You don’t need a DeLorean to see the future. You just need YayPay.
We’ve reached the final instalment of our 4-part blog series. The series has focused on YayPay’s differentiators — four fabulous features that set us apart from the other accounts receivable solutions out there. We’ve explored our intuitive user experience, outlined our flexible payment process and explained how our solution seamlessly plugs into your ERP of choice.
And part 4? YayPay’s payer analysis. This is how YayPay enables AR professionals to accurately predict when customers will pay their invoices.
Why do payment projections matter?
Having a clear view into when you’re going to be paid has, of course, always mattered. And in recent years, it’s only become more critical. It informs cash flow forecasting, ensuring that you can keep a pulse on your company’s current economic status, as well as where it’s headed.
The only thing that’s now certain about the economy is that it’s uncertain. Supply and demand fluctuations are commonplace and the ability to adapt is dependent on you controlling your revenue and cash supply.
To achieve this? You need to know what cash is coming into your business — and when.
What sets YayPay apart?
Our platform uses two algorithms — powered by machine learning — to understand the payment behavior of your customers. These then generate the most accurate prediction on when each invoice will be paid.
The first is our on-time prediction algorithm. This looks at current invoices to predict if an invoice is going to be paid before the due date.
Our second algorithm is the overdue prediction. This is used for overdue invoices only, predicting which bucket the invoice is going to fall in, from 1-30 days, 31-60 days, 61-90 days and 90+ days overdue.
What drives the prediction?
When YayPay integrates with your ERP, it pulls data from historical customer documents including paid invoices, old payments and credit memos. This is then used to create a customer credit profile that details average payment time, credit limit, average days overdue and seasonal payment behavior. That being, if there are any specific times of the year during which payment patterns change.
The same profiling approach is applied to your business as a whole to understand your typical customers — how they pay you, and what to expect from them. At the invoice level, YayPay analyzes specifics such as total invoice amount, the number and dollar amount of invoice items and any notes on the invoice.
This data is displayed on intuitive, customizable dashboards. YayPay presents two separate charts that display projections on when invoices are going to be paid, as well as how much money you will receive on a particular day.
This chart displays the amount of funds projected to be received on a daily basis over the next 30 days. This time period can be adjusted, whether you want to see your funds over the next 7, 17, 30 or 60 days. The top right of the image shows the total projections for the selected period of time across promise to pay, projected to be paid, projected to be unpaid and past due with no promise to pay.
Have I seen this capability in other solutions?
The difference between YayPay’s technology and our competitors is the machine learning aspect. Other solutions may offer customer scoring, but this information isn’t powered by algorithms that are continuously monitoring customer behavior and adjusting your approach accordingly.
YayPay provides a letter grade from A-E, enabling users to define specific workflows for customers depending on their grade. This could mean that a reliable payer is assigned to a low-touch workflow, whereas a riskier customer would be put on a high-touch workflow. When a customer starts paying late, YayPay automatically adjusts your collections approach by assigning the customer to a high-touch workflow. Similarly, if a customer improves their payment behavior, they’ll be contacted less frequently — that is, unless their payment speed dips!
It's all about the accuracy
YayPay works with businesses across many industries. Every business is different and this means some are more predictable than others. At their lowest, our payment predictions are 84% accurate, and their highest accuracy sits at 94%. This means that YayPay can correctly predict customer payment behavior at least 83% of the time!
This level of visibility into your future cash position helps keep your business prepared. Although cash flow projections can never be perfect (as there are so many variables outside of your control), this reliable line of sight into your customers and your cash position helps protect your business’ financial health.