Modernizing Order To Cash: Automating Accounting Receivables And More
Automated Accounting Receivables
Account receivables automation (ARA) is rapidly transforming the way finance executives operate. It is the process of streamlining operational tasks within the order to cash and receivables processes. ARA streamlines business operations to help executives gain greater levels of insight into their operations and reduce manual activities, thereby simplifying their receivables process.
A reliable order to cash solution provides many benefits which enable executives to focus on their core business. Benefits of ARA include improved cash flow, increased access to data, fewer human errors and the opportunity to realign resources towards process improvement initiatives. Further, ARA can help finance executives increase customersatisfaction, improve customer retention and extend the A/R cycles without increasing the A/R staff.
In this article, we will discuss the process of automating accounting receivables and the steps that finance executives can take to initiate the process.
Steps to Automate Accounting Receivables
Step 1: Evaluate the Current StateBefore taking any action to automate accounting receivables, finance executives should first evaluate their current operations and process. The goal of this step is to identify where there are opportunities to improve efficiency and the areas where automation could be the most beneficial.
A thorough evaluation should consider the entire order to cash process, including billing and collections, invoicing, payment processing, credit decisions and reporting. Additionally, executives should take the time to review current accounts receivable metrics to determine if automation could give them competitive advantage.
Step 2: Choose the Right Automation SolutionOnce the evaluation is complete, executives can start to consider the different solutions available for ARA automation. The most common solutions are enterprise resource planning (ERP) systems and third-party point solutions.
ERP systems provide comprehensive solution for order to cash automation. While these solutions are often expensive and complex, they can be an effective tool for improving the entire receivables process.
In contrast, third-party point solutions provide single solution for specific problem. These solutions may be easier to implement and are often more affordable than ERP systems.
When evaluating solutions, executives should consider the size and complexity of their operations, their budget and scalability objectives. Additionally, executives should review the providers? track-records and customer references to ensure they are working with reliable vendor.
Step 3: Identify Infrastructure RequirementsBefore the solution can be implemented, executives should identify the necessary infrastructure requirements such as hardware, software, data capabilities and personnel. Every ARA solution comes with different requirements, and executives should evaluate each solution to determine which infrastructure is needed.
Executives should also consider how the automation solution will be integrated with other existing technologies. The desired automation solution must be able to integrate with existing infrastructure to eliminate any redundancies.
Step 4: Set Clear GoalsBefore beginning the automated accounting receivables process; executives should establish clear goals for the automation process. These goals should be specific, measurable and achievable. Setting clear goals will provide roadmap for successful implementation and ensure that all stakeholders have the same objectives.
Step 5: Streamline Business ProcessesExecutives should review existing business processes and identify any areas that can be streamlined. ARA automation allows for standardization, consistency and more efficient operations.
The most efficient solution should focus on streamlining all processes into one simple, unified workflow. This encourages an easier understanding of data, reduces errors and creates visibility throughout the receivables process.
Step 6: Test, Test, TestIt is essential to test the ARA solution prior to its full implementation. Executives should test the system with different scenarios and combinations to ensure accuracy. Executives should also monitor analytics to determine how the ARA solution is performing and how it could be improved.
Step 7: Monitor ResultsExecutives should regularly track the performance of the automation solution to ensure that the objectives established in step four are being met. This enables executives to make any necessary adjustments to the system and to maximize the system?s performance.
ConclusionAccount receivables automation can enable finance executives to reduce manual activities, increase efficiency, and improve customersatisfaction. Executives should take the time to carefully review their current operations and select the best automation solution for their organization. Additionally, they should continually monitor the system?s performance and make any necessary adjustments to maximize its effectiveness. With proper implementation and oversight, ARA can revolutionize the receivables process and help finance executives successfully move their companies forward.
