Wholesale distribution companies face countless challenges, including managing their supply chain, meeting delivery dates, managing the sales funnel, quality control, controlling overhead costs, and cash flow especially. To add fuel to the fire, distributors typically operate on extremely slim margins, making access to cash and working capital extremely important, but hard to come by when it’s constantly tied up in accounts receivable.
The problem is that most distributors rely on manual, paper-based accounts receivable processes which translates to low invoice visibility, decreased collector productivity, ineffective financial planning, and plenty of data entry mistakes. By turning to an automated accounts receivable management system that integrates with ERP or accounting software, distributors can automate their most time consuming and tedious tasks, things that usually get pushed to the end of the to-do list, to ensure they are being completed for each and every invoice. This makes it possible to streamline the process and optimize the cash collection cycle; a sure-fire way to quickly collect invoices and access the working capital they need for sustained business and growth.
Accounts receivable automation helps distribution companies get paid faster, reduce outstanding accounts receivable, and improve the customer experience – something that’s increasingly important given domestic and global competition, increased operational costs, and shrinking margins due to product commoditization. Accounts receivable management automation increase cash flow in wholesale distribution companies by allowing users to:
- Manage invoice dispute resolution and prevention through built-in business intelligence and reporting.
- Review shipment, bill of lading, and freight information for invoices.
- Manage established accounts different than new accounts and define optimal workflow for customers based on their industry.
- Streamline the invoice creation and delivery process.
- Automate customer communications to send out strategically timed payment reminders, past due notices, and other important communications.
- See what has been done with insights to measure the results for continuous process improvement.
- And much more.
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by Jeanne Lee