Gaining visibility and control of your cash flow is an essential component of successfully managing the financial aspects of your business. You cannot plan for any growth without a reliable invoicing system and a way to track payments. Accounts receivable efficiency is vital in this regard. Your accounts receivable department is arguably one that cannot suffer any bottlenecks if you want to take a smart approach to financial strategy. This is where accounts receivable automation provides immense benefits.
Research shows that businesses in the Americas lose 52 percent of the value of their B2B receivables that are not paid within 90 days of the due date. That invalid or incorrect purchase order information leads to 49 percent of disputes. These lagging payments and error-based issues are just two of many problems solved with accounts receivable automation. Here are the top three reasons you’ll want to invest in accounts receivable automation software today:
1. Anticipate and Better Predict Cash Flow
The biggest benefit of investing in automated accounts receivable is improving your cash flow management. A study from Bill.com and CFO Research found that cash flow management is the top driver of finance leaders’ investment in accounts receivable automation. More than 91 percent of respondents said they are investing in some kind of financial technology to help their remote workers, while 88 percent reported investing in it to improve cash flow.
Business leaders can use automated accounts receivable to improve these types of manual processes:
- Following up with customers to send payments
- Notifying customers of late payments
- Other communication with customers regarding invoicing
- Enabling customers to pay easily and quickly
Accounts receivable automation can give customers the ability to pay directly from automated emails – improving your on-time payments. The Aberdeen Group reports that it takes three days to process an invoice from receipt until payment approval with automation. Under manual processes, that takes 12 days.
You’ll speed up cash flow and get better visibility into where and how money moves through your organization.
2. Improve Overall Productivity
Accounts receivable automation gives your employees their day back so they can contribute more strategic work, such as cultivating relationships with customers and producing more meaningful, data-driven reports. The software takes administrative tasks and paper-based processes and transfers them to automated operations. Steps like proofreading invoices are done by the technology.
Without tedious manual tasks to weigh it down, your accounts receivable department will become a well-oiled machine and won’t spend time fixing human errors. The Aberdeen Group also estimated that – in manual processes – the percentage of invoices issued with incorrect or incomplete information is 53 percent. With automation, it’s 14 percent.
Plus, with software automating many of the tasks that once took up their day – such as nagging late-paying customers and reconciling purchase orders – employees will be more productive overall.
3. Save Time and Money
One of the direct results of your employees getting time back is that they’ll be able to pinpoint ways to save your business money. With their brain space freed up from manual tasks, they’ll be able to:
- See where processes aren’t working and identify areas for improvement in accounts receivable.
- Identify, discuss, and solve for inefficiencies.
- Discover and implement ways to help customers through payment problems.
All of these improvements will be time better spent. And – since time is money – your business will see an improvement in the bottom line.
If you’d like to learn more about how you can transform your cash flow, productivity, and efficiency with accounts receivable automation, contact All Star Software Systems today. Our experts are ready to help.