Getting paid on time is vital for any business. When done right, managing your accounts receivable (AR) helps you ensure there are no late payments or non-payments. But doing it manually can be time-consuming and prone to errors. Brands today are using automation to speed up sales and protect against credit risks. Automating your AR helps you achieve more efficiency in your payments and reduce payment delays. Research shows that 89% of businesses get paid on time when using AR automation.
What is Accounts Receivable automation?
In simple terms, automating your AR means removing the manual, tedious, and error-prone tasks in your accounts receivable process. End-to-end AR automation involves digitizing invoice processing, tracking and reconciling payments, sending payment reminders, and resolving payment errors.
Why Automate your AR?
Late payments reduce cash flow, create day sales outstanding (DSO), and negatively affect your sales and your ability to pay employees, vendors, and partners. When your systems are not efficient, these delays cause cascading effects, like debt or bankruptcy, in the long run. This is why automating AR becomes critical.
Benefits of automating AR:
- Quicker payments: automating your AR helps you to track payments in real-time and send out automatic reminders to follow-up on late payments. This ensures your payments are always on time.
- Lower costs: automating AR removes manual processes which cost time and money. You can raise, review, and distribute invoices digitally. This helps you send out invoices on time and avoid delays.
- Greater efficiency: AR automation tools generate invoices and credit notes, and send out automatic reminders, thus allowing you to use your resources more efficiently.
- Higher accuracy: removing manual entry ensures your invoices are correct and on time. Automating AR also helps you assess risks accurately and be more responsive to them.
- Improved compliance: Automating AR helps you to protect sensitive payment data from unauthorized access. Also, having all payment data available on a unified dashboard helps you to comply with local laws.
How Accounts Receivable Automation Helps You Avoid Late Payments?
Automating your AR helps to ensure timely payments through:
- Faster Invoicing: Using digital invoices can speed up the payment process. They are error-free and can be raised and automatically sent to your client. You can easily track your payments and outstanding invoices from one dashboard.
- Automated Collections: Automating AR speeds up your collections processes with automated email, letter, and text message. Timely reminders on preferred channels help your clients to pay you easily.
- Streamlined Payments: AR automation helps you streamline your payments and makes all billing-to-payment processes simple and efficient.
How to automate your AR?
- Have a roadmap: Using automation requires a tiered approach. Pinpoint your goals, targets, and timelines and choose an approach that works best for you.
- Work closely with your accounts team: Consult your accounts team to identify common roadblocks and plan out steps to overcome these. Take your team’s input in your decision-making.
- Choose the right partner: Work with a qualified payment service provider that offers end-to-end payment automation. They can help you manage your AR and simplify your invoicing and debt collection.
How can Novalnet Help?
If you’re keen to begin your AR automation process, we can help you in all the right ways. As a global payment service provider, we have extensive experience in helping Europe’s leading brands to process payments. Our technology helps you to accept payments globally in 125+ currencies in 150+ automated country-specific payment methods. Set up your payments within minutes with minimal coding using our instant payment plug-ins. Or use our AI-based risk management solutions and advanced analytics to design the best payment experiences for your customers, all in a fully secure environment.
Reach out to us today to know more.
Well-managed cash flow is vital to a business. The benefits of automating your AR are plenty – whether it be about managing payments or offering the best experience to buyers. Hence, brands need to look for ways to integrate these tools into their business models and stay ahead of the curve.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.