Automation increases collections in advertising agencies

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Advertising companies have taken the lead in automating their B2B payment processes. As organizations across many industries started using digital B2B payments in 2020, or switched to it during the pandemic, advertising companies have gotten a head start.

They made this decision early because they needed the benefits of automation. The media and advertising industry is a complex network of entities and workflows, all navigating a variety of systems (digital and manual) to reconcile invoices that can span multiple campaigns, months, and buying customers.

“It’s enough to make your head spin,” Omar Hawkins, director of B2B vertical strategy at American Express, told PYMNTS. “With that in mind, [accounts receivable (AR)] Automation solutions can deliver material process efficiency and better data visibility to AR, finance, treasury, and collection professionals in media and advertising businesses to alleviate complexity and reduce complexity. ” improve free cash flow.

In fact, 71% of advertising companies said their collections had improved after implementing AR automation, according to the B2B Advertising Payments report produced by PYMNTS in conjunction with American Express.

A variety of benefits for common AR challenges

Despite the benefits of automation, about a third of U.S. business spending still relies on outdated physical payment systems and methods, which can create friction and slow payment processes.

The pandemic appears to have served as a wake-up call for businesses in this regard, as businesses around the world invest more to digitize, automate and streamline these payments.

“Automation solutions provide a variety of benefits for common accounts receivable challenges, for example, reducing days in receivable for longer than desired, improving operational efficiency, eliminating compliance risks. secure payment card data; and create a more customer-friendly payment experience, ”said Hawkins.

Prepare for a surge in activity

Advertising companies that have not embraced these solutions may not be the best prepared for the surge in activity that has been observed and is expected to continue in their industry.

Spending in the B2B category of online advertising has grown significantly, growing twice as fast as the money spent on print advertising each quarter.

This boost likely reflects the decline in face-to-face events for B2B marketers during the pandemic, but it is positive news for advertising platforms. Some are predicting that B2B marketing may never return to what it was before the pandemic began, so these expenses will likely continue on their upward trajectory.

Streamlining of AP and AR processes

Advertising companies can streamline payments for advertisements on websites by using virtual cards. Several agencies currently use credit cards to cover advertising campaign expenses, but virtual cards give marketing departments a better idea of ​​client budgets as well as a higher level of personalization. Customers will set a specific budget for each card, loading the allocated amount onto the appropriate card each month. When the value of the card reaches zero, ad spending will cease until funds are reloaded the following month.

On the AR side, the answer is automation. Advertising agencies with automated AR processes have lower default rates and lower days of unpaid balances (DSOs) than businesses that rely on traditional paper-based methods. PYMNTS research shows that 87% of these companies see these improvements as significant benefits, and more will follow as the digital innovation of the B2B payments space continues.

“We encourage professionals in the advertising industry to leverage the capabilities of AR automation solutions to invoice faster, get paid earlier, free up resources and improve [the] customer experience, ”said Hawkins.

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