Automating your accounts receivable operation is one of the most important ways to gain better insight into your organization’s financial health. Paper-based processes that require manual workflows create delays and extra costs for businesses that can be avoided with automation solutions today. Research shows that paper invoices cost businesses $16 – $22 per invoice to process, and financial decision-makers are increasingly turning to accounts receivable automation to reduce these costs. Indeed, the accounts receivable automation market is expected to see a compound annual growth rate of 12.66 percent through 2025. This vital technology is seeing more adoption for reasons we dive into below.
What Is Accounts Receivable Automation?
Accounts receivable automation is software that overhauls your accounts receivable department’s manual processes and makes allocating and reconciling cash in your enterprise resource planning (ERP) solution a quicker, more efficient process. It reduces manual payment allocation, improves cash flow projections, and helps you allocate cash more quickly. The software automates matching remittance advice information with invoices and helps your team more efficiently reconcile them in your ERP, which improves your visibility into your bottom line.
How Does Accounts Receivable Automation Work?
Accounts receivable automation solutions provide the following functionalities:
- Captures orders, remittances, and checks, and extracts and validates data in this process.
- Centralizes accounts receivable document storage.
- Checks data used to create image cash letter (ICL) for automated deposit.
- Seamlessly transfers order and payment data to your ERP and makes documents instantly accessible directly from the ERP.
- Makes invoices and related content accessible to customers.
- Processes customer orders – no matter what form they arrive in (paper, fax, email, EDI, etc.).
- Automatically extracts and validates critical information from the customer order before sending it through to your workflow and ERP systems.
Benefits of Accounts Receivable Automation
The benefits of accounts receivable software are many and varied:
Increase process visibility
The solution gives you the tools to instantly view accounts receivable specialist workloads and gives managers better insight into balancing them. With visibility into the time spent processing orders and payments, you can make changes to your department for better use of employee labor.
Improve customer service
You’ll be able to resolve customer disputes faster by having instant access to documents such as invoices and orders. The software captures invoices from your accounting system and stores all related documents such as proof of delivery statements. You’ll be able to quickly and easily help customers see discrepancies and understand where issues arise.
Speed up payment processing
With orders processed more quickly, you’ll free your staff from performing tedious work on purchase orders and potentially making – and correcting – mistakes. When payments arrive at your organization, accounts receivable software will capture, identify, and extract data from documents. It reconciles payments with open invoices, balances remittance totals against check amounts, and automatically updates your accounting systems.
Leverage credit memo processing
Within accounts receivable automation is credit memo processing, which corrects errors made in invoices that have already been sent to customers. The solution eliminates the tedious data entry required in this previously manual process. It incorporates eForm, imaging, workflow, and ERP integration to capture, process, and output credit memos to customers. You’ll be able to more efficiently handle issues including overcharges, incomplete shipments, wrong items shipped, and goods rejected or returned.
Overall, accounts receivable automation will not just allow your employees to spend their valuable time on more important work rather than tedious labor, but it will give you fresh insight into the financial health of your company. You’ll be able to make smarter decisions about cash flow and enhance your investment in your ERP. If you think accounts receivable automation could improve your business, contact All Star Software Solutions today. We’ve got experts on the line ready to help your business discover the benefits of this powerful solution.