In a perfect world, all businesses would have the time and manpower to handle every process internally. In the real world, companies often need to find creative ways to get everything done on time and under budget. Automation has changed the way companies and their accounting departments tackle this challenge. Consequently, automation in AR collections has led to some remarkable results.
What Is the Automation of Accounts Receivable?
In its most basic form, AR automation is the use of technology to speed up and simplify certain tasks related to AR. This can include anything from using software to streamline the invoicing process to automating customer communication.
What Is AR Invoice Automation?
AR invoice automation specifically refers to the use of technology to automate the creation and sending of invoices. This can include automating the generation of invoices from data in your accounting system, as well as automatically sending invoices to customers via email or text message. Some companies prefer this over automating the entire AR process.
When Should Your Business Consider Accounts Receivable Process Automation?
Automation is the ideal solution for virtually any business task that includes manual entries and tedious processes. Considering how many AR steps fall into this category, you would be hard-pressed to find an AR team that would not benefit from automation. Even so, some businesses need automation more than others. If any of the following sound familiar, it’s time to start looking at software options:
- You have a lot of invoices to send each month.
- Your customers are spread out across the globe.
- You have a lot of customer communication to manage.
- Your invoicing process is time-consuming or prone to errors.
- You struggle to keep up with your accounts receivable tasks.
- Your AR team is working overtime and experiencing burnout.
How Does Using an Accounts Receivable Automation Solution Save Your Business Time and Effort?
There are so many ways that using AR automation solutions can improve efficiency at your business. Consider the following as the mere tip of the iceberg:
- Automating the creation and sending of invoices saves a significant amount of time compared to doing it manually.
- Automated customer communication eliminates the need to manually contact customers about their invoices.
- Automating the accounts receivable process reduces errors and improve efficiency.
- Automation generates real-time reports on key performance metrics, such as DSO.
What Are the Benefits of Accounts Receivable Automation?
Most business owners turn to the automation of accounts receivable processes because of the cost-savings in time and money. However, there are so many additional benefits your business can take advantage of:
- Improved Cash Flow: Automating your accounts receivable process can get you paid faster.
- Better Customer Service: Automated customer communication can help you provide better service to your customers by making it easier to pay.
- Reduced Costs: Digitizing your accounts receivable process can save you money on printing and postage.
- Increased Efficiency: Automating your AR process streamlines your workflow and improves efficiency.
- Easier Tracking and Reporting: Automated accounts receivable systems often include built-in tracking and reporting features that can make it easier to keep tabs on your invoices and payments.
What Are Some Automated Accounts Receivable Challenges?
There is no such thing as a perfect solution. Every change you make within a business will have its challenges. These are the most likely ones you will encounter when automating your AR processes:
- Implementation Challenges: Implementing an automated accounts receivable solution requires some technical knowledge. It’s important to make sure that you have the right team in place to help with the transition.
- Training and Support: Once you select an automated accounts receivable solution, you’ll need to train your team on how to use it. Also, create a plan for ongoing support.
- Change Management: Automating your accounts receivable process can lead to big changes in your workflow. Manage this change carefully to ensure a smooth transition.
What Are Some Best Practices for Automation in AR Collections?
How well your accounts receivable automation solution works depends on how well you manage and monitor the transition. Use these best practices as your starting point:
- Do Your Research: Research the different automation solutions available and choose one that fits your needs.
- Plan Ahead: Create a detailed plan in place for implementing your automation solution.
- Train Your Team: Provide initial and ongoing training on how to use the new system.
- Set Up A System for Tracking And Reporting: Create a system in place for tracking your invoices and payments.
- Get Help If You Need It: Make the transition a team effort and increase employee buy-in.
- Monitor the Change: Continue to monitor the impact the change has on AR processes and make additional changes as you receive feedback from your team.
With the right preparation, you can successfully automate your accounts receivable process and reap the rewards. By doing so, you can free up time and resources to focus on other areas of your business that contribute to your bottom line.
