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What is accounting? Is it simply number-crunching and data entry, or is it strategically thinking about your business’s finances and how to improve them?
According to one survey, accounting teams spend 90% of their time on financial close and only 10% analyzing numbers. By letting technology handle the data input, accounting teams can spend less time crunching numbers and more time analyzing what those numbers actually mean. This can lead to dramatic cash flow improvements for your company.
While the benefits of accounts receivables automation are numerous, it’s not like downloading a new background image for your computer. There are important steps you first need to take in order to prepare your team and your company for A/R automation.
Take a Deep Look into Your Current A/R Workflow
Before you can begin your digital transformation, you need to gain a complete understanding of your current accounts receivable management processes. From there, you can choose a system that best fits your unique needs.
Consider the following questions to help you analyze your current A/R workflow:
What is the current status of your cash flow?
Go beyond “good” or “bad” and think about the specific elements that impact your cash flow. Make a list of areas that need improvement. This will help you choose which automated accounts receivable software is right for you.
How do you send invoices to customers?
The method by which you send invoices can impact how—and if—they are paid, along with the timeliness of payments.
How do you remind customers about late payments?
Staying on top of late payments is essential for keeping your accounts receivable under control. If you are relying on spreadsheets to remind employees to manually send collections emails, your process is taking too much time and effort.
Which payment methods do you accept?
The easier the payment process is, the more likely customers are to pay on time. By restricting customers to certain payment methods, you are forcing them to leave their comfort zone.
What data inputs do you use for billing?
Make a list of all your inputs so you can choose a software that can automate the exact processes you need.
Vet Potential A/R Automation Tools
Once you understand your current A/R workflow, it’s time to start looking at automation tools. When searching for an automation tool, you and your team should:
- Discuss your plan – Talk about the timeline, budget, software requirements, etc. Be as detailed as possible to ensure a smooth transition.
- Involve your team in the decision-making process – You’re not going to be the only one using the new software. Get input from your team as they might offer insights that you haven’t yet considered.
- Request demos – Try demos for the A/R platforms that stood out to you. Check the quality of the software and see how it fits with your business needs.
- Research all available A/R platforms – See what options are available and research costs, budgets, locations, and any other information that might be important to your business. Maintain a list of platforms that are outstanding.
- Review costs – Double- and triple-check the cost of implementation. Your business should flourish from this transition, not crash and burn.
- Set clear goals – The overall goal is to increase cash flow, but in which areas do you need the most help? Are you looking to simplify processes, gain additional insights, or automate tasks? Setting clear, tangible goals will narrow your search to find the automated accounts receivable software that will work best for your business.
Execute and Automate Your Accounts Receivable Process
Once you’ve completed every step and performed the proper research, it’s time to pull the trigger and implement your new A/R automation software.
By leveraging automation in accounts receivable processes, you will be able to reduce the cost of payment processing and prepare invoices at lightning speed. You’ll free your team up to spend more time analyzing financial data and streamlining A/R processes, which leads to accelerated cash flow within your company, something every organization strives for.