Accounts Receivable Risk In Lack Of Automation
Automation In Accounts Receivable
Managing accounts receivable is time-consuming process, but critical for healthy cash flow and fiscal health of business. Anti-theft controls, streamlining process, tracking invoices and credit checks, working with collections and aging reports all can be complex, but necessary tasks for accounts receivable.
Going without automation for Accounts Receivable means increased risk of inaccuracies in data, an increase in time manually managing the process, and slower customer account management all adding up to the potential for loss of revenue. Studies have found that manually handling the Order-to-Cash process can add up to 18% in labor costs over the automated process.
In addition to greater costs, lack of automation creates lack of visibility it is difficult to keep track of every individual transaction, let alone stay ahead of changes that can occur in invoices and/or payment schedules. Depending on the volume of business, manual account tracking can be overwhelming, leaving little room to be proactive in terms of improving customer relationships or analytics.
Without automation, there’s also risk of missed or late payments by customers. Finance executives need the right Order-to-Cash technology to accurately monitor payments, identify delinquent customers and help ensure the effective collection of receivables. Manual processes fail to keep pace with dynamic customer demands and can lead to missed opportunities for improved customerservice.
Coupled with the risk of lost revenue, manual accounts receivable can also result in lack of accuracy when calculating taxes. It can be difficult to accurately report taxes on manual basis and make sure they’re paid on time. Automation eliminates manual error, taking the need to go through each customer account, permitting business to quickly identify and resolve accounting errors by promptly reporting on income and deductions.
At the end of the day, finance executives face critical decision when considering the need for automation in their Order-to-Cash process. Automation is essential for accurately monitoring accounts receivables, streamlining the process for shorter cycle time, and identifying high-risk customers and areas for improvement. Failing to automate this process can lead to an increase in labor costs, lack of visibility and an overall increase of risk in the entire process.
