Costs and pricing

How the money moves

Fees flow three ways at once: each side pays its own bank, the seller pays the card networks and banks, and the platform takes a cut. Behind them sits a bigger cost that shows up on no fee line: the cost of lending.

Take the $10,000 invoice: a check costs a dollar or two plus lockbox fees and float, ACH under a dollar, a wire $10-20, and a purchasing card keyed online roughly $250-300 in interchange, or under $200 with validated Level 3 (line-item) data. On large tickets a card costs a hundred times more than ACH, and that interchange is what funds the payer's rebate. Processors say Visa now checks those line items and charges a small fee on that volume, so fake ones quietly downgrade the rate.

The cost of lending

• Carrying receivables. Receivables are roughly sales times DSO over 365: at CRF's median, $100M of credit sales ties up about $10M, or about $0.8M a year at an illustrative 8% cost of funds.
• Credit insurance. Export Development Canada's small-exporter policy covers up to 90% of losses on export sales, up to $500,000 per customer (December 2025); EXIM's multi-buyer policies cover 90% to 95%. An insurer's limit cut works like a credit hold.
• Factoring and lending. Asset-based lenders commonly advance 70% to 85% of eligible receivables, up to 90% for B2B, leaving out invoices past due three times terms, affiliates and over-concentrated customers (OCC, March 2025). North American factoring turnover was about €160B in 2025 (FCI, May 2026).
• Deductions. CRF's 2012 survey of sellers to retail found a median 2% of sales deducted, but only about 0.03% of sales lost to invalid deductions, since few were invalid and most of those were recovered. When a grocery chain short-pays a $20,000 invoice by $600, citing a shortage, someone has to pull the proof of delivery, check the count and dispute it before the retailer's deadline, and that work can cost more than the $600. So the expensive part of deductions is the research labor, plus the valid ones, which are really margin given away.

How AR fintechs make money

Most AR fintechs combine several of these: subscription (per seat, entity or invoice volume, sold on lower DSO); per-transaction fees (cents to about a dollar per ACH, a percentage on cards); card margin over the true interchange-plus cost; float (interest on funds in transit, which needs a money transmission or sponsor-bank structure); and payer-side networks (supplier-paid virtual card interchange plus "enablement" fees), which compete for the same payment.

Public filings agree: transaction fees are usually most of revenue, interest on funds in transit is a meaningful share, and supplier-paid virtual card interchange can be large. Some AR vendors pitch a flat subscription with free bank payments and card fees passed to payers; I read that as positioning. As far as I can tell, the rail that costs your seller the most is often the one that earns the platform the most.

DSO, CEI and days delinquent

DSO is the headline; CEI (collection effectiveness index, the share of collectible receivables collected) is fairer; ADD (average days delinquent) separates lateness from terms. CRF's Q2 2026 medians: DSO 37.50, ADD 3.70, CEI 79.35.

How companies of different sizes use it

I size sellers here by the revenue they sell on credit rather than by headcount, because a 40-person distributor can send more invoices than a 400-person software company. Nobody publishes order-to-cash spend by size, so the spend figures below are my rough estimates, built from APQC's cost benchmarks, list prices and buyer data. APQC's numbers also show that sellers under $100 million of revenue spend more than twice as much per dollar of revenue to process receivables as the median company. Who the customers are matters almost as much as size: a small seller to big-box retailers deals with portals, compliance manuals and deductions years before a bigger software company billing mid-size firms does.

A startup (under about $10 million a year of credit sales) has a few dozen to a few hundred business customers and sends invoices straight from QuickBooks or from its payment processor. Instead of AR software it uses processor-priced invoicing such as Stripe Invoicing or QuickBooks Payments, which take a small cut of each paid invoice on top of card and ACH fees, and many of its customers are small firms that want terms and pay by card. Startup credits are thin here: Stripe gives new Atlas companies a year of fee credits, and I didn't find an AR vendor with a startup program. The founder or a fractional CFO owns collections, with a bookkeeper applying cash. For a seller of a few million dollars a year, my rough estimate is $20,000-60,000 a year in cash, almost all of it payment fees. What usually pushes it to the next step is a first large customer that sends a vendor-onboarding packet, asks for longer terms, makes the seller register on SAP Business Network or Coupa and pays by ACH or virtual card. Card fees on bigger tickets, and an audit or fundraise that needs a real ERP, push the same way.

