Cash is at the heart and soul of all businesses. Organisations cannot afford for there to be long intervals between the delivery of goods and services, and the payments being received for these. As such, organisations are constantly trying to reduce Debtor Days (alternatively known as Days Sales Outstanding - DSO) – a measure of how many days, on average, it takes a business to collect the money that it is owed from a sale. However, this is easier said than done. It takes more than just the will of customers to settle debts for this to be achieved.  

There are many components that must be considered when it comes to the invoicing process. For example, there is the potential for delays and inefficiencies to take place at any stage of the process, leading to frustration and falls in customer satisfaction levels.

 

Time-consuming manual processes

Manual ways of working can be time-consuming, with teams spending hours tracking answers, following up with customers and attempting to keep records accurate and up to date. Additionally, siloed systems magnify the issues with having no ‘single truth.’ Further to this, if customers cannot make payments, or they are not billed in a way that suits them, and if it is not obvious to customers what the status of their account is, then there is the possibility that customers will take their business elsewhere. 

What’s more, the dependence on outdated, antiquated legacy systems that are unable to connect to one another can lead to substandard levels of cashflow.

For some organisations, it can be difficult to imagine what a new solution would look like when an existing legacy system is already in place, especially when software – such as customer relationship management (CRM) and enterprise resource planning (ERP) – already play their part in the existing system. Nevertheless, a single AR management platform is capable of integrating with ERP, CRM, accounting, and billing systems in order to improve reporting, reduce manual data entry and increase cashflow

 

Cashflow can be increased by automating Accounts Receivable (AR) processes

Automating the entire invoicing function can prevent time being wasted, as would be the case if this was done manually. A single AR management system has the capabilities to pull together all information and datasets into one place, while it can also enable coherent and timely customer communications, in addition to automating manual tasks. Customers are also able to self-serve through 24/7 access to invoices, as well as having the capacity to make payments through a portal. By deploying a centralised and digital AR process, DSO can be reduced, thus increasing cashflow.

Reducing the time required for customers to receive accurate invoices, streamlining payments, and cutting down inquiries and follow-ups, all contribute to increasing a businesses cashflow. Adding to this, improvements to data insights and visibility across accounts provides a complete overview of AR wellbeing, meaning that developing non-payment risks can be identified before they become a major problem. This allows attention to be paid to those accounts whose payments should be prioritised.

By choosing the right solution, the limitations of manual processes are a thing of the past. Organisational efficiency increases, customer satisfaction levels improve, and Debtor Days figures fall. A single, centralised system gives a complete overview of the entire business, including cashflow and invoicing status, in addition to a digital record of communications. This helps to provide insight into payer behaviour and the impact that this has on cashflow, while it also enables historical invoices to be located with ease.

To find out more information about increasing cashflow with automation, take a look at YayPay, an automated AR management platform.

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