Automation is the number-one tool businesses of all industries use to achieve higher levels of efficiency. Accounting is no exception. Automated accounts receivable has revolutionized the way AR teams track and boost payment rates.
Is it time your company invested in AR automation? Consider the benefits before deciding.
What Is Accounts Receivable Automation Software?
Accounts receivable software leverages artificial intelligence (AI) technology to help businesses improve their accounts receivables processes. Some of these processes include invoicing customers and submitting notices regarding overdue payments. In its simplest form, AR automation streamlines the process of improving cash flow by reducing payments and debts owed to the business.
What Are the 3 Main Accounts Receivable Automation Benefits?
Before you invest in any kind of technology, you first need to estimate the ROI for your business. To determine this for AR software, you’ll need to take a close look at the benefits.
1. AR Software Reduces Time for Collections Teams
Most companies, even large enterprises have small accounts receivable teams. These employees often manage anywhere from dozens to thousands of accounts with outstanding balances. Traditionally, AR professionals relied on Excel spreadsheets to track invoices and prompt payments, but this is an inefficient and often inaccurate way to boost cash flow.
Improving time efficiency for your accounts receivable teams frees them to handle more challenging cases that require human intellect and creativity. These are some of the ways AR software eliminates tedious tasks and improves accuracy:
- Automates workflows and email strategies using templates and pre-set deadlines
- Eliminates data silos by placing all customer data in one centralized platform that authorized persons can access
- Provides real-time information in the form of reports, alerts and notifications to keep the team on track
2. AR Software Provides a Cost-Effective Cash Flow Solution
One of the most expensive ways to improve cash flow is to borrow money. This almost always involves paying interest. There are also several other costly methods companies turn to, in an attempt to boost payment, such as offering incredibly large discounts.
Investing in accounts receivable process automation costs a lot less. Once it is installed and onboarded, AR teams use the software to strategize an automated collections process. This results in fewer invoices falling through the cracks and a well-timed communication strategy that prompts payment.
3. AR Software Makes It Easier To Predict Cash Flow Trends
Actual cash flow is important, but so is the ability to predict it. Business decisions often need to be made anywhere from days to even months in advance. Managers cannot make informed decisions about future expenditures without knowing how much money they will have available.
Cash flow projection is also crucial for attracting investors. Before they pump money into the business, they want reassurance they will get their money back. The cash flow of a business signals ongoing health and the ability to repay debts or pay dividends.
Cash flow is more an art than a science, but automating the process provides the most accurate estimate. Managers can then receive alerts when new data changes the predicted cash flow amount for a specific period.
Why Should You Adopt an Accounts Receivable Automation Solution?
As a small business owner, you likely have a long list of improvements you want to make to your business. Even though you understand the benefits of automation, you might want to know why you should prioritize this above other improvements. In fact, if it comes down to automation of AR functions versus automating something else, why should you choose Gaviti or another AR software solution?
The answer is simple. Healthy cash flow is the lifeline of your business. It’s the difference between meeting your financial obligations and failing to do so. Some of these can have legal consequences for the business, such as not meeting payroll. Other failures might add financial and operational costs to the business, such as the inability to pay the electric bill at a factory.
Gaviti can reduce your overdue invoices by 60% and improve your DSO by 30%. This could open a world of opportunities and a new era of financial stability for your business. But why take our word for it?
Book a free demo to try it for yourself.