Automating your accounts receivable (AR) helps simplify your invoice-to-cash process by streamlining payment acceptance and enabling collaboration with your team and customers in one AR solution.
What is Accounts Receivable Automation?
AR automation involves applying digital technology to the manual tasks that often comprise accounts receivable, helping to ensure that payments are received on time, better managing cash flow. AR automation platforms use the latest advances in digital automation, including artificial intelligence, to reduce or eliminate some of the most tedious and time-consuming AR tasks.
What Tasks Does Accounts Receive Automation Perform?
Automated AR executes fundamental tasks, such as preparing invoices, handling reminders, capturing and entering data into the AR ledger, reconciling discrepancies, extending credit, updating records, and producing reports and financial statements.
Does AR Automation Remove Human Interaction?
The assumption that AR automation means removing the human element is simply not true. Because collecting payment is a sensitive activity, human interaction is essential in maintaining and enhancing customer relations. It can help make payment collection more efficient while improving the customer follow-up process in case of late payments.
What challenges do traditional AR processes present?
Common AR challenges include:
- Spending time on menial tasks, such as manual input, managing multiple spreadsheets, and manual customer follow-up.
- Addressing inaccuracies due to human error, which causes mistakes in invoices or inaccurate invoice delivery, makes it difficult for accounts payable to pay bills in a timely manner.
- Chasing down late—or non-paying customers can negatively impact business relationships and potentially result in long-term effects.
- Handling payment disputes in the absence of a clear paper trail.
All of these challenges lead to three main pain points:
- Wasted time
- Delayed payment
- Possible bad debt
- Negative impact on customer relationships
What are the Benefits of AR Automation?
AR Automation greatly reduces time, labor and costs while improving efficiency and accuracy. Benefits include the ability to:
- Simplify the customer payment process by providing an easy way to pay, check updates on payment and utilize their preferred payment option, such as credit cards and virtual cards
- Access the right financial metrics at any time, including centralized reports and dashboards
- Keep a real-time pulse on cash flow, including Days Sales Outstanding (DSO) reports
- Free-up accounting staff for less repetitive tasks
- Improve profitability through smooth accounts receivables
Having a smart AR Automation plan in place helps scale and grow your business by taking your cash collection strategy to the next level.
Automating accounts receivable provides greater visibility across the entire AR process by eliminating the guesswork and human error inherent in manual accounts receivable processes.
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