFOs the world over, especially with credit and A/R processes. The key is understanding that digital A/R transformation in 2022 is not about automating everything, but about intelligently automating the right processes, workgroups, and even customers across the enterprise. The key is focusing on areas where the use of technology drives the highest returns.

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The ideal processes to automate are high volume in nature with repetitive and routine tasks, making long-tail customers a prime opportunity for intelligent automation. In a typical organization, 20% of the revenue comes from 80% of the customers. These are the long-tail customers. They contribute a lower level of revenue per account but in total represent a significant portion of total order volume. Here is the long-tail customer problem in a nutshell: Smaller invoices return less on a per-customer basis. In a typical organization, 80% of credit and A/R staff time and resources are spent on long-tail customers. Changing that ratio would be a significant business advance. Apruve is helping global enterprises drive that transformation with intelligent long-tail credit and A/R automation.

DSO Pared Down to One Day

Apruve makes it easy for CFOs and A/R leaders to quickly grasp the impact of long-tail digital transformation on their world: With Apruve, DSO is one day because all invoices are automatically paid out through Apruve’s global network of banks. That’s a standard result, not a soft goal.

Apruve solves the long-tail customer pain point by digitally transforming the way global enterprises manage credit, invoicing, payments and collections. Apruve integrates a leading-edge platform with a global credit network to help companies create a more profitable relationship with their long-tail customers. 

However, part of the challenge with digital transformation is being able to help internal stakeholders make the connection between new technologies and processes to organization metrics. With Apruve, the digital transformation story is told through impact on improved operational efficiency and profit margins: 

Reducing fixed costs and effort. Like ATMs transformed the banking industry by automating small, frequent banking transactions, Apruve transforms credit and A/R processes by automating high-volume, lower-value invoice processing. Long-tail customers experience streamlined digital service with quick credit approvals and a portal to view invoices, set up purchasing teams, and select from multiple payment options. Your credit and A/R staff no longer need to handle the back-office basics. Apruve intelligent automation drives a proven 30% to 50% reduction in time and expense across credit and A/R processes.

Increasing ROI on long-tail customers. Use of intelligent long-tail automation increases ROI with this customer segment simply by reducing the cost and effort to serve them. However, as one Fortune 500 manufacturer has shown, Apruve’s streamlined buyer experience can also drive increased ROI. 

Long-Tail GraphContract manufacturers purchasing this company’s electric components prefer Apruve over credit card procurement. Since partnering with Apruve, the Fortune 500 manufacturer has seen the average order size increase by a factor of 5.6 compared to credit card orders. Average year-over-year growth in invoice volume has increased 800% – without the need to add back-office staff.

Intelligent long-tail automation can be transformative in other ways. Use of Apruve supports a business strategy to sell directly to more end customers instead of through traditional distribution channels. Companies can transition to this revenue stream without increasing their A/R team. Apruve will prequalify an entire cohort of long-tail buyers and convert them to the buyer portal, removing a high volume of credit decisions as a potential obstacle to transformation. 

Increasing revenue predictability. Cash flow isn’t always the problem. Sometimes it’s the peace of mind that comes with the simplicity of having all long-tail invoices paid in one day. Intelligent long-tail automation eliminates collections and reduces the risk of bad payments. The streamlined buyer experience can increase predictability through more frequent and larger orders. Apruve also creates more visibility into the long-tail customer segment.  

Better service to top-tier customers. With long-tail customers handled well by Apruve, credit and A/R teams can concentrate on higher value-driving activities. Often, the first priority is white-glove service to top-tier customers – the 20% who generate 80% of the revenue. Stronger A/R service in the form of faster issue resolution and proactive issue prevention can drive better large-customer retention and differentiate your organization in the market. 

The white-glove impact ripples to sales and customer success teams, who are freed to focus more time and effort on building relationships and delivering higher-value products and services. Directly and indirectly, the use of intelligent long-tail automation leads to better service for all customers.

Digital transformation isn’t a catchphrase at Apruve. Our earliest adopters have demonstrated the repeatable business results that can be achieved by deploying intelligent procure-to-pay long-tail automation. It’s changed the way they view the costs of their long-tail customer segment. They’ve also started thinking about new strategies for improving service to top-tier customers. That’s the sometimes-hidden value of transformative technology – it can set the stage for innovation. 

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Apruve enables large enterprises to automate long-tail credit and A/R so you can stop spending 80% of your time and resources on 20% of your revenue. We partner with each of our customers to solve their unique credit, payment, and accounts receivable challenges and build the right credit solutions for your markets, customers, and goals. 

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