7 Benefits of Accounts Receivable Automation

Having incoming revenue is vital for the growth and development of any business. And yet, many companies, regardless of their sizes, struggle with processing and clearing their invoices on time. Between clients not paying when they should and the often slow invoicing process, companies can find it hard to convert account receivable to beneficial company cash flow. 

To solve this problem, businesses are adopting accounts receivables automation to handle the gritty aspect of invoicing for the AR team. The result is a better efficient process. As AR teams who adopt this technology would testify, there are many benefits of adopting accounts receivable automation.  

Here are seven accounts receivable automation benefits. 

Fewer Chances of Human Error 

As meticulous and conscientious as your team is, they are still susceptible to one flaw – the human component. This component is why sensitive documents have errors despite the careful and dedicated workers handling them. Short of automating every process in accounts receivable, there’s no way to ensure there are zero errors on invoices. However, adopting AR automation can control the number of mistakes made. 

The software used in AR automation is more accurate than humans. It will make far fewer mistakes unless the human imputing raw data makes a mistake. 

When AR automation and human components work together, the results are incredible to behold. Also, the fewer disgruntled customers, the better for your business.

Development of Standard Collection Solutions

Without automation, most collection solutions do not have a standardised process. Different team members may handle other clients’ invoices with strategies that they have developed on their end. In this case, one company may end up with different accounts receivables strategies that differ from client to client and may not be very effective. 

Automation takes these multiple strategies away and introduces a standard process for accounts receivable. This process is open and accessible to everyone on the team. Because the process is automated, the times and dates for reminders are taken care of by the credit control software with already in-built templates. 

Uniformity in the collection process is another added advantage here. Companies should have a standard approach to adopt for accounts receivable irrespective of the client. It gives the business a good reputation and might induce clients to work with them.

Improved Customer Service 

Customer service is considered one of the most critical factors clients consider when deciding to stay with a company or move on to another. Every contact with your client is an opportunity to offer a good customer service experience and give them a reason to stay. 

Automation makes this easy. To begin with, it eliminates the use of third-party collections and allows the business to handle the collection services. The collection process with automation is swift, accurate, and thorough. Cases of lost invoices, misplaced invoices, and inaccurate information would hardly ever occur. The collection service is also smoother, which customers appreciate a lot.

Improved Efficiency and Communication 

The use of software to automate activities improves efficiency. The software can complete tasks that will take human team hours or days to complete in a few hours or minutes. 

One of the accounts receivable automation benefits for businesses is improved efficiency and communication among team members. With credit control software, all background information about clients can be accessible to everyone on the team leading to better communication and more efficient handling of collection. Should a team member be on vacation, their absence wouldn’t cause a bump in the collection process as all the information needed can be accessed by someone else on the team.

AR automation also ensures that invoices are prepared without errors and with consideration made to the client’s peculiar situation. All of these affect the response and success rate as well. A few things to consider are the size of your company, your accounting needs, the features of the software, and reviews.

Saves Time 

As with efficiency, automating your accounts receivable process saves time and money. With software handling the often rigorous process of setting invoices, processing them, setting reminders, and all the other collection processes, the computer can save a lot of time. 

Human staff handling these tasks can then focus their energies on handling other important tasks which will contribute to company growth. By saving time and human resources, AR automation saves money and increases the revenue-making capacity of a company.

Improves Cash Flow 

The upside to having an efficient collection solution process is improved cash flow. In my introduction, I highlighted the issues companies face trying to balance growth with delayed incoming customer revenue. Companies that struggle with this find it very difficult to sustain an uninterrupted growth incline. 

Accounts receivable automation improves the collection process for outstanding invoices. The best method to measure that improvement is by measuring the progress in incoming revenue. 

More efficiency, fewer errors, and saved time lead to one thing – clients paying on time more often than not. In addition to having earlier payments, AR automation also reduces the number of charges that never get paid. This revenue can then be invested into the company’s growth.

Opportunity for Data Collection 

The opportunity to have access to collection analytics courtesy of accounts receivable metrics is one of the biggest advantages of automating your AR process. Data collected from previous clients and situations makes collection solution processes more efficient and result-oriented over time. This data is spread across different team member notes and accounting systems in a manual AR process. 

When companies plan to make changes, they’d have to hunt this information down from different locations before analysing and making decisions. AR automation makes this process seamless. Now, all collection data, including information on particular cases, are stored on one software that everyone can access.

In Conclusion 

There’s no doubt that maintaining a manual accounts receivables process is time-consuming, inefficient and prone to errors. On the other hand, AR automation covers these inefficiencies. It makes all the difference between several late or unpaid invoices and a revived revenue stream. 

This is why it is essential for companies looking to adopt AR automation to be careful when choosing the right accounting software because it could either prop you up for growth or make a mess of your finances. With automated accounts receivables, invoices are created on time, invoice information is open to all, and customers enjoy better customer service experiences.