At this point, you’re probably aware that your accounts receivable is one of your most important assets in your business. If you’re not collecting from your customers then you have no way to continue to grow your business. One way to combat chronic late payments is by implementing accounts receivable software, however, just like any software it can be difficult to decide which one is right for your business. Below, we will cover the four most important considerations for choosing accounts receivable software.
- General or ERP Specific
There are two options when it comes to selecting accounts receivable software. The system can either be made specifically for your ERP, which is common among high end ERP systems, or it can be a general accounts receivable software that can integrate with many different ERP systems. There are pros and cons to both. If you purchase an ERP specific accounts receivable software, the system will be made by people who know your ERP very well and it will integrate with the ERP version you are on very well. However, the downside is that your ERP system only lasts 10 years. Unless you have a 100 percent guarantee that you will stay on the same ERP system, you may have to also end up replacing the accounts receivable system. A system that integrates with many ERP systems can be integrated to yours and may last you a little longer.
- B2B or B2C
B2B and B2C collections are two totally different practices. In B2C, you are often collecting from the customer on the spot when the service or product has been delivered. The automation for B2C is needed for frequent and quick contact with the customers. On the other hand, B2B collections happens more on a credit basis. Businesses are able to pay you over a longer period of time, which means you have to stay in constant contact and create a relationship. The accounts receivable software automation for B2B should make that relationship easy to maintain and help to manage credit terms.
- Hosted v. Premise
The cloud software space truly didn’t become an option until a few years ago, but it has become a reliable and more affordable option than on-premise. Premise-based solutions have to be maintained in house by your IT team and are difficult to maintain for integrations, upgrades and installation. A hosted solution is managed by the vendor and you will automatically receive all of your updates whenever the developer rolls out with a new one. Hosted solutions have become secure and affordable options for many small to mid-sized businesses.
- Right Sized Software
You can buy software that is too big for your company, and you can also buy software that is too small. You truly need to find the “perfect fit”, which will serve your business needs now but also support you when you begin to grow. Although this can be difficult to discover what the right size is for you, there are options by company size.
If you’re spending a lot of time and resources on choosing the right ERP software, you should also spend some time on discovering what the right accounts receivable software for your company is. Since cash flow is such an important aspect of running a company, it doesn’t make sense to be running on a system that is outdated or too small for you.