Top 11 Benefits of Accounts Receivable Automation

Since all your collection data is gathered in one tool, you can find the information you need, when you need it. The first advantage of using automation for your accounts receivable is that you always know where you stand. Accounts Receivable automation supports your AR and has many key benefits, automating your most repetitive tasks and ensuring you have all the info you need at your fingertips. Like a well-oiled machine, your AR team partnered with automation in their processes can run smoothly together. Tasks are handled the same across the board, which leads to less confusion and more method that works for everyone’s benefit.

Progress Billing- Under this billing technique, invoices are created concurrently with expenditures incurred on a regular, monthly, or bimonthly. We’ve designed Upflow to help you better manage your AR, which in turn increases your cash flow and long-term growth. Instead of jumping head first into choosing an AR software (which we’ll cover later), let’s take a moment to review how to automate your process in the first place. Since you get paid faster, you can use your working capital for your payables – paying your own providers.

Automation helps you free up your time to focus more on higher value-added tasks. RELEVANT REPORTING – Your accounts receivable team often must provide insights to colleagues outside of the accounting department, which is why automation reporting is so helpful. The AR team can easily and quickly set filters for ad-hoc reporting and export required data to a variety of formats including Microsoft Office Excel spreadsheets. That’s why Esker Synergy acts behind the scenes to empower every user while improving the end-to-end CX.

Enhancing reporting.

Below are some of the best practices and strategies for successfully collecting accounts receivable. It’s important for any business owner to stay organized and up-to-date on the status of each customer’s account. This way, they can keep an accurate record of the money owed and develop effective collection strategies.

  • Automatically identify intercompany exceptions and underlying transactions causing out-of-balances with rules-based solutions to resolve discrepancies quickly.
  • Powerful APIs allow ingesting, classifying, and pre-processing of any document ranging from PDF, Excel, JPG, and more with more than 99% accuracy.
  • Improve the prioritization of customer calls, reduce days sales outstanding, and watch productivity rise with more dynamic, accurate, and smarter collection management processes.
  • Instead, focus on small projects that allow for fast tests and shorter feedback cycles.
  • By automating your entire accounts receivable process, from credit management to invoicing and reconciliation, you optimize every step which results in improved cash flow by bringing money into your organization faster.

Automatically create, populate, and post journals to your ERP based on your rules. I’m an entrepreneurial CPA that founded Xen Accounting, a
100% cloud-based accounting firm, in 2013. Following its acquisition in 2018,
I started Future Firm to help accountants fast-track the growth of a modern, scalable accounting firm of their own. If you do offer this service, it’s a good idea to build out your service terms and include them in your engagement letter. Not to mention, when you surround your client with more services like AR automation, it becomes harder to leave you as well. This process massively speeds up the payment schedule and takes up less mental space than having to remember who owes.

Q9 – Can you easily follow up with late payments?

Instead, focus on small projects that allow for fast tests and shorter feedback cycles. As per a 2022 survey, accounts receivable (AR) teams in over 15 industries reported getting paid more than 90 days late in the Q3 of 2022. Some software restrict the number of users that have access, but we believe in fostering collaboration to make your collections management what is public accounting more efficient across the whole company. Some can automate all your processes, but with minimal flexibility for customization. So if you want to personalize your email reminders, or apply a discount rate on invoices paid early, it won’t be possible. The system sends a late notice email to the client, which includes a copy of the open invoice.

Energize your accounting team by creating capacity with automation. Perform pre-consolidation, group-level analysis in real-time with efficient, end-to-end transparency and traceability. Reduce risk and save time by automating workflows to provide more timely insights.

What is accounts receivable automation?

As the system continues tracking the invoice’s age, additional automatic notices can be sent as each new late milestone arises. BlackLine Magazine provides daily updates on everything from companies that have transformed F&A to new regulations that are coming to disrupt your day, week, and month. Finance and IT leaders share a common goal of equipping their organizations with ways to work smarter to enable competitive advantage.

Challenges With Manually Accounting for AR

The integration between ERP and accounting systems, through to the EIPP layer which produces, delivers, tracks and accepts payment, requires expert handling to ensure every nuance of account-specific requirements is automated perfectly. If you’re looking to leverage the benefits of accounts receivable automation, sign up for a free Docsumo trial. Considering all financial documents and invoices are stored in a centralized repository on Docsumo, the accounts team can access and review this information quickly. In addition, pulling invoices, bank statements, and purchase order becomes easy. Although the phrases data protection and privacy are sometimes used interchangeably, there is a significant distinction between the two. Data privacy determines who has access to data, whereas data protection offers methods and rules to limit data access.

Manual accounts payable processes are error-prone and hardly leave the accounts receivable team any time to focus on value-driven data analysis. Because it’s all automated, you also reduce the risk of human error – and when you compute your AR using manual processes, mistakes are bound to happen. Different AR automation tools offer different features with varying levels of automation. Software like Upflow helps you manage your accounts receivable process from A to Z, reducing the time you spend on it.

Improve Your Customer Experience.

And businesses that invest in accounts receivable automation software get paid faster, too. Paystand customers can see up to a 60% decrease in DSO and improve cash flow bottlenecks in the AP processes. An EIPP platform also enables your customers to self-service as well as providing a range of payment options such as faster payments, ACH, credit cards and all forms of online payment.

By now your imagination may be running at full speed, thinking about all the ways your business and teams can improve upon your current accounts receivable processes. There are indeed many benefits that automation can bring to your AR process. Some AR automation tools do more, like reconcile the transaction with your accounting ledger tool along with a variety of other things to eliminate manual processes and better help accept payments. Automating accounts receivable creates a streamlined, centralized system for managing customer invoices and payments. Invoice notifications are sent to customers automatically, so you don’t have to manually remind them.

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments. AR Automation goes hand-in-hand with e-invoicing, using a platform such as Corcentric EIPP.