In past articles we answered the question, “how many employees does a company need to better manage accounts receivable?” While having enough people is important, we often find that staffing alone is not the culprit of inefficient and ineffective collection efforts; the processes and systems in place are also a part of the problem. Why? because they create inefficiencies that require employees to spend most of their time and effort in the wrong places. Rather than calling customers, handling disputes, or using business intelligence and data to improve the process, they’re spending most of their time digging through emails, updating spreadsheets, prioritizing their daily activities, and putting out fires.
If you’re like most companies your accounting system, aging reports, and spreadsheets make up the backbone of your accounts receivable process- thats likely your biggest issue when it comes to employee productivity and getting paid on time. A study from Paystream Advisors compared how collectors spend their time when they are using manual, more traditional strategies (spreadsheets and agiging reports from their accounting sustem) vs. those who use an automated accounts receivable management system to manage accounts receivable. The results are quite impressive:
Paystream Advisors found that those who automate their accounts receivable process are spending 3X more time on value-added activities directly related to collecting invoices than those who rely on manual processes!
Related Reading: PayStream Report: Increasing Control of the Order-to-Cash Process
With accounts receivable automation your collectors are spending their time on what matters- collecting invoices and building customer relationships. While they are doing that, your accounts receivable automaiton software ensures nothing falls through the cracks; such as reminding customers about payment or late notices. For the tasks the system cannot do on its own, a to-do list for your collectorsis automatically generated based on rules defined by credit managers. The list has their most pressing and important task on the top, and as the collector completes the actions, they drop off, and more tasks are added to the list. Below is an example of what this to-do list might look like with Anytime Collect accounts receivable automation software:
Another cost and labor concern to think about is this- how much time and money do you waste manually printing, preparing invoices and sending invoices, reminder letters, and other communications that could be automatically delivered? It’s probably much more than you think. Here’s a quick example:
Accounts receivable software offers features to allow you to save money by eliminating the need to print and mail accounts receivable communications and invoices. For example, you can email invoices and reminders to your customers, allow them to pay online, and use an online customer portal to manage and collaborate with customers on documents, such as credit applications, invoices, statements,etc.
Related Reading: Best Practices in Business Credit Management : Offering credit terms to customers is a necessary risk, this white paper will help you make sure you’re not losing money in the process.
Accounts receivable automation is a proven way to reduce the costs associated with managing invoices and the rapid ROI only helps to keep the cash flowing in your business. Click below to use our complimentary ROI calculator and see how much you’ll save then you put your accounts receivable on auto-pilot.