Unleashing The Potential Of Automated Accounts Receivable
AUTOMATED ACCOUNTS RECEIVABLE MEANING
Timely and accurate accounts receivable management is critical component of efficient cash flow process and financial health of an organization. Despite of this, many businesses neglect to use software solutions for their accounts receivable processes. Failing to do so can have severe and costly implications, ranging from missed opportunities, delayed collection of cash and increased labor costs.
This article looks at the various possible repercussions that companies face when they do not take accounts receivable automation seriously. We examine how automating the Order to Cash process can bring financial benefits and other bonuses.
Cash Flow Analysis
It is known that not automating accounts receivable implies persistently delayed cash flows. According to research, 90% of all customers want an efficient, secure and paperless collection process. Not adhering to this highlights negative connotations for companies to the customers. This reduces the worth of services that companies offer.
A key aspect of effective revenue collection is posting customer payments accurately and promptly. This is especially important for large organisations managing hundreds of invoices per month due from multiple customers.
Manual processes are susceptible to human errors such as incorrect invoices, no visibility of cash situation and miscommunication between Accounts receivable and Accounts payable personnel. This can have dramatic effects to the cash flow cycle.
With automated accounts receivable, many of these manual efforts are eliminated. Each payment is processed quickly, efficiently and accurately with increased visibility of cash position. This is the key benefit of Accounts receivable automation.
Time Savings
Regardless of operation size, manual Accounts receivable processes are cumbersome and time consuming. Companies also need to consider additional payment resources and re-training costs due to projects being passed between personnel.
Automated accounts receivable tools enable streamlined and rapid processes, such as automatically sending invoices to customers, credit and debit note generation, posting customer payments and reconciliation. All of this drastically eliminates the tedious manual processes previously undertaken and can contribute to significant time savings.
Receivables Tie-ins
If companies are using Accounts Receivable software, then any number of extra benefit can be linked in. Examples of these could include analytical leads from customers, sales forecasting and customer data. Many of these features can further reduce costs and create further efficiency across the organisation.
In addition to this, automated accounts receivable links to other areas, for example cash allocations being linked to the sales ledger, general ledger and invoices. This creates an efficient workflow and prevents the fragmentation of customers data and the generation of unapplied cash.
Conclusion
Investing in automated Accounts Receivable is not only an investment in efficiency, but an investment in customer satisfaction that can bring many tangible gains to the company.
Without Accounts Receivable automation, businesses are exposed to the repercussions of missing payments, inaccurate accounts and reduced customer relations.
Organisations can expect reduction in manual effort, improved customer relations and more able forecasting all of which translate into more control and profitability.
