The Complexities of Asset-based Billing Aren’t Unsolvable

Some businesses require more overhead than others, and along with that comes unique challenges.

Specifically, industries such as construction, car rental firms, commercial real estate and leasing agencies must all manage significant investments in capital assets effectively in order to ensure profitability. These at-first-glance diverse industries share at least two things in common: complex asset-based scenarios and struggles to address them.

Vast organizations choosing to operate and maintain sizable, pricey and often remote assets are challenged by complex global supply chains, weather-related impacts and environmental impacts, the latter often in response to public and legislative pressure. On top of those concerns, these asset-focused businesses are held to the highest of standards in terms of the health and safety of employees and the public alike.

Reports in recent years have indicated more and more of these asset-heavy companies create value by bringing their operations into the digital transformation fold. Asset managers for companies are being asked to become, essentially, digital leaders in order to help reduce long-term costs while improving performance. 

The foray into this digital transformation in finance for these organizations has been necessitated by the increasing complexity of financial markets, investment techniques, products and distribution, dynamic partner contracts and partner payments. Not only that but the multitude of contractual dimensions, complexity in billing and the existence of multiple sub-systems has required these asset-dense companies to open themselves up more to technology.

Asset managers are doing this through the use of new analytics tools to help improve both the customer experience and retention of their assets. With the resulting analysis in their ‘hip pocket,’ these decision-makers can make better-informed investment choices in a timely manner. Having your position, performance and attribution reporting integrated within your company’s risk-management and accounting systems will do that for you. 

Digging a bit deeper on this point, consider these ways a digital transaction management solution can specifically benefit equipment lease and finance companies:

• Improved end-to-end digitized lending experience for customers from pre-loan to signature through to transfer to third parties
• Reduced transaction costs by shifting away from paper to digital medium for asset lifecycle management 
• Improved operational efficiency by streamlining the leasing operation with digital transactions, allowing for earlier error identification

Most asset-centric organizations today find the best option for funding new equipment, vehicles, and their own digital transformation initiatives through asset finance and leasing.

Companies provided with working capital and term loans using inventory, equipment, machinery or real estate as collateral are working within this specialized asset-based arm of finance. In these cases, it’s the company’s assets securing the loan. Additionally, when there are gaps in a company’s cash flow, asset-based funding can be used to pay for expenses as well as startup company financing, existing loan refinancing, mergers and acquisitions and more.

Asset-based valuation is a form of business valuation focusing on the value of a company’s assets or the fair market value of those assets after deducting liabilities.

The availability of digital technologies and ever-powerful connectivity potential is pushing finance and leasing firms to develop new business models. Some interesting areas in which the asset-based and leasing industry is evolving specifically within FinTech (financial technologies) include, but are not limited to:

• Virtual reality - potential car buyers have the opportunity to visualize and customize
• Blockchain - rapid-fire, precise transactions optimizing ecosystems at low risk
• Artificial Intelligence - allowing for the use of automated credit scoring and processing, more intuitive UI and assisted customer interaction
• Financial automation - implementing an efficient billing engine that accommodates seamless transaction processing, increased BI (business intelligence) and powerful revenue management in lockstep with today’s business models

As indicated, the increased reliance on big data by these types of businesses offers many direct and indirect benefits. Outcomes include a more complete understanding of the customer base in terms of satisfaction and retention, the potential for new market opportunities, development of new products and services and improved decision making.

Leaders of asset-heavy industries not willing to digitally transform may quickly find themselves falling behind competitors ready to be more digitally agile.

The tentpoles of competitive advantage within this asset-laden business landscape likely to be impacted are (1) the ability to rapidly introduce and/or discontinue equipment based on changing business needs and (2) the ability to scale with new markets and opportunities.

The billing and invoicing flexibility of RecVue’s complete order-to-cash solutions, regardless of revenue model, can help organizations in asset-intensive industries maintain operational effectiveness, reduce asset ownership and management costs where possible, meet regulatory compliance guidelines and achieve sustainable growth targets.

Contact us today to learn how RecVue’s solutions helped global car rental leader Hertz integrate its billing and partner payment processes across 43k franchise offices, in total handling over 4.5M rental agreements each month.