Build vs Buy: What to Consider When Choosing an Accounts Receivable Automation Software

Once your finance team is onboard with automating your accounts receivables to streamline and optimize the process, you’ll need to decide whether you want to shop for an outside vendor or build your own accounts receivable automation software in-house. The answer depends on a variety of factors, including your company’s size and available resources, the length of your timeline and need for customization. And your IT team will likely have a strong opinion about this as well.

Here is our build vs buy analysis and the main benefits and drawbacks you should consider ahead of time for each option.

The Pros: Building Your Own Accounts Receivable Automation Software

If you’re an enterprise-level organization with significant time and resources, building your own solution in house offers a number of advantages.

These include:

• Customization. An in-house solution can be tailored to meet your specific business requirements. This can be ideal for enterprise-level organizations that may be able to commit to strategic alignment of the software with their business goals at all levels of your organization.
• Seamless integration with existing systems. Since the solution is built in-house, it can be easily integrated with the financial systems your business uses, such as CRMs, accounting software, ERPs, and other financial systems.
• Control of the development lifecycle.  Your business has full control over the development process and future modifications, so you don’t have to deal with unwanted changes to the software or wait for updates from your vendor.

The Cons: Building Your Own Accounts Receivable Automation Software

Along with these accounts receivables automation benefits, however, are many  drawbacks to consider.

These include:

• Lack of in-house expertise. When you build a system in house, you don’t have easy access to advice and experience from experts who have built these types of solutions in the past. That can be particularly challenging when a business is managing a complex project that demands customization and alignment between teams.
• It can be costly. Building an accounts receivable automation software in-house demands both high initial development costs, ranging from $500,000 to $2,000,000 for a mid-sized company and ongoing maintenance costs, which can range annually from $250,000 to $500,000 or more. These costs can be even bigger for a larger company.  It can also be difficult to accurately predict these costs ahead of time, making budgeting for the project challenging.
• The development timeline can be lengthy. It can take anywhere from 8-12 months to launch a working beta version. That doesn’t include the time needed for testing, debugging and any new versions that might be necessary for the future. This is assuming there aren’t major delays or problems. A longer development timeline means it’s going to take longer to deploy a solution that has probably been needed for a while, which might not be the best situation if your business has prioritized scaling and optimizing its accounts receivables as soon as possible.
• It can misallocate your resources. In-house solutions often require significant internal resources required for project management, development, and maintenance. For mid-sized companies, these resources might be better spent on developing your core product or service and growing your business.

5 Top Considerations When Buying Accounts Receivable Automation Software

If you’re a mid-sized business with limited resources looking to quickly scale and optimize your accounts receivable process, you’ll want to look for a solution that you can have up and running as soon as possible. You’ll also need to look for specific capabilities so that you can continue using your accounts receivable automation software for the long haul.

These include:

• A proven solution. When buying a solution, you are essentially outsourcing the product development, maintenance and updates to experts with first-hand experience building this type of solution, ideally for businesses of your size and industry. Ask your vendor if it has a track record of successful implementations of businesses of various sizes across different industries.
• Scalability. A vendor solution that was built ahead of time to accommodate a wide range of industries and business transactions should be easily scalable to accommodate your growing business needs.
• A shorter implementation time. Since you’re relying on subject matter experts for a proven solution, you’ll get to deployment faster. Advanced accounts receivables solutions such as Gaviti, for example, can be deployed within weeks, ensuring rapid adoption and immediate impact on accounts receivable processes.
• Ongoing support and updates. You should ask your vendor about their process for developing new features and their current timeline for updates. For instance, do they ask for feedback from customers and bring any suggestions to the attention of their support team? This can help you evaluate whether or not you’ll have continuous access to new features, updates, and dedicated support.
• Low upfront costs. One of the main benefits of vendor solutions is the smaller commitment to costs and ability to budget and use the resources for investment opportunities. Solutions that offer a subscription model may even charge based on company size and specific needs, enabling businesses to budget even more effectively.

How Gaviti Helps You Streamline Your Accounts Receivable

With Gaviti’s A/R management and automation platform, you’ll get a cost-effective, scalable, and quickly deployable solution with ongoing support and updates. At the same time, you’ll be able to streamline and optimize your entire accounts receivable process.

Its modules include:

• Cash application. Associate each payment with its corresponding invoice for precise application and reconciliation of payments with remittance information such as invoice numbers or payment references. When customers use the Self-Service Payer Portal, Gaviti can match payments to open invoices with near 100% accuracy.
• Self-Service Payer Portal. Offer customers a variety of payment methods directly through the online payment portal, including credit and debit cards, ACH, electronic payments, and more. Customers can also use it to view past invoices and payment history and make credit requests from one centralized place.
• Credit monitoring and management. Automatically manage customer credit from the credit application process through ongoing monitoring with real-time credit risk alerts. Tailor the risk assessment process of each customer according to the requirements that align with your business needs.
• Collections Analytics. Track collections performance of both individual team members and your A/R team as a whole using KPIs such as Total A/R, DSO, collections rate, customer risk, etc. In addition, you’ll be able to correlate payment history with customer risk to generate AI-driven insights that accurately forecast future payments.
• Disputes and deductions. Track, code, route and resolve customer disputes and deductions quickly by identifying any recurring issues and taking a proactive approach to future issues.

Want to learn more about how you can use Gaviti’s A/R management and automation to streamline and optimize your accounts receivables? Speak to a specialist today.

See why Gaviti is ranked as the #1 Credit & Collections Software on G2: