Once you get in the habit of something, it can be hard sometimes to take a step back and realize that it may be a process that is hurting you more than it is helping. Advances in technology, however, are changing every day and a lot of the processes you might be doing manually could be made a lot easier. The easier these tasks are made, as well, will also decrease your costs, as well. We’re going to lay out the true cost of not automating your accounts receivable processes.
If you are not automating your accounts receivable processes currently, this is probably what a typical day looks like for you:
- Create Invoice
- Print Invoice
- Mail Invoice
- Prioritize Calls
- Prepare for Calls
- Make Collection Calls
- Wait for Payment
- Get Paid
If you automate those processes, you could eliminate five steps immediately, drilling it down to simply create invoice, make collection calls and get paid. By eliminating such a large portion of the steps, you have the time available to make more collection calls to more customers. So, how does this break down cost wise?
Directly, you usually see costs from labor, invoice preparation, printing, envelopes and postage. There are many costs for manual processes that aren’t as visible, however. Indirect costs, such as disputes and resolutions, account reconciliation, storage of invoice and supporting documents and credit notes, also weigh down. Finally, the most difficult costs to see from manually managing your accounts receivable include working capital finances costs due to the time it takes to get paid, payment processing errors, debt collection agency costs, invoice financing and management time spent reviewing disputes.
These costs continue to add up, unless you automate these processes. A lot of these costs can be eliminated, especially those dealing with processing errors and disputes because manual mistakes aren’t being made. If you’re currently stuck in the habit of doing all of your accounts receivable processes manually, maybe it is time to consider a different route.