This is a question that many businesses continue to ask, what are the benefits of AR automation? The system works; why would we change it? Imagine if you had that attitude toward every risky step you took, that brought you success and profitability.
So, it’s time to shake off the jitters around accounts receivable automation and understand this phenomenon and why you need to embrace it. Automating your accounts receivable process entails that your claims and payments sync via the software, and every outstanding payment is recovered quicker and with fewer violations.
The process of AR automation has provided better functionality and faster revenue generation to companies, according to the statistics presented by Webinar Care that mentions that 80% of business accounting executives believe that automation leads to competitive advantage in business, and 79% believe that it increases the productivity of their company.
How it Used to Be – How it Is Now – Automated Accounts Receivables
“This is the way we have always done it” is perhaps the most dangerous thing you can say about your business operations. Just because you have stuck with a specific way of doing things doesn’t mean there is no room for change and improvement. The most successful businesses are the ones that grow with the changing times, significantly changing technologies and developing new strategies to grow their business.
So, if there was a time that you were handling your accounts receivable through manual bookkeeping, checks, and manual processing that was working for a limited scale of your business if you want to grow your enterprise, the list of consumers and the subsequent accounts receivable will also change and that will require extra fuel to handle. Technology and automation software allow you to shift gears and go into high performance. Here is how your AR process will change with automation:
Your AR Process Before Automation:
- Manual data entry: You had to enter and catalog all payments, invoices, and customer information by hand, which meant there would be some corrections needed.
- Paper-based invoicing: Payments were often printed or prepared physically and sent to the consumers through snail mail, which was time-consuming.
- Inconsistent communication: There were larger delays between communications with clients as they were mostly done through phone or emails, which created communication gaps that led to disputes in claims.
- Limited visibility: With an over-arching system allowing you to view your AR metrics in real-time, there was clarity about how your accounts receivable processes performed.
- Delayed collections: With collections done through snail mail correspondence or dialers, there was a lower potential for collecting accounts due to human errors and inevitable delays in communication.
The AR Automation Benefits:
- Automated data entry: With automation, all your payments, invoices, and customer details are added digitally to reduce errors.
- Electronic invoicing: An eco-friendly way of processing invoices and a clever way to reduce errors in manual invoicing. There is a lower risk of misplaced invoices and faster collection of essential data.
- Automated communication: With electronic and automated correspondence, there are fewer missed connections between collectors and clients. The communication stream is consistent and frequent, so you can follow up on every account quickly.
- Real-time analytics: Automation software can provide quantifiable data in real-time about the number of claims that are processed, and the time taken to process each of them. Automating this process enables faster decision-making against each account.
- Faster collections: One of the most poignant reasons for automating your accounts receivable is to ensure you collect versions faster and more proficiently. With an automated system, each claim is processed more quickly, and with frequent communication and regular updates of the claims’ status, collections will soar.
Top 3 Benefits of Accounts Receivable Automation
You might think the abovementioned changes don’t make a remarkable difference, but they have a far-reaching impact. While there are still companies that have resistance to adopting automation, with 53% of companies still using spreadsheets to manage their accounts receivables, the trend is changing and more people are seeing the value of automation.
There are some ways that you can measure profitability through your accounts receivables, and that will reflect the benefit of adopting automation:
Far-sightedness – Automated risk assessment:
Through automation tools, you can easily integrate with credit reporting agencies, which means you can get regular updates on credit risk assessments, which will help you improve risk management for new and existing customers.
Adaptability – Faster adoption of changing industry trends:
In fast-paced businesses like collections, new interventions, strategies, and practices are coming up regularly. Most automation software can update these changes without delay and quickly provide you with access to best industry practices to develop your approach as you go.
Reliability – improved customer relationships
The accounts you collect are also potential business partners, collaborators, and future clients. Automation maintains a cordial and regulated relationship with them as opposed to third-party collection tactics, enabling your connection to grow beyond creditor and debtor and open doors for future collaborations and better repertoire that positively impacts your business.
Reap the Rewards of Automation in Your Business – Trust Last Demand
Now that you know how your business can grow through automation, you must also understand what automation software you need. Last Demand comes into play here with the best solutions to automating your AR processes with the least friction to your existing internal accounts receivable systems. It integrates well with your business and allows for greater scalability by allowing you to add as many claims and accounts as you like.
Scaling your accounts receivable up and down is ideal for small and mid-sized businesses that may only sometimes have a larger pool of accounts to collect. But with the option to scale the processes with little to no delay, companies can grow quickly and seamlessly with Last Demand. Give your business the boost it deserves by giving it the gift of automation and reaping the benefits!