A scale-up (about $10 million to $100 million) has hundreds to a few thousand customers and usually moves its books from QuickBooks to NetSuite, Sage Intacct or Dynamics 365 Business Central. It opens its first lockbox at its operating bank and writes a credit policy. If it sells to retailers, deductions and portal registrations start here too. It adds an AR tool on top of the ERP, such as BILL, Versapay, Billtrust or a newer AI-led tool like Tabs, gets negotiated card pricing from its processor, and may buy Dun & Bradstreet reports or, in trucking and staffing, a factoring line from Triumph or eCapital. A controller or the first full-time AR lead owns it under a VP of finance, and sales still chases some late payers. My rough estimate is $150,000-750,000 a year, mostly people and card fees, with software the smallest part. Carrying the receivables costs about as much again, which is why DSO becomes the number the CFO watches. An asset-based loan or a credit insurance policy usually pushes it on, since either brings outside rules on aging and limits, along with unapplied cash piling up as invoice counts grow and a second legal entity or a move into Canada.

A mid-market company (about $100 million to $1 billion) has thousands of customers, several legal entities and often sales in both the US and Canada, on NetSuite, Dynamics 365, Sage Intacct or an older on-premise ERP. Credit becomes a real function, with a credit team, collectors and a deductions analyst. The company buys an AR suite (HighRadius, Billtrust, Versapay or Esker), usually starting with cash application and collections and adding credit and deductions later, plus treasury services from its bank: a lockbox with data capture, ACH origination and instant-payment receipt. Credit insurance from Allianz Trade, Atradius or Coface (EDC for Canadian exporters) and bureau data come in here too. A credit manager or director of credit and collections owns it under the controller or CFO, while treasury owns the bank and IT the ERP. My rough estimate is $250,000-2.5 million a year across the whole process. This is also where outsiders start writing the AR rules. An asset-based lender decides which receivables count toward the loan, controls the lockbox and has to consent before the seller changes its remit-to details or adds a payment platform, and a credit insurer sets per-customer limits and maximum terms. An IPO or a big acquisition (with SOX controls over revenue and receivables), a new ERP or a shared-service center for several business units pushes it on.

An enterprise (about $1 billion to $7.5 billion) has tens of thousands of customer accounts across many entities and currencies, on SAP, Oracle or several ERPs left over from acquisitions. A shared-service center runs cash application and collections under a global order-to-cash process owner. It buys HighRadius, Esker or Billtrust, or uses the ERP's own modules, and banks with several of the big names (JPMorgan Chase, Bank of America, Citi, Wells Fargo, RBC). The lockbox is picked by RFP and often goes to the banks in its credit facility, which I'd expect to want the payments business in return for the lending. At the top of the band, treasury adds a receivables securitization or purchase facility, mostly funded through large banks. A VP of credit or the process owner runs order to cash under the controller or CFO, and the treasurer owns the banks and the securitization. My rough estimate is $2-17 million a year across the process. Even an enterprise complies when its customer is bigger, with long terms, portals and deductions. The push here is the ERP: SAP's mainstream maintenance for its older ECC suite ends at the end of next year, and many enterprises pick their order-to-cash tools again during the move to S/4HANA.

A Fortune 500 company (above about $7.5 billion) runs order to cash from global business services centers, often offshore or outsourced, across several ERPs and hundreds of thousands of accounts, including government and retail customers with their own payment rules. It uses the ERP's own modules plus one or two suites such as HighRadius, Esker or Billtrust, outsources parts of collections and cash application, and runs securitization and supplier finance from treasury. These companies are also huge payers, so their own AP terms and virtual card programs shape how their suppliers get paid. The CFO organization owns it: a global process owner, the head of global business services, the treasurer and a chief credit officer, with procurement buying the software and the outsourcing. My rough estimate is $15 million to $200 million or more a year at the largest. There's no next size up. The pressure comes from boards and investors on working capital (the Hackett Group found DSO at large US public companies getting worse two years running), from ERP end-of-life dates and from the terms lenders and rating agencies set on the securitization.

What changes as a company grows (spend is my rough estimate):

None of these figures includes carrying the receivables. At the median DSO, that costs more than any single line in them (card fees, software or people) at every size.