The manual financial management system is outdated for a long time. It spends a lot of money and human resources, and also often leads to an unsatisfactory result. New digital technologies are available today for the automation of accounts receivable (AR). They save time and costs for routine work, allowing them to redirect them to a more demanded channel and increase the company’s efficiency in all directions.
Let’s take a look at why it is worth increasing the efficiency of the company with AR automation.
Accounts receivable: definition
Accounts receivable are cash that the company did not receive after the sale of its products/services to legal entities or individuals. The latter automatically become debtors.
There are 3 categories of debts: accounts receivable, bills receivable, and other receivables.
Accounts Receivable Automation: Definition
Accounts receivable automation is the implementation of software that translates standard manual settlement processes into a fast, automated, and streamlined e-management system.
By introducing AR automation into your business at every stage, you will increase the efficiency of financial management and improve cash flow.
The benefits of AR automation
Accounts receivable is a complex financial system that lacks standardization and is filled with manual operations, which often leads to interruptions and errors.
AR automation solves these problems and allows you to:
● save time and resources for all operations;
● reduce the number of repetitive tasks;
● prevent errors;
● reduce financial costs for work processes.
It is enough to implement the software once, and you will immediately receive all the benefits, as well as increase work efficiency.
Top Reasons for Automating AR
The main reason for introducing technology into the financial management system is to increase profits. Thus, according to an independent research company, it was possible to achieve a 390% return on investment.
Let’s take a look at other reasons why it’s worth implementing AR automation in financial management.
No. 1. Reduced financial costs
Eliminating time-consuming manual tasks from workflows leads to instant savings in financial costs. The software independently copes with:
● manual printing;
● sending requests;
● credit check;
● e-invoicing and e-mailing in PDF format;
● reconciliation of payments;
● handling fees and disputes.
Automating accounts receivable has a positive impact on the company’s performance by increasing employee productivity and eliminating the cost of monotonous manual tasks.
No. 2. Improving efficiency
AR automation saves employees time on processing payments and invoices, which leads to increased efficiency. With the software, you can register new customers in just a couple of days. Also, there is no need to waste time sending e-mail and downloading documents, all invoices will be distributed automatically, which will directly affect your profit.
No. 3. No calculation errors
The presence of a human factor in a given industry often leads to errors and inaccuracies in calculations. For example, overpayments, fraudulent and recurring payments appear. AR automation guarantees minimization of the risks of their appearance. In addition, with it, you can offer clients bonuses for early payment of debts.
No. 4. Employee retention
Customer retention, revenue growth, and successful payments are critical to a company’s performance. All this is provided by employees, who are often overloaded with routine and uninteresting paperwork. This leads to making mistakes and not being able to realize their professional potential.
AR automation will help employees improve other critical processes, participate in the development of strategic campaigns and get more job satisfaction.
No. 5. It’s simple
With an automated accounts receivable system, there is no need to duplicate and format documents. After installing the software and initial configuration, all accounting data automatically go into it. The same goes for account information, payment history, and more.
You no longer need to drive everything manually, it is enough to make high-quality software settings.
No. 6. Process standardization
All system data will be located on one accounting page. Thanks to a single source, processes will be able to work according to a standardized scheme, which will eliminate the clutter of information.
In addition, you can integrate programs with convenient payment systems.
Automation of accounts receivable is an opportunity to reduce time and resources for work processes, reduce the workload on employees and increase the company’s profit. The software is capable of performing all routine processes on its own, creating and sending reminders and invoices. By automating AR, you get a standardized work system that will avoid miscalculations and mistakes.