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How Veryable brought payments online and reduced DSO by 37%

Veryable is an online marketplace working to revolutionize U.S. manufacturing by connecting businesses to workers. Managing accounts receivable and cash collection had become a significant challenge for Veryable, hindering their operational efficiency.

Teonia Hansome

Staff Accountant

15%

of Veryable’s payment mix is now online (up from 3% in July 2023) via ‘pull’ methods through Upflow

37%

decrease in DSO, from 35 days in August 2023 to 22 days in July 2024 (net 15-day payment terms)

$52,000

biggest online payment processed (via card)

Mission statement

Veryable is revitalizing U.S. manufacturing, connecting businesses to workers through their online marketplace, enabling a real-time approach to production.

FTEs

200

Industry

Marketplace (Manufacturing & Logistics)

Offices

42 offices US-wide

Stack integrated with Upflow:

Intuit QuickBooks, Custom-Built ERP system

Challenge #1: The way Veryable was getting paid

Before choosing Upflow, Veryable faced difficulties in efficiently running their accounts receivable processes.

One major issue was the way they were getting paid. Although they used Intuit QuickBooks, which facilitated direct payments via credit cards and ACH debit, many of their customers still preferred to pay by check.

Check payments were significantly slowing down payment times and making the collection process cumbersome.

"Check payments are out of our control. It's primarily dependent on the mailing system. So sometimes we'll get a check three days after the customer sends it, or sometimes it's a month or two", notes Teonia Hansome, Staff Accountant at Veryable.

But it wasn’t only about the time it took to receive the checks. The processing time was also an issue. Customers typically sent payments on the invoice due date, rather than ensuring Veryable received the payment by that date. This delay meant that weeks could pass without the funds being available, hampering Veryable's ability to manage their finances efficiently. Teonia notes, "Just too many mediators in the middle that causes way too many problems that are out of our control."

This situation not only resulted in late payments but also meant extra time wasted on back-and-forth communications with customers who believed they had sent their payments on time.

Check payments are out of our control. Sometimes we'll get a check three days after the customer sends it, or sometimes it's a month or two.

Challenge #2: Communicating both internally and externally

Moreover, communication around accounts receivable and cash collection was a significant issue for Veryable. The fragmented nature of their system made it challenging to maintain clear and consistent communication both internally and externally.

Internally, it was difficult to keep track of collections and customer interactions across different platforms, leading to inefficiencies and miscommunications. Externally, the back-and-forth with customers about the status of payments often led to frustration and delays in resolving payment issues.

These fragmented communications had broader implications for Veryable's business operations. Inefficient communication could lead to strained customer relationships, and ultimately, a negative impact on cash flow.

Veryable needed a more centralized and streamlined approach to manage their accounts receivable processes effectively and improve overall communication.

Why Veryable chose Upflow

Initially, Veryable sought Upflow primarily for its cash collection capabilities, to bring their rising DSO under control - a major symptom of the way they were getting paid, primarily via check.

The decision to switch was also driven by the need for a centralized and efficient tool for managing collections. “Before we were trying to bring together QuickBooks and the credit card system we were using within our business platform. Different receipts from different companies and things coming from so many other places”.

"Upflow helps us communicate internally and externally, and there's a place for the history of all communications for each customer."

Teonia notes, “Being able to keep track of all that data and all the collections and communications that we're having with our customers and also with our team internally as well…it's just been really helpful in being able to automate a lot of things”.

While this was the reason for switching, the team at Veryable were soon happy to discover the broader functionality available in Upflow: "Along the way we found out you guys have way more functionality that we could use and which could possibly have a positive impact on our customers," notes Teonia.

Being able to keep track all the collections and communications that we're having with our customers and also with our team internally…it's just been really helpful in being able to automate a lot of things.

Bringing payments online

In light of their challenges associated with the way they were getting paid, Veryable set a goal to transition all their customers away from check payments.

A significant shift occurred as Veryable moved towards more online payments through Upflow. This transition was crucial for improving cash flow and reducing the dependency on slow, unreliable check payments.

“Having the option to pay directly via Upflow was a plus - it’s kind of like a one stop shop for us now”, notes Teonia.

Initially, Veryable chose Upflow for its comprehensive cash collection features, but Upflow’s payments functionality (Payments by Upflow) quickly became a game-changer, driving excellent results for the company.

With 15% of Veryable’s payment mix now being processed online via Upflow (95% via cards and 5% via ACH debit in Q2 2024), the company has seen some pleasing trends in high-value transactions also being paid online. In fact, the average transaction value for online payments currently sits over $2,000, with the largest payment received at $52,000.

The nature of these online transactions, unlike traditional payment methods like checks, means the cash they are owed has become available faster for Veryable to reinvest and grow their business.

All in all, Payments by Upflow has made it easier for Veryable’s customers to pay them by offering multiple payment via a consistent and seamless UX. This flexibility has further streamlined their payment processes and enhanced customer satisfaction.

Having the option to pay directly via Upflow was a plus - it’s kind of like a one stop shop for us now.

Reduced DSO means more cash in hand to fund growth

One of the most significant achievements, linked to Veryable’s ability to receive more payments online, has been the reduction in DSO (Days Sales Outstanding).

"Going back to August of 2023, our DSO was 35 days. This month it's 22 days," reports Teonia. This 13-day (or 37%) reduction in DSO has helped Veryable get closer to their net payment terms of 15 days, and means improved cash flow for the company, which is vital for business operations.

By lowering their DSO, Veryable has unlocked substantial financial benefits. Improved cash flow reduces financing burden, allowing Veryable to rely less on external funding sources and more on the cash generated from their operations.

This immediate availability of cash means that Veryable can reinvest in their business more swiftly and effectively, fueling growth and operational improvements.

Moreover, the reduction in DSO has provided a safety net, enhancing the company’s financial stability and allowing them to weather market fluctuations more confidently.

Going back to August of 2023, our DSO was 35 days. This month it's 22 days.

In summary: Upflow’s impact on Veryable’s business

Upflow has transformed Veryable's accounts receivable process, making it more efficient and centralized.

The shift to online payments has not only improved cash flow but also streamlined operations by reducing dependency on slow check payments.

With a 13-day, 37% reduction in DSO and enhanced communication, the team at Veryable is better positioned to manage their financial operations and focus on growing their business.

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