To increase cash flow, consider a bill pay portal for your business
By Shelli Hawkinson, Old National Bank Treasury Management Receivables Product Lead
As your business grows and you complete more transactions, there’s a key metric worth keeping a close eye on: the time it takes to collect payments from sales.
This metric, also known as Days Sales Outstanding (DSO), is a key part of any company’s cash flow. While every business has a slightly different sales cycle, all operations have a common goal of converting sales into cash as quickly as possible, which means a lower DSO. Across industries, the average DSO is around 35 days.1 As DSOs get higher, businesses may experience more cash flow problems, which can become serious if left unchecked.
If your organization’s DSO is significantly above this average, or if you notice your DSO steadily increasing over time, it may be time to look for improvements in your payment process. Investing in a robust bill pay portal for your customers to use is a great place to start.
Bill pay portal: a secure front door for your customers
A bill pay portal allows you to deliver bills or invoices and accept payments through a variety of digital channels, replacing the need for customers to pay by paper check. These digital payments are more secure, as checks can get lost or stolen in the mail. With mail theft on the rise, digital payments are an increasingly valuable tool to help your customers avoid check fraud and ensure your business gets paid on time.
Portals are often customizable as well, meaning organizations can integrate them seamlessly into their websites and offer the specific tools their customers need. This can boost the customer experience, which can in turn increase brand loyalty and lead to more sales down the road.
Increased efficiency for your business
Offering secure, digital payments through a payment portal is a great way to lower your company’s DSO and improve cash flow. A more efficient payment process can also boost productivity by freeing up staff to focus on other projects.
For example, for every 100 checks received each month, it may take 45 minutes to an hour to open envelopes, scan checks, upload files, and enter or match transactions in your accounting system. This labor quickly adds up and takes time away from other, more value-added work.
On top of these efficiency gains, shifting from paper checks to digital payments is more environmentally friendly, which can support your organization's sustainability goals. Bill pay portals also typically feature a host of reporting features that provide visibility into your company’s day-to-day operations.
These benefits all make bill pay portals valuable for growing businesses in different industries. Your financial partner can walk you through portal options and help you implement the right solution. For more information contact a Treasury Management Consultant at Old National Bank today.
