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7 Step Game Plan to Embrace Automation

17 November, 2021
4 mins read
Timothy Fogarty, AVP, Digital Transformation
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What you'll learn

  • Learn about the bottom-line effects of outdated ERP on your business.
  • Explore the foundation steps that companies embrace before digital transformation.
Pre-automation Checklist: A 7-step guide
To Sum it Up
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PYMNTS research shows that companies that automate their AR processes are able to adapt to market fluctuations. SMBs are more likely to face constant hardships while managing multiple tasks with limited resources, which makes AR automation essential.

7 Way Game Plan to Embrace Automation

Steady cash flows and efficient accounts receivables are the pillars of your business. With competition becoming fierce, more companies are adopting different methods for accounts receivables to increase their efficiency. Many small and mid-sized businesses(SMBs)  have started automating their AR to keep up with the dynamic market.

Are you considering AR automation? Here is what you need to keep in mind before you switch.

Pre-automation Checklist: A 7-step guide

Step 1: Assess your company’s current health.

Before adopting new technology, it is necessary to peek into your current system and analyze each and every aspect of it. Here are some questions you can ask yourself while analyzing:

To what extent are your employees doing manual tasks? 

  • Analyze the functional areas where your employees spend the bulk of their time. Ask them what prevents the smooth management of AR. This will give you an insight into the daily routine of your employees.

How much time is consumed to perform the manual tasks?

  • Calculate the overall time consumed to manage AR operations and the time taken to perform individual departmental tasks.

Do your analysts focus on critical tasks such as collections and credit management?

  • Delve deeper and ask your team which of the AR tasks they spend most of their time on. There is a chance that your team spends a huge part of their time on repetitive tasks and lesser time on critical tasks.

How efficient is your dispute management system?

  • Find out how fast you can resolve the disputes. An ideal dispute management system would identify the dispute and fix it before the account becomes overdue.

These questions will provide insights into your company’s current AR management system and help you take necessary actions for development and growth.

Step 2: Assess your financial health and current expenses

As a finance leader, access to updated financial data and insights into your company’s financial health is critical. You need to be aware of all the expenses alongside all the current investments and assets.

To ensure that you assess your finances with accuracy, you can ask yourself the following questions. Being aware of

What’s your company’s current revenue?

  • Revenue received by the company is listed as sales, net sales, or net revenue. And this should be your prime area for focus as it determines how much money your current product sales are bringing.

Have you observed any affirmative change in your ROI from last year?

  • An increase in ROI represents an increase in the returns post investments compared to last year’s returns.

How does your current days sales outstanding(DSO) look like?

What measures do you take to reduce your DSO and increase your ROI? And how was the outcome?

What are your overall operational expenses and the split at the department level?

  • Any form of expenditure such as rent, equipment, inventory costs, marketing, payrolls, insurance, and R&D funds, will come under operational expenses or OPEX.

How quickly are you able to close your open invoices?

  • Time to close open invoices tells how much time it takes to collect the amount and close the account. Faster collection equals fewer overdue payments and less bad debts.

How efficient is your collections management?

  • This question will help define the efficiency of your collections management. You can assess your system’s productivity by looking at your dunning and collection processes. Learn more about the dunning management challenges and the solution. 

Can you identify the at-risk accounts before they are overdue?

  • At times, due to the absence of standardization and account prioritization collection, analysts miss out on high-value accounts and the accounts which are more likely to become overdue.

Step 3: Integration Capabilities

To learn how smoothly your ERP(enterprise resource planning) will integrate with AR automation, you need to study your ERP. Since the Ar automation needs to sync with your ERP system, it is essential to know if the software and the system are compatible. Problems in this area can lead to long-term issues.

Assess your AR automation solution in context to how well it will add to the capabilities of your ERP. This will ensure that your AR solution grows along with your business.

Step 4: Get buy-in from stakeholders.

Before proceeding with integration, you must consult with all your key decision-makers to ensure smooth operations. The best way to convince your stakeholders about the expected increase in ROI, overall AR efficiency, and employee productivity post automation. Provide them with proper analysis and reports to highlight how automation will help you resolve your AR pain points.

Get buy-in from stakeholder

Since AR automation is a big step for your company and will affect your company’s future at multiple levels, you need to have a clear understanding of all aspects.

Step 5: Have a roadmap in place.

At times, companies only worry about the current situation and take decisions without leaving any room for growth. Don’t make this mistake, and plan out a roadmap for your company. If your company has a varied customer base that is subject to change, it is pretty evident that you are looking for an AR solution that is scalable.

Your ERP can handle the workload if your customer base is small. However, when your company expands and the customer size increases, you will face difficulty managing the AR due to ERP limitations.

Step 6: Ensuring customer expectations

Keeping customer satisfaction in mind is the ideal method to ensure timely payments. With a growing customer base, it has become reasonably necessary to provide multiple payment options.

With the optimal solution, you can ensure timely collections enable your customers to have a hassle-free experience. Today, there are many payment options available ranging from physical to digital methods, notably:

  • Payment or Portal Gateway
  • ACH Payments
  • Cash
  • Checks
  • Debit/Credit Cards
  • e-Wallets
  • Wire Payments

Step 7: Employee Training

Not preparing your employees for the new technology can be the biggest mistake you can make. Your employees will be working on the solution and running the day-to-day operations, so it is necessary to train them on the software, solution, and feature functionality.  Setting up automation walkthrough sessions with your employees or those directly handling this can be a way forward.

To Sum it Up

In this dynamic world, companies are looking for a more dynamic solution to their problems. And automation is one such solution with the best returns. Close to 68% SMBs are aiming to shift to automation in the near future. It is high time that you also start thinking about plugging automation into your system.

At HighRadius, we have helped companies smoothly integrate their system into our AR automation solutions. With the help of RadiusOne, mid-sized business owners can now put their AR on autopilot and overcome the hiccups that negatively impact their business’s health. Talk to our experts today to learn more about RadiusOne AR Automation Solutions. 

Want to learn more about how the other mid-market companies are getting smarter? Check out our blog on the secret recipe for AR automation.

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