Intelligent automation is making it possible to leverage the Pareto Principle in new ways to accelerate business growth. This principle is also known as the 80/20 rule, and it describes something common to most businesses:
20% of customers generate 80% of revenue
80% of customers generate 20% of revenue
When companies use intelligent automation to manage credit and A/R processes for their larger segment of customers (also referred to as ‘long-tail’), they reduce costs, create better customer experiences, and increase revenue and growth for all. To see how the Pareto Principle is used in the travel, manufacturing and grocery retail industries, read our previous blog here.
The Sweet Spot for Credit and A/R Automation
The long-tail customer segment is perfectly suited for automation because it generates repetitive, routine orders that occur with high frequency. This is where intelligent automation can deliver the highest ROI. Companies that continue to process invoices with equal amounts of time and effort across customer segments are leaving money on the table.
Automate A/R and Credit with Apruve
Apruve automates the pay-to-procure process, enabling large enterprises to significantly reduce the time and resources needed to manage their smaller, long-tail accounts. By putting long-tail accounts on autopilot with Apruve, businesses can reduce the fixed costs of managing A/R processes in-house by 30% to 50%.
Apruve’s intelligent platform creates other valuable business benefits as well:
DSO of 1 day for all invoices. On average, 24% of the monthly revenue in U.S. companies is held up in AR or credit. With Apruve, Days Sales Outstanding (DSO) is reduced to one day, which contributes to better cash flow and business performance.
Streamlined buyer experience. Apruve’s fast credit approvals and selection in payment options mean long-tail customers have a streamlined buyer experience. They can manage and pay invoices through an online portal. This seamless digital experience helps companies differentiate themselves in the marketplace and improves their long-tail customer retention.
Enhanced A/R team value. With about 80% of customers managed by Apruve, A/R teams are freed to perform higher-value work. They can concentrate on elevated service to top-tier customers that generate the most revenue. This may include faster issue resolution and proactive issue prevention. Higher-value work is often more engaging and satisfying for A/R employees, which can lead to higher A/R staff retention, too.
Increase ROI on Long-Tail Customers
With intelligent automation and an elevated buyer experience, the long-tail customer segment becomes more profitable. One major U.S. company has seen its long-tail invoice volume increase 800% year over year and orders grow 5.6 times in size with Apruve. Read the case study here.
Apruve transforms long-tail customer credit and A/R like never before. Our intelligent platform drives results such as one-day DSO and increased long-tail profitability that aren't possible without advanced technology. With Apruve, businesses gain a measurable advantage in the market.
If you’d like expert insight into the time and expense required in managing your long-tail customers in-house, get in touch with us today. We can help you identify opportunities to reduce cost and improve operational efficiency with intelligent credit and A/R automation.