Report:
Magic Quadrant for Invoice-to-Cash Applications
How does Gartner define the Invoice-to-Cash Applications market in 2024?
Gartner defines the invoice-to-cash (I2C) applications market as cloud-based applications that enable corporate controllers to automatically manage collections and apply customer payments to invoices. I2C applications typically gather, disseminate, track and analyze data from and to internal and external sources. They make I2C processes more efficient and effective, including managing and monitoring deductions, disputes and credit risk. They also typically can ensure invoices are delivered to customers and that customers have options to pay them. I2C applications enable I2C transaction processing across multiple ERP systems. Organizations use I2C applications to collect and apply customer payments to open invoices, perform credit and collections activities, manage deductions and disputes, and deliver and present invoices to customers for payment. I2C applications are cloud-based tools that provide organizations with a standard way of processing across ERPs, while creating flexibility for buyers in how they receive or access invoices as well as pay and dispute them.
Key Facts for Magic Quadrant for Invoice-to-Cash Applications in 2024
- Publication Date: 06-May-2024
- Document ID: G00794794
- Coverage: Global
- Authors: Tamara Shipley, Valeria Di Maso
- Core Purpose: Invoice-to-cash applications use a single platform with automation and predictive capabilities to drive cash flow, improve collections and enhance customer experience. Corporate controllers can use this research to assess vendors that enable the digital transformation of invoice-to-cash processes.
Strategic Planning Assumptions
No strategic planning assumptions provided.
How was the Invoice-to-Cash Applications market evolved in 2024?
- Gartner defines the invoice-to-cash (I2C) applications market as cloud-based applications that enable corporate controllers to automatically manage collections and apply customer payments to invoices
- I2C applications gather, disseminate, track and analyze data from internal and external sources to make I2C processes more efficient and effective
- I2C applications enable I2C transaction processing across multiple ERP systems
- Organizations use I2C applications to collect and apply customer payments to open invoices, perform credit and collections activities, manage deductions and disputes, and deliver and present invoices to customers for payment
- Such activities result in faster collection of cash, improved visibility to cash flow, an improved customer experience and reduced process cost
- The I2C applications market continues to evolve due to increased regulations and demand for e-invoicing compliance, consumerization of payments options and capabilities, and demand for optimized processes
- An integrated solution remains a key driver of I2C technology investment
- AI and ML use cases are increasing across the market
- I2C vendors offer enhanced e-invoicing compliance support
- Vendor focus on implementation and integration support is accelerating
- Partnerships are increasing between I2C vendors and ERP vendors, banks, payment providers, and BPO providers
What product features are required to be included in this year's evaluation?
- The product must be a cloud-based application.
- The product must provide automated management of collections and the application of customer payments to invoices.
What are the common features of top products in the Invoice-to-Cash Applications space?
- The product can gather, disseminate, track and analyze data from and to internal and external sources to make I2C processes more efficient and effective, including managing and monitoring deductions, disputes and credit risk.
- The product can ensure invoices are delivered to customers and that customers have options to pay them.
- The product is an integrated platform that enables I2C transaction processing across multiple ERP systems.
Scope Exclusions
- Products bundled with ERP modules, accounting systems, or BPO/managed services contracts
- Products that cannot be sold, implemented, or operated as stand-alone applications
- Products released after 14 December 2023
- Vendors with fewer than the required customer thresholds
- Products lacking mandatory capabilities (cloud-based, automated collections, payment application)
- Products that don't exchange data across capabilities and multiple ERPs
Inclusion Criteria
Vendors must, among other requirements:
- Product released for general availability before 14 December 2023
- Stand-alone I2C application (not bundled with ERP, accounting systems, or BPO contracts)
- Data exchange across product capabilities and multiple ERPs
- Cloud-based application with customer invoicing, collections, customer payments, and cash applications capabilities
- At least one of: deductions/disputes or credit monitoring capabilities
- Minimum 275 active B2B customers OR 150 active B2B customers with 10% new logos from prior year
- More than 100 customers with annual revenue above $50 million (as of 30 September 2023)
Ability to Execute — Relative Weighting
- Product or Service - High
- Overall Viability - Medium
- Sales Execution/Pricing - Medium
- Market Responsiveness/Record - Medium
- Marketing Execution - Medium
- Customer Experience - High
- Operations - High
Completeness of Vision — Relative Weighting
- Market Understanding - High
- Marketing Strategy - Medium
- Sales Strategy - Medium
- Offering (Product) Strategy - High
- Business Model - Medium
- Vertical/Industry Strategy - Low
- Innovation - High
- Geographic Strategy - Medium
FAQs
Q: What does this research cover?
A: This research covers the invoice-to-cash (I2C) applications market, evaluating vendors that provide cloud-based applications for automating collections, applying customer payments to invoices, managing credit and collections activities, handling deductions and disputes, and delivering invoices to customers. The research analyzes 10 vendors across four quadrants (Leaders, Challengers, Visionaries, and Niche Players) based on their ability to execute and completeness of vision. It includes detailed vendor strengths and cautions, evaluation criteria, market trends, and strategic considerations for buyers.
Q: Who should use this research?
A: This research should be used by corporate controllers and finance leaders who are evaluating invoice-to-cash applications to digitally transform their AR processes. It helps buyers assess vendors based on their specific needs such as organization size, geographic presence, AI capabilities, implementation requirements, pricing models, and product roadmaps. The research is particularly valuable for organizations looking to improve cash flow, reduce DSO, automate collections processes, enhance customer experience, and gain better visibility into cash flow across multiple ERP systems.
Q: What are the mandatory features of vendors included in this market?
A: Vendors must deliver a cloud-based I2C application that includes: 1) Customer invoicing - integrating invoice data from ERP systems and distributing to customers through multiple channels including email, text and portals; 2) Collections - providing a single view of AR across ERPs and defining/automating collections actions; 3) Customer payments - enabling acceptance of customer payments through multiple methods with secure payment vendor integrations; 4) Cash applications - matching customer payments against open invoices based on remittance information and predefined rules. Additionally, vendors must provide at least one of: deductions/disputes management or credit monitoring capabilities.
Q: What are some reasons for not being included in this report?
A:
- Product cannot be sold as stand-alone application (must be bundled with ERP, accounting systems, or BPO contracts)
- Product was not generally available before 14 December 2023
- Insufficient customer base (below 275 active B2B customers, or below 150 with 10% new logos)
- Fewer than 100 customers with annual revenue above $50 million
- Missing mandatory capabilities (not cloud-based, lacks automated collections/payment application)
- Product doesn't exchange data across capabilities and multiple ERPs
- Vendor focuses exclusively on embedded ERP solutions (like Serrala with SAP-embedded FS² solutions)
Q: What differentiates Ability to Execute vs. Completeness of Vision?
A: Ability to Execute evaluates vendors' current performance, product quality, customer experience, and operational effectiveness in the market. It focuses on how well vendors deliver and support their products today, including sales execution, pricing, viability, and responsiveness. Completeness of Vision assesses vendors' strategic direction, innovation, and ability to anticipate future market needs. It evaluates their understanding of market trends, product strategy, innovation investments, and plans for geographic and business model expansion. Essentially, Ability to Execute measures present-day execution while Completeness of Vision evaluates future-oriented strategy and market leadership potential.
Reference
- Gartner, Magic Quadrant for Invoice-to-Cash Applications, 06-May-2024, ID G00794794
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