Modernizing Accounts Receivable Arethrough Automation
Challenge To Automate Accounts Receivable
As member of the C-suite, you understand that the accounts receivable (AR) process is an integral part of the Order-To-Cash (OTC) workflow for any business. However, it is often the most labour-intensive and time-consuming process in the OTC. As result, the process has resulted in many organizations running into various inefficiencies such as longer payment cycles, late payments, and an increase in manual processing. bespoke automated solution is the most effective way to ensure you are running streamlined and efficient accounts receivable process.
This guide provides step-by-step process to help you implement an automated accounts receivable solution. To start, it is important to familiarise yourself with three of the key components of the AR process, which are:
1. Credit Risk Assessment The process of determining the payment terms associated with certain buyers in order to mitigate the credit risk business faces when it provides goods or services on credit to customers.
2. Invoicing The process of generating invoices to customers in order to fulfill the OTC workflow.
3. Collections A process of following up on unpaid invoices and collecting payment from customers.
Now that you are familiar with the AR process, here are the steps for setting up an automated AR solution for your business:
Step 1: Assess Your Current AR Process
The first step is to assess the current AR process. This includes reviewing the current accounts receivable system and processes. Identify areas where the process can be improved and streamlined, document them, and define performance metrics. This will help you identify the objectives of your automated solution.
Step 2: Identify the Necessary Features and Integrations
Based on the assessment of your current AR process, identify the necessary features and integrations required. This includes features such as real-time management of invoice data, automated collections workflows, and credit risk assessment integrations.
Step 3: Select Solution Provider
Once you have identified the necessary features and integrations required, it is now time to start evaluating order-to-cash software providers. Look for vendor that can offer the features you need and integrate with your existing systems. Make sure to compare the different offerings and price points of different vendors before making decision.
Step 4: Understand Your Deployment Options
The next step is to understand how the chosen solution can be deployed and how it will integrate with existing systems. Some solutions require an on-premise installation and some can be deployed in the cloud. Make sure you understand and are comfortable with the deployment options before proceeding further.
Step 5: Collect the Necessary Information
Now that you?ve selected solution and are ready to implement it, you will need to collect the necessary information. This could include customer data, credit terms, invoices, and payment information. This information will be used by the automated system to process invoices and payments, so it is important to have it in the right format.
Step 6: Test and Train Users
Before going live with the new automated solution, it is important to test all of the features. This includes testing the integration of the system with existing systems, testing the credit risk assessment process, and testing the accuracy of invoices and payments. Additionally, you will want to train users on how to use the system.
Step 7: Go Live
Once the testing and user training is complete, you can now go live on the new solution. You can now start automating the accounts receivable process and begin realizing the benefits of the automated system.
By automating the accounts receivable process, your business can become more efficient, reduce payment cycles, and increase cash flow. By following the above steps and selecting the right solution, you can ensure that your business has robust automated accounts receivable solution in place.
