Since the start of the COVID-19 pandemic, businesses that were reliant on manual accounts receivable (AR) processes have suffered the most. The fact that offices around the world were closed meant that AR teams were unable to conduct their daily processes, while the lack of automated, cloud-based tools denoted that AR and data processes could only take place on-site. Organisations that used partial automation suffered, but to a lesser extent.
According to research conducted by YayPay, there are a number of alarming statistics that have emerged in the past year:
- 44 percent of businesses have struggled with collections
- Payment deferrals are up 22 percent
- Payment in full is down 13 percent
- Days Sales Outstanding (DSO) has increased from 39 to 43 days
If these statistics infer anything, it is that businesses must be able to respond to evolving market conditions and events. This is incredibly challenging if an organisation uses manual AR processes, as there is the potential for delays and inefficiencies to rear their head at any stage of the process, leading to frustration as well as a drop in customer and employee satisfaction levels.
How automation can help
Automation can be a daunting prospect for many businesses, but it is essential as we navigate the COVID-19 pandemic and for the long-term health of your organisation. Indeed, automating AR processes can improve a number of functions within a company, including:
- Increase cashflow
One benefit of automation is that it can increase cashflow. By automating all of the invoicing function, the time drain of manual processes is a thing of the past. A single, centralised, automated AR management platform is capable of compiling datasets and pieces of information into one place, as well as enabling timely and coherent customer communications. This is done by reducing the time needed for customers to receive accurate invoices, reducing inquiries and follow-ups, and streamlining payments. Overall, this can lead to a reduction in DSO and, in turn, an increase in an organisations cashflow.
- Improving insight
Moreover, automating AR processes gives organisations a complete overview of their entire business, improving visibility into cashflow and invoicing status. This helps businesses gain an insight into payer behaviour and the potential impact this has on cashflow, while at the same time enabling historical invoices to be easily located. When it comes to predicting payer behaviour, potential non-payment risks can be identified before they become a problem. That way, organisations can focus on those accounts where collections should be prioritised, thus preventing cashflow from decreasing.
- Enhance customer interaction
For customers to receive the best AR experience possible, organisations must move to an automated AR process. Through automation, it ensures that customers’ demands for digital ways of doing business are being met. For example, if customer invoices are usually sent out manually, this process can be automated in order to reduce the risk of potential errors.
Moreover, phone calls to customers can also be replaced with alternative automated forms of communication. This avoids unnecessary back and forth contact, ultimately increasing efficiency and saving time for both the customer and the business. As well as this, businesses can provide customers with a system that allows them to make payments through a portal. This allows users to serve themselves through 24/7 access to invoices and enables them to keep track of their payments.
- Better accuracy and predictability
Automating the AR process can also improve employee satisfaction levels. Manual ways of working can be time-consuming and provide limited insights from data. Employees waste large amounts of time trying to keep track of records, ensuring that they are correct and up to date, in addition to having to follow up with customers. The good news is that all of this can be automated.
An automated AR process provides employees with fully customisable dashboards that allow them to keep track of invoices in addition to payment tracking, allowing them to meet customer’s requirements and requests. Adding to this, it supports agile operations and flexible ways of working as it enables employees to check the status of invoices and manage AR from any location, be it in the office or at home. By automating AR processes, employee satisfaction levels increase, as they are no longer wasting valuable time chasing customers and keeping records up to date, with these tasks now being done automatically.
Ultimately, transitioning from manual, antiquated AR processes to automated AR systems can help a business to increase its efficiency and cashflow, as well as to improve employee experience and customer satisfaction. This makes the limitations of manual processes a thing of the past. To find out more information about how automation can help your business, take a look at YayPay by Quadient, an automated AR management platform.