What You Need To Know About Account Receivable Automation And How It Works
Account receivable is perhaps the most vital function of any business. If clients are paying for a portion of their purchases on credit, this important department will be accountable for collecting the payments. These payments are necessary for the business to survive. Automating accounts receivables is the procedure of sending an invoice, following up on client payments and making sure you collect the payments owed to you through automation.
Some accounts receivable automation software does more like reconciling the transactions with the accounting ledger software together with a range of other things. This helps in eliminating manual procedure, and better help accept payments.
Collecting money is the lifeblood of a business, and for this reason, accounting companies strive to know how to help their customers collect money in the simplest way possible to grow their businesses.
Before the internet era and automation, the only viable means for credit management in any business was to form a collection file in their business or outsource the services. These two are cumbersome processes compared to automation.
Advantages of accounts receivable automation
Technology has made account receivable management more efficient. Here are the advantages of using this technology to show its effectiveness. With this, you can convince your clients of the usefulness of account receivable automation.
Improved efficiency and speed
Automation increases the efficiency, accuracy and productivity of the team handling account receivable processes. Using digital templates, the team can produce more invoices relative to the time it will take to create them manually. Besides,online delivery puts invoices into clients’ hands faster. The faster you can create the invoices; the sooner the clock will begin ticking on the payment terms. More complicated billing schemes like consumption-based billing will be calculated faster and more accurately.
Minimal human errors
Generating invoices manually is tedious and repetitive and is prone to many mistakes like transposition, omission, typos and duplication. Account receivable automation reduces the number of errors via the use of an integrated database that fills in client data and product info. It also facilitates the automated matching that links client purchases orders to invoices and shipping details. The automation process reduces the labour and time used to correct mistakes.
Automated account receivable minimizes the cost in many ways. For instance, they increased productivity since automation can lessen the number of workers required to process data such that they can work on high-value activities like investigating and resolving exceptions. It might be feasible to reduce the size of the AR team. Automation lessens the rate of uncollectible accounts since invoices are accurate and can be set to customers faster. Client accounts will be managed closely when incorporated with advanced management tools such as real-time AR ageing reports and dashboards. This assists in reducing bad debt.
AR dashboards offer easily digestible data, personalized to assist with daily tasks and higher level decision making, based on the users’ role. Client-level specifics, such as customer master files and real-time ageing reports, are accessible at detailed and summary levels. The dashboard showcases key performance indicators like DSO and AR turnover and allows the AR department activities like processing output, error rate and payment collection.
Improved cash flow forecasting
Account receivable automation helps a business get the highest amount of money collected in the fastest time, increasing cash flow. Additionally, it improves a business’s ability to predict future cash flow due to more consistent and reliable collection patterns. This is monitored using improved reporting with real-time insights.
Better customer services
The automated receivable process touches the clients. For this reason, it must be accurate, timely and professional, from invoicing to collection. Furthermore, making the payment process as convenient and simple as possible is vital, alleviating the processing expenses for clients’ accounts payable. Account receivable automation helps companies meet all these objectives, building client trust and reducing uncomfortable disputes.
Account receivable automation was made easier with Tesorio.
Tesorio’s accounts receivable automation tools allow you to program your whole accounts receivable operations, complete with a dashboard, specialized tools and integrated reporting for effective, efficient accounts receivable management. Book a demo if you are ready to automate your account receivable process.