Benefits of AR Automation
AR automation transforms the manual entering of customer data, payment terms, and invoicing requirements into an intuitive software that automatically updates all the details of accounts receivable. An automated AR system allows your accountants to move on from manually entering in customer data, payment terms, and invoicing requirements into a spreadsheet software like excel. The accounts receivable automation software just requires users to enter in the data once and the system manages itself. For example, if your customer is billed at the end of each month, the AR automation software will automatically send an invoice to them every month without any manual labor.
Benefits in summary
- Saves your company time
- Reduce DSO and improve cash flow
- Faster payments from customers
- Greater security
- Increased accuracy
- Better customer relationships
One of the major benefits of moving your manual AR process to a fully automated accounts receivable system is that it saves your company tons of time. By cutting down on the many steps it takes accountants to complete the accounts receivable workflow, your company will save an abundance of time.
Reduced DSO and an improved cash flow is another major benefit of automating your accounts receivable function of the business. Innovative AR software comes packed with an abundance of payment methods for your customers which leads to faster invoice turnaround.
The overall reduction in DSO means that your company is getting paid faster from your customers. Reducing DSO is a necessity when it comes to optimizing profts. High DSOs can lead to doubtful accounts, also known as a doubtful debt, which refers to an account receivable or invoice with the potential to become a bad debt in the future. The faster payments from customers is another major advantage of AR automation and is crucial for reducing DSO and improving cash flow for your company.
AR automation software also comes packed with a high level of security, being that a majority of the AR automation software companies are PCI compliant and practice secure payment processing solutions that integrate with accounting software.
Reducing the manual labor performed by accountants increases the accuracy of the accounts receivable process while also saving an abundance of time. The less manual effort expended on everyday accounts receivable processes the less chance there is for errors.
When the manual labor of the accounts receivable process is reduced and there are less mistakes, customers are bound to be happier with your company. Customer satisfaction is crucial for the longevity of a firm so updating your accounts receivable process to prevent mistakes and increase customer satisfaction should be key.