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Facing issues in managing accounts receivables? This tip can help! 

What you’ll learn

  • Present-day challenges of accounts receivables
  • Burning questions by financial analysts amid uncertainties
  • How AR automation can help to scale up business

Steady cash flows and efficient collections are the pillars of a successful business. But things don’t always go as planned. Your business growth can be hindered by late-paying customers, insufficient cash inflows, missed deadlines, resistance to adopt e-invoicing methods, and so on. Hence, cash gets trapped in the company’s balance sheet, leading to delinquent bills, bad debts, and revenue losses. As the industry evolves, financial analysts adopt different methods to measure the long-term creditworthiness of customers and to manage collections. Sadly, even today most SMBs use manual methods for accounts receivable management. Legacy processes force teams to spend the majority of their time on low-value tasks. This leads to increased days of sales outstanding (DSO), management disputes, write-offs, and imbalanced working capital. The global pandemic is further exposing inefficiencies in the current financial systems. CFOs and financial analysts are troubled by several burning questions such as: Questions that matters

How can you ensure that these challenges do not hinder your debt collection efforts and business growth?

Smart automation is the #1 proven key to collection success

CFOs and financial analysts understand that automation of accounts receivable will help them improve financial liquidity and accelerate order-to-cash processes.

Research by PayStream Advisors throws light on the shift to accounts receivable automation. They found: 

  • Companies that rely on manual processes to manage collections spend 15% of their time prioritizing their activities, 15% of their time gathering information to make a collection, and only 20% of their time communicating with customers about the payment.
  • In contrast, companies that use accounts receivable automation solutions spend only 6% of their time prioritizing their activities, only 6% of their time gathering information for collections calls, and 62% of their time communicating with their customers about payment.

Time spend by companies relying on manual processes

Thus, automating AR processes will help you focus more on high-value tasks such as communicating with clients and building a collections strategy. 

Here are five reasons why you should automate your accounts receivable process.

1) It saves time: Automated AR applications save you considerable time otherwise spent on spreadsheets and paper-based workflows. AR applications can plug and play into your existing system and improve the efficiency of your day-to-day operational tasks. Trust us – you will never have to worry about making the next call and listening to endless excuses from your late-paying customers.

2) Automation is on the rise: Your competitors are investing in AR automation software and you wouldn’t want to be left behind, would you? MarketWatch predicts that the market for accounts receivable automation software will register a CAGR of approximately 12.69% during the forecast period, 2020 – 2025. This indicates that you need to take your AR processes to the next level with automation.

3) Reporting gets easy: AR automation apps are built with intuitive reporting features that help you smoothly track past-due invoices. You’ll also receive alerts with suggested immediate actions to take for the different AR aging buckets. Insights generated from automated reports can help you decide the key performance indicators (KPIs) of your team.

4) Assess credit risks before onboarding customers: Assessing the creditworthiness of your new customers is important. You should not on board those who are likely to fail to make payments. An AR application makes credit risk management and automated dunning easy. Credit scores get calculated automatically and analysts can make informed decisions quickly by reviewing the credit limits.

5) You can focus on better team efficiency: If your team is stuck with collection calls and number crunching, you get only limited time for strategic tasks. Automation saves you the long hours spent on manual workflows. Your team can then prioritize tasks and take suggested actions based on the pre-curated worklist generated within the AR application.

In a nutshell:

If you have read so far, this means you are interested in reimagining your existing AR process. As a financial analyst, you need to balance the cost and long-term effectiveness of the AR solution you wish to invest in.

Your AR application should be cost-effective, have self-learning ability, get deployed quickly, and offer advanced built-in features. Deciding on the best AR application will not be easy, but investing in AR automation software will definitely take your company to the next level. Choose the right one!

Get to know how RadiusOne ensures agile collections in less time. Voted #1 in IDC MarketScape Midmarket 2020–2021. Book a demo today! 

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The HighRadius RadiusOne AR Suite is a complete accounts receivable solution designed for mid-sized businesses and SMBs to automate eInvoicing, Collections, Cash Reconciliation, and Credit Risk Management to enable faster cash conversion and maximize working capital.

It is quick to deploy and ready to integrate with ERPs like Oracle NetSuite, Sage Intacct, MS Dynamics, and scales to meet the needs of your order-to-cash process.

Lightning-fast Remote Deployment | Minimal IT Dependency
Prepackaged Modules with Industry-Specific Best Practices.

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