Technology is a competitive industry that produces several options for even the most niche markets. AR automated solutions are no exception. Each A/R tool brings different strengths to the table that companies must review carefully. Doing so ensures that you choose the AR collections tool that best serves the needs of your business. Use these top six considerations as your starting point.
1. Tech Stack and Integration
Finding the right technology that integrates with your workflows and existing ERP should rank high on your list. Otherwise, you could end up with a bigger change management challenge than you originally planned to handle.
These are some of the top questions you should tackle:
- How easily can the new tool talk to your existing tech ecosystem?
- Does the AR collection solution integrate well with your ERP?
- How will it take you to complete the integration process?
- Does your tech hardware meet the minimum requirements?
- Is the software compatible with your operating system?
2. Processes To Automate
When determining what to automate, you will find a visual representation of your work processes helpful. Create a flow chart and use it to identify potential bottlenecks or tasks that absorb too many labor hours. Instead of tackling it all at once, identify what to automate first and then work your way down your list of priorities.
Next, determine how much of each process to automate. Full automation, for example, could almost eliminate your A/R team. Is this your goal or do you intend to eradicate tedious parts of tasks so that your team can focus on more value-adding aspects of operations?
3. Secure Payments
In 2019, 81% of businesses experienced some degree of payment fraud. Cybersecurity has only continued to grow in importance since then. Consequently, companies need to ensure encrypted gateways for customers to make payments and feel confident in the protection of their personal and business data.
An effective AR collections tool provides secure portals that allow customers to take control of the payment process. They can use these portals to track invoices, make payments, and query discrepancies. On the receiving end, the company should provide tiered access and individual log-ins to ensure that people only access data they have the authorization to view and handle.
While automation tools provide excellent opportunities to boost security, they should not exist in a vacuum. Companies should pair these with comprehensive cybersecurity strategies.
4. Compliance and Standardization
Good AR automation solutions standardize all processes and communications. Configure the system to ensure all standardized processes comply with business regulations. This task requires liaising with several departments inside the business, such as the legal, finance, and sales teams. Regardless of industry and business location, compliance with ISO-27701 certifications is standard.
That said, some A/R automation vendors are more compatible with some industries and types of businesses than others. Do some research to determine what industries the business seems to focus on or what industries tend to gravitate to the company more.
5. Customer Experience
Customer portals do more than offer security. They also improve the customer experience by providing control and reducing frictions associated with payment and invoice management. The fewer times your customers need to send emails and make phone calls to resolve issues, the more likely they are to remain with your company.
An effective AR collection solution typically also provides flexible payment options. This relates to not just available methods but the ability to make multiple installment payments during tough times. Coupled with effective communication, opportunities like these can do wonders to reduce attrition and ensure on-time payments.
6. Key Performance Indicators To Track
Hundreds of KPIs are available, and even the most popular options add up to dozens. Your team will need to look at its existing measurements and the ones offered by the system and narrow down its options:
- Bird’s Eye View: Include metrics that paint a broader picture of business performance. Some common choices that fall under this category include DSO, number of late payees, and bad debt to sales ratio.
- Narrow Focus: Your bird’s eye view might indicate patterns you need to investigate more closely. For example, if you notice a bad debt problem, look closely at your accounts receivables aging reports.
- Risks and Forecasting: Artificial intelligence can spot patterns early and deliver warning signs before your team notices something is awry. Automatic updates to calculations also ensure your managers have the most accurate information to make decisions.
The Bottom Line
Cost plays a crucial role in the final decision when considering an AR collections solution. Price is important, but don’t let that become your only focus. Instead, consider all aspects of each before making your final decision. The right solution will save you time and money in the long run while also ticking the boxes on your criteria list.
Gaviti has accomplished this and so much more for our clients. Book your demo to get started.