Your accounting department is arguably the most important area of your operation. If you struggle to collect payments from customers, how will you be able to keep your doors open for the foreseeable future?
Because you need money to run and grow your business, anything you can do to optimize your accounting department and increase its efficiency is worth looking into.
By moving to an automated accounts receivable solution, you can streamline your approach to receivables, providing your business with several measurable benefits that can’t be ignored.
Are you considering whether it’s time for your accounting department to move to an automated AR solution? Here are four reasons today’s leading companies are increasingly automating their collections and receivables processes.
1. Accelerated, predictable cash flow
Cash flow can make or break businesses like yours.
Approximately 60% of business owners worry about their cash flow every month. Accounting automation solutions help businesses solve their cash flow problems—or even prevent them from materializing in the first place. With automation in place, your AR staff no longer has to manually send emails to customers reminding them that payments are coming due or letting them know that payments are late. All of these communications are sent to clients automatically—meaning your customers are never billed late.
What’s more, leading automation solutions give customers the ability to pay directly from the emails they receive—which sure beats forcing them to hop over to another platform to make a payment. Automated solutions also give businesses the ability to easily observe their accounting metrics through real-time dashboards.
As a result of these features, businesses that use accounting automation benefit from accelerated, predictable cash flow. They’re never blindsided by unforeseen cash shortages.
2. Improved AR metrics
The better your accounting metrics—such as days sales outstanding (DSO) and average days delinquent (ADD)—the healthier your company’s finances will be. It’s that simple.
With an automated AR solution in place, you can improve your AR metrics because invoices and related communications will be sent on schedule and payments will be processed immediately.
For example, a recent study found that the average company takes 43.5 days to collect payment after a sale is made. The top quartile of companies, on the other hand, collect payment 25.1 days after a deal.
By leveraging a modern accounting automation solution, you can lower your DSO statistics because invoices and follow-up emails will be sent to your customers at the perfect and earliest times, encouraging them to settle their accounts sooner. Believe it or not, companies that use accounting automation solutions such as YayPay can reduce their DSO by 30%!
The bottom line? The more insight you have into your AR metrics, the easier it will be to improve them.
3. Reclaimed time
Automation frees your accountants from many manual tasks, such as tracking down information, producing reports, and calculating statistics.
There are only so many hours in the day. The more tasks you take off of your plates, the more time you and your staff will have to focus on other important facets of operations.
As automation increasingly makes its way into accounting departments, industry pundits believe that the AR staff will invest more of their time in things such as strategic planning and IT initiatives—which, over time, will make their departments even more efficient.
4. Increased productivity
With more time on their hands thanks to automation, an AR staff can focus on tasks they might otherwise ignore. Rather than creating aging reports manually, they can focus on developing stronger relationships with customers.
The right automation platform can help your accounting department work a lot faster and a lot more effectively. In essence, the investment can make it seem as though you’re increasing your team’s head count even though productivity is simply increasing because technology is taking care of manual tasks.
Accounting automation solutions are more than just a nice-to-have. In today’s increasingly competitive business landscape, they’re a must.
To learn more about what features your company should look for in an automated AR solution, check this out.