Top 13 Benefits of Accounts Receivable automation

Alexandre Savio

We discussed before what is Accounts Receivable automation and how it can help your business. In this article, we will present our top 14 benefits of AR automation.

1. More efficient

Automation increases the speed and efficiency of the AR team. Staff can generate invoices at a much faster rate than manually using digital templates. Moreover online delivery allows for quicker receipt of invoices by customers. This accelerated invoicing process allows for earlier initiation of payment terms. Also, it can facilitate the rapid and accurate calculation of even more complex billing schemes, such as consumption-based billing.

2. Less errors

The manual generation of invoices is a tedious, repetitive process that is prone to errors: omissions, transpositions, duplications, and typos. AR automation, however, can significantly reduce the number of mistakes made through the use of integrated databases that automatically populate customer data and product details, as well as automated matching that connects customer purchase orders to shipping details and invoices. Automation also cuts down on the time and labor required to correct errors and can eliminate the need for potentially embarrassing and time-consuming interactions with customers to resolve issues.

3. Lower labor intensity

AR automation can help decrease costs in various ways. For instance, the increased productivity brought about by automation can reduce the amount of staff time required for tasks such as data processing, allowing staff to focus on higher-value activities such as addressing and resolving exceptions. It may even be possible to decrease the size of the team. Moreover, AR automation can lower the rate of uncollectible accounts because invoices are more accurate and can be sent to customers more quickly. When paired with effective management tools like dashboards and real-time AR aging reports, customer accounts can be more closely monitored, further reducing bad debt.

4. Lower DSO

AR automation can help to decrease the number of days it takes for a sale to be paid, known as days sales outstanding (DSO). It can enhance a company's ability to predict future cash flows due to more dependable and consistent collection patterns, which can be monitored through enhanced reporting using real-time data.

5. Analytics

AR dashboards offer easy-to-understand data that can be customized to support day-to-day tasks or high-level decision-making, depending on the user's role. Customer-specific information, including real-time aging reports and customer master files, can be accessed at both summary and detailed levels. Dashboards also display key performance indicators like AR turnover and DSO, as well as AR department activity like processing output, payment collection, and error rate. The automated AR system becomes a single, reliable source of information that no manual process can match with ad hoc spreadsheets and reporting.

6. Security

Automation can bolster the security of the AR process, particularly when it comes to sensitive customer data and payment processing. Automated AR removes manual processes like email and paper files, which are particularly susceptible to security breaches and fraud. As many AR teams have transitioned to a distributed work environment, it has become increasingly important to be able to access and store AR and payment records in a secure environment.

7. More effective

Reducing a company's DSO can lead to increased cash flow and fewer write-offs for bad debt. AR automation can help organizations achieve these goals by enabling them to send more accurate and timely invoices to customers in larger volumes. AR automation systems also allow organizations to tailor invoices with information that makes it easier for customers to verify their purchases, such as purchase order data, itemization, project codes, and delivery information. Invoice consolidation can also increase the likelihood that customers will quickly approve invoices and submit payment. On top of that, automated AR can send proactive payment reminders and dunning notices on a regular basis, keeping payment at the forefront of customers' minds and accelerating cash flow.

8. Happier customers

The AR process, which impacts the customer, must be timely, accurate, and professional, from invoicing to collections. It is also essential to make the payment process as convenient and straightforward as possible, reducing processing costs for customers' accounts payable teams. AR automation can help organizations achieve these goals, building customer trust and reducing uncomfortable disputes.

9. More centralized

AR automation can provide a single source of truth for all AR data, including customer information, payment history, and invoice details. This can help organizations gain a better understanding of their customers' payment habits and improve their ability to predict future cash flows. Thanks to that, AR automation can help organizations identify and resolve issues before they become problems, such as customers who are consistently late with payments or customers who are not paying at all. This can help organizations avoid bad debt and improve their cash flow.

10. Smoother collaboration

AR automation can help organizations improve collaboration between the AR team and other departments, such as sales, finance, and customer service. For instance, sales teams can be informed of customers' past due balances, order fulfillment personnel can be made aware of necessary customer documentation, and business leaders can receive improved insights into current and future cash flow. Furthermore, AR automation can help organizations improve collaboration with their customers by providing them with a convenient, secure, and easy-to-use online portal where they can view invoices, make payments, and access other information.

11. Finer data quality

AR automation can help organizations improve the quality of their data by eliminating manual data entry and reducing the risk of human error. This can help organizations improve the accuracy of their invoices and reduce the likelihood of disputes with customers. In addition, AR automation can help organizations improve the quality of their data by automatically matching invoices to purchase orders, shipping details, and other information.

12. Easier compliance

AR automation can help organizations improve compliance with local regulations by automating processes that are particularly susceptible to human error, such as sales tax calculations and e-billing. Data is automatically archived, securely stored, and organized for auditability, regardless of whether a company operates in one region or multiple jurisdictions with varying regulations.

13. Real-time data

Automation eliminates the complexities of spreadsheets, multiple subsystems, and the possibility of conflicting data that come with manual AR. An automated AR system offers real-time visibility into AR data, including open invoices, closed invoices, aging, payment history, and pending data like unbilled orders. This keeps everyone on the team working with the most current information, which is especially crucial when interacting with customers.

How Tresorbase can help

We can assist finance leaders who are seeking to improve efficiency, productivity, and optimization in their accounts receivable processes.

Tresorbase provides a comprehensive AR solution that fully automates your accounts receivable.

You can create invoices, automatically send them to your customers. Connect your bank accounts and track payments, create dunning workflows to reduce late payments, and also share a customer portal with your customers to allow them to pay online.

And if you are looking for ways to smooth your Sales to Finance motion we integrate with Hubspot and Salesforce. Giving you a fully automated Sales to Cash solution.

Want to learn more? Check our AR Automation product.