6 Benefits of Leveraging Technology to Optimize Accounts Receivables

Introduction

A global pandemic, geopolitical crises, and supply chain challenges, followed by inflation, interest rate hikes, and recession risks! Led by such several macroeconomic factors, the economic uncertainty has forced finance leaders to rethink and reconfigure business strategies to improve their finance functions, including A/R processes, for continued growth. Finance leaders are well aware that be it whatever crisis, once the dust settles, there will be leaders and laggards, and it will be those who chose the right technology that will fall in the former category.

However, 12% of SMBs are concerned they won’t survive beyond 2023, with cash flow challenges impacting roughly 1 in 4 small and medium-sized businesses (SMBs), according to PYMNTS. Under such circumstances, it is imperative that finance professionals proactively plan, record, manage, and report key business operations daily.

Given the immense pressure to maximize revenue growth, profitability, and resilience, it does not come as a surprise that CFOs consider digital acceleration as the top spending priority through 2023, as per Gartner. And it goes without saying that digital transformation has been a savior for businesses in this cash-strapped economy.

A total of €1.49 trillion is trapped in working capital, globally, according to PwC’s Working Capital Study 2022-23. The study further highlights the critical need for automation across accounts receivables.

Let’s see how technology can automate many aspects of your accounts receivables.

6 Benefits of Leveraging Technology to Optimize AR

The growth opportunity steered by several crises has urged businesses to look for scalable solutions that can help increase the operational efficiency of back-office AR processes. Digital transformation in the finance industry has now become a part of a successful business strategy.

But what are the actual benefits associated with automating your company’s finance function, especially accounts receivables? Is it worth the time and effort? Having automated receivables management in place can help in:

1. Real-Time Cash Reconciliation

Most businesses struggle with manual reconciliation due to paper-based A/R processes. Leveraging automation helps businesses in the auto-aggregation of remittance through multiple channels (email, web-portals, EDI) and auto-mapping of invoices with payments to ensure same-day cash posting. It also eliminates human errors and reduces costs by eliminating lockbox key-in fees. RadiusOne AR Suite – Cash Reconciliation App allows you to automate your cash reconciliation process. By eliminating the manual aggregation of remittances across various sources and formats with automation, you can fast-track cash accounting with automated invoice matching and achieve faster exception handling. Automating cash reconciliation frees up your team’s time and allows them to concentrate on crucial downstream processes such as collections.

2. Credit Risk Mitigation and Faster Customer Onboarding

Companies spend a lot of time aggregating credit information from different sources to glean a customer’s credit score, which results in a delay in onboarding new customers and blocked orders. By introducing intelligent automation in credit management, you can not only onboard customers faster but also run on-time periodic reviews and handle blocked orders with just a single click. RadiusOne AR Suite – Credit Risk Application makes streamlining your credit management process easy. The software’s automated credit scoring is based on industry-specific best practices. It auto-assigns your customers’ risk score, risk category, and credit limits to standardize the credit process and offers you end-to-end process visibility with out-of-the-box reports and dashboards. It enables you to track team productivity and key credit metrics including credit utilization, bad-debt and customer onboarding time.

3. Proactive Collections Process

Manual dunning is a hectic and time-consuming process in the absence of a prioritized worklist. Automation helps you create a prioritized worklist with reference documents for analysts to follow up with at-risk customer accounts and minimize the Days Sales Outstanding (DSO). Apart from that, features such as automated correspondence and a central repository for backup documents could help the collection team in outlining proactive collection strategies.

4. Improved Customer Experience

By providing frictionless payment options and personalized collections experiences through automation, you can not only keep your customers happy but also stay ahead of the competition as you grow. RadiusOne AR Suite – Collections App streamlines the payment process, making it more convenient for your customers and reducing the likelihood of late payments. Additionally, it provides a unified view of your customers, ensuring effective collaboration across teams. With one-click access to all A/R information and collaboration history, your teams can work together more efficiently, delivering exceptional customer service and driving business success.

5. Reallocation of Resources to High-Impact Tasks

Automating AR processes will save time in tasks that require manual intervention, and are error-prone. The time saved could be used in high-impact tasks such as collecting from a high-risk customer, which would improve the overall efficiency and productivity of your AR teams. Moreover, automating the accounts receivables process can significantly improve team productivity, as automation enhances accuracy, provides real-time visibility, and improves customer service by ensuring that all data is accurate and up-to-date. Overall, automating accounts receivables can help businesses make more informed financial decisions, respond quickly to changes in cash flow, and enhance the overall customer experience.

6. Improve Cash Flow Management

Automating accounts receivables can help businesses improve cash flow management in several ways. Automated invoicing and payment processing can speed up the payment cycle, reducing the time between invoicing and payment receipt, thus improving cash inflows. Automated accounts receivables provide real-time visibility into cash inflows, enabling businesses to monitor their cash position and make informed financial decisions. Automated collections can help businesses collect outstanding payments more efficiently, reducing the time and effort required to manage collections, and improving cash flow. Additionally, automated accounts receivables can improve cash flow forecasting by providing accurate and timely information on cash inflows and outflows, enabling businesses to plan and budget more effectively.

Take your ERP to the next level with RadiusOne

Digital transformation is happening and it’s essential to prepare for a digital future to ensure business growth and continuity. Despite the economic turmoil, mid-sized businesses are trying to cope up but hidden operational costs associated with AR processes could pose a major challenge. Identifying such hidden costs and leveraging technology to eliminate them could save a lot of money and, at the same time, improve the overall process efficiency. Transforming accounts receivable is key to make your business stand ahead of the competition and helps in securing essential revenue required for a scalable future.

Today, as a finance leader, you need an ideal plug-and-play solution to automate your accounts receivables and stay ahead of the competition. With barely any wait time on your ROI, HighRadius’ RadiusOne AR Suite provides a quick 28-day setup time and seamless integration with popular ERPs like Oracle NetSuite, Sage Intacct, and Microsoft Dynamics, giving mid-market CFOs an advantage. This one-stop-solution allows you to fast track your collections, achieve zero-touch cash posting, and monitor your customers’ credit risk in real-time. With faster customer onboarding and industry-specific automated credit scoring, you can onboard customers rapidly and improve credit management. Thus, the RadiusOne AR Suite can help you optimize your accounts receivables, which is critical for ensuring your SME’s financial health and staying ahead of the competition in today’s fast-paced business landscape.