Solving AR For Suppliers With Buyers’ Needs In Mind

As an accounts payable solutions provider, commercial payments firm AOC Solutions knows well the challenges and needs of corporate buyers and procurers. So when the company decided to launch an accounts receivables function for suppliers, AOC did so from a unique perspective in the procure-to-pay market.

The AR-Exchange platform was released earlier this month through a collaboration with payment and data firm 3Delta Systems, and AOC Solutions discussed with PYMNTS why the solution, though tailored to suppliers, is all about getting suppliers and their buyers on the same page. Key to that, said EVP of Global and Strategic Initiatives Kevin Woods and Chief Product Officer Todd King, is data.

As an online app, AR-Exchange allows suppliers to manage remittances and handle invoices, regardless of how a supplier pays – ACH, wire transfer, or commercial cards.

According to King, AR-Exchange is the result of years of work to streamline the accounts payable process for buyers and deciding to place some attention on the supplier side of those transactions.

“What we’re trying to do is not only add value to the supplier, but give them what they need to identify the problems they’re having and try to solve them,” he said. “That could be the need for innovate ways to manage invoices, remittances and the payment data around those transactions.”

Both King and Woods emphasized the role of data in helping suppliers manage their AR operations. AOC Solutions’ new tool automatically integrates data from invoices and attached documents into an AR platform, meaning suppliers can access information that was previously unattainable. Woods said that part of this need for more robust data capture and analysis is due to changing payment patterns among corporations.

AOC Solutions is positioned for a bird’s eye view of those patterns, too. AR-Exchange will first be available for suppliers that get paid through the company’s AP portal, EnCompass, meaning AOC Solutions will have a hand in both sides of the transaction.

Woods said that some of the buying organizations AOC Solutions works with have 90-day payment terms, and some have even longer than that. And today, he added, buying organizations are developing their payment terms around payment technologies; for example, a company will offer to pay in 30 days if a supplier accepts card payment; if they only accept different forms of payment, payment terms may increase.

[bctt tweet=”Buying organizations are developing their payment terms around payment technologies”]

King noted that these payment rules can lead to challenges for suppliers, but payment data – that is, the information that states how a payment was made and why it was made that way – can be key to streamlining AR. This type of information is especially useful when suppliers are working with a multitude of buyers.

“We were looking to not only give suppliers a better view of their data, but to consolidate where suppliers go,” said Woods. “Suppliers don’t want to have to go to 50 different websites to get payment from 50 different companies.”

For many suppliers used to having to accept payment terms and rules from their corporate buyers, this access to data to help them manage their operations can be a new experience.

“In many cases suppliers are used to getting what they get, and they adapt to it,” Woods said about suppliers’ access to payment data. “They may want more data, but they don’t always get more.” The type of information hands suppliers the power to streamline the rest of their operations, whether that be budgeting or managing payroll, for example, Woods said.

[bctt tweet=”Suppliers may want more data, but they don’t always get more”]

AR-Exchange provides several levels of data reports for suppliers, from basic invoice data fields to deeper types of information. Because suppliers may not have had access to this information before, Woods explained that it gives these businesses options in terms of what they want to do with it.

It’s a solution, King said, that’s about facilitating payment in the way that works best for both sides of the transaction. From working on solutions for the payer side for so many years, King said, “one size doesn’t fit all.” The same goes for data – large and small suppliers will need information for different functions, meaning they’ll need an AR tool that scales and flexes as a company grows.

Both Woods and King said that AR-Exchange and the data it provides to suppliers isn’t just about ensuring these businesses can manage their cash flow; it’s also about easing friction between buyer and supplier, and strengthening business partnerships. As the company moves forward, the executives said they will be keeping an eye on how to support the global expansion of their buyer and supplier clients. Naturally, the power of data will be crucial to taking AOC Solutions’ tools to their next levels for both sides of a B2B equation.

“Everything we build, we try to tie together with buyer-side technology and supplier-side technology,” said Woods.

“We’re in somewhat of a unique situation, because we’ve got buy-centric solutions and supplier-centric solutions,” added King. “We’re one, single product entity, and we can solve problems and have a complete view from both sides.”