Managing accounts receivable can be a headache if you don’t have the right tools or aren’t aware of some industry best practices. According to a survey, 82% of accountants perceive month-end close as one of the most horrific experiences of their professional lives. Matching the books, closing invoices, and maintaining the cash balance is no easy job.
Enterprise resource planning (ERP) software such as NetSuite has eased the job of the finance department to a large extent by providing centralized views of invoices, receivables, and other assets and liabilities. But implementing ERP software is only half the job done. Knowing how to use it effectively is key to success. This also includes knowing how to use add-ons such as accounts receivable (AR) software to extend the ERP’s functionality. Strong AR is key to steady cashflows and successful operations.
In this article, we discuss five AR hacks that help you save time and reduce errors when using NetSuite and AR automation solutions like RadiusOne.
With hundreds of client accounts and invoices to manage, it is impossible to track them individually on a daily basis. A dashboard can help you quickly view key metrics such as the total amount of aging invoices, customers with the highest overdue invoices, and days sales outstanding (DSO). This ensures that you stay on top of all accounts receivables and is aware of your cash flow position. Having a centralized view of all details along with options to drill down saves time and effort.
How to do it?
NetSuite ERP offers dashboards that are configurable by user roles. You can build custom dashboards that let you track metrics such as aging accounts receivable or DSO. You can further drill down each of the metrics. For example, clicking on the aging accounts receivable metric can show you the client accounts that contribute to the total overdue amount. You can also drill down further to know more about each of the client accounts and their open invoices.
You can’t be checking the financial strength of each of your clients on an everyday basis. Neither can you wait till news is out in the public about their bankruptcy? Use credit risk data proactively to check the financial health status of your clients, especially of those who owe you large sums of money.
Manually tracking this data is a herculean task. Use built-in credit risk models in AR automation apps and data from credit agencies such as Dun & Bradstreet to predict risk and stay on top of the latest developments.
How to do it?
NetSuite provides direct access to credit risk data and analytics from Dun & Bradstreet. It also offers data management features and credit decision-making capabilities. This helps you make informed credit limit decisions for different clients without having to scout for data from multiple platforms. AR automation apps connected to NetSuite can further improve these capabilities using data from multiple credit risk agencies. The apps also offer analytical models to predict credit risk and payment defaults.
You can also configure your AR system to send email alerts when the credit risk status of your customers changes. This can help you improve your collections strategy and revise payment terms for clients as needed.
With so much to do, it’s easy for some tasks to fall through the cracks. If you’re using manual methods to send clients reminders or late payment warnings, there’s a high chance that things may not go as planned. Sick days, system errors, and other unforeseen incidents are just some of the events that can spoil your carefully planned dunning schedule. Ensuring that invoices and dunning letters are delivered automatically to clients even when you are not around is important for the continuity in client communications.
How to do it?
NetSuite allows you to create multiple dunning letter templates and schedules. You can create automated dunning workflows with different messaging and intensity, based on the invoice amount and for how long it has been overdue. Use standard communication templates for low-risk customers and customized dunning letters for others. NetSuite also lets you pause dunning correspondence when you are working with a client on dispute resolution or other inquiries. You also have the option to build a dunning dashboard to view the status of all your dunning efforts.
You want your customers to pay up fast. For this, you must ensure that they’re offered their preferred payment options. They should also be able to make the payments without hassles. Make it easy for your customers to identify the payment amount and remove the need to fill tedious forms. Offer convenient payment formats to make collections faster.
How to do it?
NetSuite offers customers multiple payment options including checks, cash, credit cards, and fund transfer. Customers can make the payments through a central payment portal. AR automation app add-ons such as RadiusOne offer other advanced features as well that make payments easier. It lets you embed payment links in your invoices and dunning emails to enable customers to pay faster. The self-service portal also lets customers set up auto-pay options or authorize payments against multiple invoices at the same time.
Reconciliations are critical to ensure that your bank statements match your accounting books. It helps you close the right invoices and take steps to follow up with delayed payments. Accurate reconciliation is also essential to ensure good client relationships. You can’t be asking a client who has already paid to pay up!
Manual reconciliation methods are error-prone. Capturing check numbers and dollar figures manually for hundreds of payments is tedious and increases the chances of error. Not to mention the time it consumes. Eliminating manual tasks in cash reconciliation improves accuracy and efficiency.
How to do it?
NetSuite provides you a daily snapshot of all cash balances across your credit and cash accounts. You can set custom reconciliation rules for different payment methods using the transaction matching tool. AR automation software add-ons like RadiusOne help add advanced functionality to NetSuite such as OCR engines to scan checks and email parsers to capture payment data from email communications. The data captured is automatically fed into the AR and ERP systems and helps you to match the records and complete workflows (close invoices).
NetSuite ERP may not come with all the accounts receivable features that you want. But NetSuite has a strong API ecosystem and a number of niche software apps can fit into it without any integration issues. Utilize this app integration ecosystem, offered via SuiteApps, to gain maximum benefits at budget prices.
RadiusOne is a popular SuiteApp that is quick to implement (takes under four weeks only!), easy-to-use, and rich in functionality. RadiusOne offers distinct modules for eInvoicing and collections, cash reconciliation, and credit risk management.
Visit our website to learn more about RadiusOne. Don’t forget to schedule a demo with our team to get a quick hands-on experience of how the software works and understand how it’ll benefit you.
The HighRadius RadiusOne A/R Suite is a complete accounts receivables solution designed for mid-sized businesses to put their order-to-cash on auto-pilot with AI-powered solutions. It leverages automation to fast-track key accounts receivable functions including eInvoicing & Collections, Cash Reconciliation, and Credit Risk Management powered by RadiusOne A/R Apps to improve productivity, maximize working capital, and enable faster cash conversion. Affordable, quick to deploy, and functionality-rich: it is pre-loaded with industry-specific best-practices and ready-to-plug with popular ERPs such as NetSuite and Sage Intacct. The HighRadius RadiusOne A/R Suite is designed to automate labor-intensive processes while streamlining credit and collections activities for faster A/R processing, better cash flow and improved profitability.
Lightning-fast Remote Deployment | Minimal IT Dependency Prepackaged Modules with Industry-Specific Best Practices.