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Like any good business owner, you want the best processes with the most efficient results for the least expense. You need your systems to be easy, efficient and comprehensive. One place to start is with automation of your Accounts Receivable workflow. Some simple steps can give you great results. Here are three major benefits of A/R automation:
It’s Automatic. As the term automation suggests, it’s something you set up and then let run by itself. With a great A/R system, you electronically send your invoice as soon as it’s created.
Before we started using email for everything, remember when you received bills in the mail? Many of them would include an envelope for you to use to send your check back. Even smarter companies would include the postage for you. In those days, studies proved that companies who provided the envelope were paid more quickly than those who did not. Let’s apply that logic to the 21st century. Put a “Pay” link on your electronic invoice so that your customer has to do nothing more strenuous than clicking a link to securely enter bank or credit card information. The results prove it. Your customers will pay you much more quickly if you make it easy for them.
Next, set up automatic reminders. We all have those days when the Inbox gets out of control. Your customer may have had the best intentions of clicking that payment link right away, but things happened, and before you know it, your email isn’t even on the first page any more. A friendly reminder puts you back at the top of the list.
Then, don’t forget to create another great way to “touch” your customers. Send a thank you email. Not only does it let them know you appreciate their business, it also confirms for them that the payment was received.
A great system gives you the ability to set all these preferences. You never have to worry about it again, trusting that the system is sending and receiving as you directed.
It Saves Time and Money. As we all know, Time and Money are the same thing. One creates the other. It is the most basic math – if your employee spends less time collecting Accounts Receivable, you will spend less money for that job. Now your employee is free to do other things, maybe even things that make other processes easier too.
A good automated system can be set up to produce a variety of reports. How many invoices are past due? How many were paid today? How many have not even been seen yet? Your automated system can track when an invoice was opened, how many times, and who looked at it. No more calling to ask if the invoice was received. No more sifting through aging reports to look for the ones that need the most attention. Not only will your past due lists be shorter, they will have more comprehensive information.
Do you want to spend your time chasing unpaid invoices? Of course not. Your time is much more valuable. Using a time-saving app can free you for other things.
It Gives You Better Control. How many businesses do you know that are at the mercy of their Cash Flow? Especially if you are on a very tight margin, you can’t pay your Vendors until your Customers pay you. Automating your A/R has proven results of increasing cash flow and reducing DSO. (Days Sales Outstanding).
Customizable reports give you exactly the picture you want to see. Determine how you want to measure collections, and then set the report to give you that. Don’t just hope you’re in control of your receivables, be in control. Any good Accounts Receivable system will have a robust list of reports, all of which you can tweak for your specific needs.
Who is involved in your A/R process. You? Your A/R team? Your Sales Reps? Your Cash Manager? With all of the appropriate staff members having easy access to this customized program, there are no mysteries. Reps don’t have to wait for the A/R clerk to print out reports and send them call lists. Everything is available to everyone who needs it, when they need it. You can’t ask for better control than that.
These three great benefits of automating your A/R process are well worth your investment in a system. But there’s an extra bonus with a value that can’t be measured. You will have better communication with your customers. In our world today, many of us do business with people we’ve never even met. An A/R app gives you the opportunity to engage with your customers on different levels. Which is better? A friendly email with an efficient process, or just another envelope in a pile of letters? Give it a try. Both you and your customers will benefit.