3 benefits of digitising accounts receivable processes
In this, the first in a new blog series exploring accounts receivable (AR), we consider the benefits of digitisation. Future blogs will look at how to improve cash flow through AR and how to automate simply.
Accounts receivable (AR) processes must work for both the business issuing invoices and the customers receiving them. Some customers want to receive invoices electronically; others prefer printed documents through the post. The trick is meeting customer preferences while making AR as efficient and productive for the business as possible.
Cash management is vital to all businesses. The processes it relies on must work hard to keep the time between goods or services being provided and payments being received, as short as possible.
Managing AR manually, perhaps through spreadsheets and multiple systems such as enterprise resource planning (ERP) and customer relationship management (CRM), can result in perpetually chasing down answers and status updates. What’s more, an astonishing amount of time can go on chasing up payments, fielding queries and reconciling disputes.
Taking a digital approach
Many businesses and corporate customers are on the same path – they are all undergoing a digital transformation to improve processes, save time, cut costs and enhance their service offering. Customers may already be demanding digital ways of doing business and this may extend to how they are invoiced.
This presents an opportunity for finance departments, and indeed businesses overall, as digitising the entire invoicing function, from creation through distribution and follow-up to payment, offers a range of benefits when customers have chosen electronic billing.
A single AR management platform centralises activities, bringing all information into one place, automating manual tasks and improving customer communications. Customers choosing to engage in the invoicing process electronically can self-serve with convenient access to invoices 24/7, and the capability to make payment through a portal.
All of which can result in reduced days sales outstanding (DSO), improved efficiency and more satisfactory customer interactions.
A range of benefits can result from digitising AR processes including improvements to:
Time spent manually issuing invoices and chasing up payments can be better spent serving customers and growing the business. Invoices can be created, sent and monitored, whether in or out of the office. What’s more, by working from a single data set and by integrating with existing ERP, CRM, accounting and billing systems, the AR platform minimises manual data entry to save time and reduce errors.
A data-rich approach to AR, with visibility across accounts, up-to-date payment status and enhanced analytics help identify potential non-payment risks before they become an issue. Insight into customers’ paying behaviour can point to where more attention may be needed for particular accounts and where collections should be prioritised.
A single, centralised platform provides a complete picture of accounts receivables, invoicing status and payment predictions, together with a digital record of communications. Historical invoices can be swiftly located, and insight is gained into payer behavior and how this impacts cash flow.
Through digitisation, businesses can improve AR efficiency, gain greater insight from AR data and enhance the customer experience. To find out more about digitising AR processes, take a look at YayPay by Quadient, an automated AR management platform.