Why you should leave your accounts receivable to an expert

As e-commerce companies grow, some accounting complexity inevitably arises. The six biggest challenges can be solved by outsourcing accounts receivable management and accounting.

The online store is growing and with it the complexity of accounts receivable management. All payment transactions must be monitored – from the purchase in the web store to the receipt of money in the company account. In addition, there is the management of value and merchandise vouchers, the control of cancellations and credit notes, and the preparation and dispatch of reminder letters.

The administrative burden for the online retailer increases

The increasingly popular subscription models also need to be accounted for cleanly. To maximize customer convenience in the buying process, many retailers also offer multiple payment options. To do this, they work with various payment service providers (PSPs). The administrative effort for the online retailer increases enormously. And this does not make cooperation with the tax advisor any easier.

If you want to do everything yourself, you will quickly reach your limits. This is where business process outsourcing comes into play – external service providers take over parts of the business process and thus relieve the company. Which can now better focus on its core business. As a specialist for mass billing, nexnet GmbH supports its customers primarily in the areas of accounts receivable management for e-commerce and subscription billing and monitoring of payment service providers, so-called payment clearing – independent of the industry and at the individual transaction level. For the retailer, this results in six key advantages over self-management:

6 challenges – one solution

1. manage multiple payment service providers simultaneously

With each additional payment partner that disburses money to the store operator and provides settlement files, the complexity of financial management increases. If one works with several PSPs, it becomes increasingly difficult to say exactly whether individual payments have already been made by the buyer. Or even transferred from the PSP to the dealer. Instead of reconciling the data with elaborate homegrown solutions, it is more economical to outsource the process. With the automatic allocation of payments per shopping cart, the retailer knows immediately whether the money is still with the customer, with the PSP or already in the company’s bank account.

Transaction fees are recorded net of input taxes. And they are reconciled with the amounts paid out. What is significant here for the merchant is that payments and orders from the customer and PSP are not combined, but are posted at the individual transaction level. Since the summaries bring problems for accounting and tax advisor.

2. payments always in view

If a merchant loses track of its outstanding receivables or fails to respond in a timely manner, it poses a problem. This is a challenge, especially for young or small companies. The company’s own liquidity is put at risk.

Monitoring the payment behavior of customers and payment service providers ensures the accuracy of all figures for all individual and bulk transactions. In this way, the company remains liquid.

For receivables management, nexnet offers individual solutions that are tailored to the needs of the company. In addition to the commercial dunning process, nexnet takes care of the preparation and dispatch of dunning letters, the management of dunning charges and the monitoring of payment behavior. In the further course of the dunning procedure, automated submission of receivables to a preferred collection partner is also possible.

3. management of subscriptions and recurring payments

Just a few years ago, the subscription services on offer were limited to print media such as books, newspapers and magazines. Later, the music industry followed. As digitization grew, the subscription model exploded.

Driven by customers’ desire for greater convenience, there are now countless products available by subscription. Start-ups in particular are increasingly targeting long-term customer loyalty through a subscription model. Customer acquisition costs can be reduced and revenues better predicted. Even companies that are established on the market have to deal with the issue of the subscription model.

The way subscriptions work has changed. Today, they are much more flexible and customer-oriented. The focus moves away from the product and towards the customer.

At first glance, introducing a subscription model seems simple: develop a monthly price for usage. Repackage the product or service. And get a software tool that bills customers and processes payments on a regular basis.

However, the reality is different even for companies with low complexity. After all, companies that are successful with subscription models know the impact that switching to a subscription model can have on the entire business and financial infrastructure. However, many companies underestimate this influence.

4. clean monthly closings with less effort

Communication with the tax advisor is probably a point that could be simplified for most companies. The PSP business in particular can cause problems here. Here, outsourcing can also solve a major challenge. By recording all business transactions for accounting purposes, the company thus conveniently obtains a certifiable monthly financial statement.

5. no problems with international transactions

Internationalization combined with various currencies and tax rates can cause quite a bellyache for the accounting department. For companies with an international focus, nexnet processes and posts all money movements in all currencies with daily updated conversion rates. Sales and sales tax are, of course, recognized using international tax rates. For companies with international headquarters, nexnet can map the accounting according to local GAAP.

6. maximum security – with constantly changing legal situation

The monitoring of legal regulations and changes is very time-consuming. Especially since changes often occur here that affect accounts receivable management and accounting. Therefore, an analysis and evaluation by expensive specialists such as lawyers or auditors is often necessary. When outsourcing this area, part of the responsibility can be handed over to the service provider.

Payment clearing cloud

for small and medium enterprises

Not only global players are bound by international standards in their accounting. Start-ups and smaller companies must also comply with all guidelines. But it is often financially impossible for them to consult external specialists. The payment clearing cloud from nexnet GmbH can be the solution here. This is because there are hardly any start-up and operating costs with cloud computing. In addition, the young entrepreneurs can fully focus on growth. While the service provider automatically handles the complex accounting processes in the background.

Due to its cloud approach, the payment clearing cloud offers the advantage of transparent as well as low entry and operating costs. Companies can focus on their business. And leave the complex accounting processes to the service provider. Which handles this automatically in the background. For as little as 99 euros per month, online retailers can monitor their payment service providers and have a monthly statement prepared that can be audited.

All those bills you generate with your digital business model robbing you of sleep? Then you are best advised with a business process outsourcing.