How to Accelerate Cash Flow Using AR Automation

How to Accelerate Cash Flow Using AR Automation-02

Weaknesses in cash flow management were magnified for many businesses during the pandemic. Up until this crisis, the management of accounts receivable (AR) could be sub-optimal without being detrimental to a business. But in the shift to remote work, accounts receivable teams faced the harsh reality that manual workflows were far too inefficient. The digital transformation of AR can provide a more robust process for businesses. AR automation can unlock your cash flow by reducing time spent on mundane tasks, offering convenience to clients and providing  meaningful business insights.

This article will discuss how the automation of AR processes can help to increase cash flow in your business.

In this article

Reduce Time Spent on Manual Tasks

AR automation helps to speed up cash flow by reducing time spent on manual tasks. With manual invoicing, your team spends valuable time on busywork like data entry, order matching and manually sending out reminders. This not only slows down invoice processing but also prevents your team from working on higher-value tasks that could help improve your organization’s bottom line. In contrast, AR automation streamlines invoice presentment, reminders, payment processing and collections. So, whether in-office or working remotely, team members can access the same information and are able to collaborate seamlessly across the same platform. This cuts down miscommunications and speeds up invoicing, so teams can deliver an improved client experience to their customers and cash can flow more freely.

Offer Convenience to Reduce Late Payments

Collecting payments in a timely fashion is essential for you to run your business. So, when invoices are paid late, this will have a ripple effect on your accounts receivable including reduced cash flow and increased collections costs. Without automation, following up on past due invoices requires effort and time from your AR team. The added cost and effort can increase your operating costs. When collections bottlenecks, this can delay other payments down the line leading to damaged client relationships. Accounts receivable automation software helps reduce late payments and increases cash flow and efficiency by empowering customers with convenience. Electronic invoice presentment with embedded payment options allows for customers to pay when it is convenient for them and in their preferred payment method. To keep customers on top of their invoices, automatic payment reminders and follow-ups can be programmed for delivery as soon as an invoice becomes overdue. Access to a customer payment portal affords the client further convenience.  With frequent contact, you can be confident that you’ll get paid on time and your cash flow can keep moving steadily.

Gain Valuable Insights that Inform Your Decision-Making

With AR automation, you gain transparency and valuable insights that can help in understanding your company’s bottom line. In contrast, with manual processes it’s difficult to get a clear picture of your accounts receivable aging report or to gain visibility around the invoices at risk of being paid late. AR automation allows you to easily generate reports that give a comprehensive overview of your business’s financial health. This enables you to proactively manage your cash flow and make informed decisions about where to allocate resources.

Accounts receivable automation is a vital tool for businesses looking to improve cash flow management. By streamlining the key processes that keep cash flowing in, AR staff can redirect their time to focus on more strategic work. Pivoting to digital will afford for greater efficiency, improved cash flow and an elevated customer experience.

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