The benefits of accounts receivable – 5 reasons why you need to automate
The accounts receivable process is vital for any business. Issuing invoices and billing customers promptly after completing work is essential for maintaining a steady cash flow. Inefficiencies in your accounts receivable processes can have a severe negative impact on your finances and operational agility.
By automating your accounts receivable, you can reduce your operational costs while improving efficiency and creating a much more reliable process for getting paid. Below are five key benefits of introducing automation to your accounts receivable process.
1. Improve operational efficiency
Invoice generation and processing can be a complex process for some businesses, with multiple steps and sign-offs required to create and issue the invoice. Once generated, invoices need to be sent to the appropriate customer, who then needs to process it on their end before paying. Ideally, this process would be completed in a matter of hours, but it often takes days. Automating your accounts receivable reduces the number of steps involved and enables you to complete them faster.
Not only will automation improve the speed your accounts receivable are processed at, but it will also reduce the scope for human error and lead to much more reliable accounting. You won’t need to wait around for invoices to be manually approved; you can be certain that your accounts receivable automation software is filling in the necessary details correctly without any human intervention.
By automating the accounts receivable process, you free up precious time and resources that can be deployed more effectively elsewhere. Creating and distributing invoices is a necessary process for any business, but you don’t want it to take up more time than necessary.
2. Streamline invoice creation and get paid faster
Once you’ve completed work for a client, you will want to get paid as soon as possible. Delays in the payment process can have knock-on effects for the rest of your business and operations, so getting paid promptly is important. Any slowdowns in creating or processing invoices will mean you need to wait longer to receive payment for any work you’ve done. Our award-winning Spindle Document Management software makes it easy to generate paperwork and distribute it to recipients automatically. Whether you’re creating documents from scratch or generating them automatically, having the right software solution available to manage and distribute them is essential.
Manually produced invoices are prone to errors. All it takes is one incorrect digit, and suddenly invoices can’t be processed until they’ve been corrected. Every error adds time to the process and delays the point at which you receive payment for the work you’ve done. Data entry errors and organisational issues are common causes of delays in invoice processing. Automating the accounts receivable process reduces the error rate and ensures you’re paid as quickly as possible.
3. Reduce your costs
One of the most compelling reasons for businesses to automate some or all of their operations is the potential cost savings. In today’s hyper-competitive business environment, businesses need every advantage they can get to survive and excel beyond their competitors. Consumers have higher demands than ever before and more choice than ever about which businesses they turn to in order to meet those demands. Any business that wants to remain competitive needs to eliminate inefficiencies and reduce unnecessary expenditure.
Manually generating and processing invoices is much more costly than producing them automatically. Not only is the manual way more expensive, but it also takes up more employee time than overseeing an automated process. With the right automation software on your side, you can significantly reduce the amount of time you spend on your accounts receivable, and therefore minimise your administration costs.
As a business grows, getting paid often becomes more expensive as administration costs rise. Automating processes like the accounts receivable enables businesses to minimise these costs, whether they’re just starting out or they’ve grown into a large corporation.
4. Improve your customer experience
The easier you make it for your customers to pay you once work is completed, the faster they will do so. A long and convoluted payments process will only harm your business and put customers off using you in the future. Providing accurate invoices as promptly as possible after delivering work to customers enables them to stay on top of their own accounting and positions your business as a reliable partner, not just a service provider. Delivering accurate invoices in a timely manner is an important component of an overall strategy for encouraging clear communications with your clients. Customers place enormous value in businesses that are upfront, honest, and easy to work with.
By automating your accounts receivable, you enable a consistent timeline from the delivery of services to the collection of payment. Your customers will appreciate consistency and reliability, both of which are easier with automation.
5. Improve employee retention
As your business grows and your operations become more complex, your finance team will come to play an increasingly critical role in keeping the ship afloat. As with any employees, the more they enjoy their job, the more likely they will stick with your business for the long run.
While your business is still relatively small, you will likely handle most of the accounting work yourself. However, as your business grows and you start handling more accounts, managing everything manually becomes significantly more challenging. Bringing in dedicated accounting staff is a smart and necessary move. But if they are over-worked and stressed out because you aren’t providing them with the tools they need to do their jobs, your accountants will never produce the kind of results you’re hoping for.
Automation means you need to hire less staff and that those you do hire have a much more positive experience working for you. As a result, they will stay with your business for longer.
Ready to enjoy the benefits of accounts receivable automation?
Automation is a powerful tool with the potential to transform the way that businesses operate. By introducing automation to your accounts receivable process, you enable your business to reduce administration costs while improving the accuracy and speed with which you generate invoices.