A recent survey by ZenCash found among companies with annual revenues between $5-$50 million, 37% spent between 41-160 hours per month dealing with unpaid invoices. Clearly, companies are struggling to manage the burden of manual collections processes.
Fortunately, a digital transformation towards accounts receivable automation can solve this challenge and many others. Let’s review a few essential steps for digitizing your collections process quickly and effectively.
Why Pursue Automation?
As many accounting professionals already know, a digital transformation using A/R automation refers to adopting technologies that improve collections processes and performance.
You’ve likely noticed several accounts receivable challenges cropping up repeatedly, possibly related to data entry errors, poor forecasting ability, or excessive time spent on manual tasks.
Accounts receivable automation acts as the perfect solution to these challenges. Putting a solution in place might be easier than you think.
Steps for Accounts Receivable Process Automation
To begin, take stock of your current collections process and the accounts receivable challenges most likely slowing things down. The common culprits are usually:
- Failure to send invoices, reminders, or dunning emails consistently or on time
- Lack of transparency in invoicing across teams/departments
- Limited resources for managing client communications and invoices
- Poor access to essential invoicing and customer data
- Poor communication with clients about payment expectations
Most companies considering A/R invoice automation will likely experience one or more of these issues throughout their transformation. Your accounting software integration vendor can provide insight on which solutions will most move the needle for these problems, so make sure you have your “wish list” ready before proceeding.
Collect and Organize Customer Data
Your next step is to streamline and centralize all data into a single platform. Ideally, you’ll find automated accounts receivable software that easily integrates with your existing systems, ERP, and other backend office functions to minimize disruptions throughout the process.
You’ll need to aggregate data from various sources, documents, and spreadsheets throughout this process, so make sure you allow enough time.
Select a software integration partner that will actually enable your automation of accounts receivable. You can make this easier on yourself by shortlisting candidates that offer quick onboarding processes that make integrations simple.
For example, our platform at Gaviti can be integrated with any ERP by accessing your aging data report. We welcome clients to book a demo of the platform before committing.
Start Deploying Automated Features
Once you’ve selected and integrated an A/R collections automation platform, you can set up features that ease your daily workflow challenges. Start by creating communication templates that can be used by your team and establish alerts and notifications for contacting clients. Leverage the data of your aging reports here and filter/segment data to determine which accounts need the most attention.
These steps form the foundation for accounts receivable collections automation, and everyone on your team will start seeing benefits immediately:
- Better communication (internally and with clients)
- Better customer experiences through more segmented, personalized outreach
- Improved DSO metrics
- Reduced hours on manual collections
- Streamlined invoicing and collections across the board
Build Better A/R Processes for Current and Future Goals
Remember, your digital transformation is about more than A/R invoice automation. It’s about creating a collections system that simplifies the entire process by establishing a single source of truth that provides accessible and error-free data.Learn more about the benefits of accounts receivable process automation by contacting our team at Gaviti. Aside from our industry-leading A/R automation solution, our team boasts years of accounting software industry experience and can help your organization create an automation solution perfect for achieving your long-term goals.