Risks Of Avoiding An Automated Collections Software
AUTOMATIC COLLECTIONS SOLUTION
Running successful business involves monitoring and streamlining the entire order-to-cash process, from order entry, shipment and delivery, to accounts receivable collections. Even though many finance professionals invest in an ERP system that encompasses order-to-cash activities and operations, they sometimes ignore the successful implementation of software that focuses specifically and explicitly on the collections process. This oversight might lead to myriad risks associated with incomplete implementation of an automated collections software.
One major risk of not using dedicated collections software is the resounding effect it has on customer relationships. Accounts receivable systems are primarily designed to optimize debt collection activities and processes, but manual systems offer no proper oversight over past-due invoices. This may cause customers? payments to be delayed or even lost and forgotten creating compromised customer experiences and fast spread of disorganization among staff members.
In addition to the perilous effect to customer relationships, another risk posed by manual collections processes is decreased productivity. Without an automated collections software, accounts receivable processes tend to be segmented, arduous, and repetitive. Consequently, staff members might struggle to keep up with the number of overdue invoices. This overwhelming task can cause employees to become careless or leave the tasks incomplete, leading to further delays in cash collection and loss of potentially collectible revenue.
Most importantly, the risks of avoiding automated collections software extend to limited visibility and control. Manual collections activities involve several risks that are caused by manual errors, such as losing track of collections activities, collections gaps, and miscommunications. Without automated channels, it is difficult to gain insight into the overall AR health of the company and make informed decisions. Relying on manual processes may also expose businesses to higher risk of fraud and costly billing errors.
Choosing to avoid an automated collections software can be risky. Compliance with regulatory requirements, negative customer experiences, reduced productivity, and lack of guidance and control over activities can all be the consequence of manually-managed collections processes. Investing in an integrated accounts receivable system offers visibility and control, leading to increased efficiency, better customer experiences, and higher rate of return on investment.
