Automation in Accounts Receivable (AR) – Why Now?
After one year of pandemic-related economic slowdowns and other disruptions, many businesses are suffering notably from cash flow issues. Businesses have closed in record numbers; others are just getting by. The necessity for remote work has also disrupted routine work and progress in all areas – but especially impacts the processes around accounts receivable at many companies. Automation of accounts receivable (AR) processes - now more than ever - can help with cash flow as well as providing other benefits for customers and staff.
A study by U.S. Bank showed that 82% of businesses failed because of poor management of cash flow. In the same article in Entrepreneur, 3 out of 10 suggestions for improving cash flow involve automation: of management of aging accounts, collections, and tracking overall accounts receivable.
This past year has been overwhelming for everyone in terms of working remotely – and any aspect of managing accounts receivable that involves physical artifacts needs to have staff on site, or a complex solution involving contactless delivery so that invoices can be processed. As soon as an invoice is digital and entered into an online system that allows remote access, work can proceed from anywhere. Automated payments provide increased efficiencies for both buyer and seller – and keeping track of payments is in real-time, rather than aggregated over some past period.
Let’s look a little closer at the benefits of automation. First, the savings in time and money: automated processes can be completed in a fraction of the time it would take a person to physically process an invoice. And the savings in labor, ink, postage, paper, and service fees can really add up – as those costs are not even a factor when you are communicating with your customers online via email, for example.
Your relationship with your customers is so important. Emails with a Pay Now button are not only efficient, but customers say those types of reminders are more useful, while phone calls and other more personal reminders can be viewed negatively.
The easier it is for your customers to pay online and accept electronic payments, the faster your accounts receivable can move to cash for your business. When information about accounts are available to your AR staff, they can more easily prioritize the accounts that matter to your bottom line. AR automation also increases the insight into your business and its cash flow component – the more data you have online, the better able you are to analyze it and make decisions, especially in the area of payments and collections.
In addition to the many benefits to your customers and your business, the improvements to cash flow from automation of AR processes may prove to be the positive impact that will aid in the post-pandemic economic recovery.
Curious about AR Automation and how to choose what is right for your business?
Register for free to join us for AR Automation Day on April 8, 2021 at 11 AM Eastern for a 2-hour content "binge" designed to accelerate your AR Automation decisions featuring:
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