If you’re running a booming business with plenty of credit sales, it’s great news for your company. It also leaves you with a ton of paperwork. You’re constantly entering sales figures in accounts receivable (AR), invoicing customers, remembering whether they’ve paid, contacting them if they haven’t, and adjusting AR when they settle up. That can add up to a lot of time spent bookkeeping, but it has to be done. One solution is accounts receivable automation. Efficient AR collections can make a big difference to your bottom line. Read on to learn how to achieve accounts receivable success using automation.
What Is Accounts Receivable Automation?
When you have problems with AR they’re not just inconvenient, they’re financially painful. When clients don’t pay on time—or at all—that reduces your cash flow. Without sufficient cash coming in, you can’t pay employees, utilities, or the government. Accounts receivable automation refers to software that smooths out the kinks in your AR workflows. Automated AR reduces human error by reducing manual data entry. When you automate accounts receivable, the software can record transactions as soon as you complete the work order or sales order leaving you with much less accounting work
How Does Accounts Receivable Automation Work?
AR automation software can invoice clients for you, track payments, and re-send bills when clients don’t pay by the due date. If you have clients who make regular monthly transactions, the system can set up recurring or subscription billing. When you automate your accounts receivable you will save time, effort, and revenue leakage. There’s a wide range of software available, but cloud-based software is typically the best because it keeps all your data updated, accurate, secure, and accessible.
The Advantages Of Cloud-Based Software
As you grow, your bookkeeping will have to change to keep pace. This growth isn’t because of the increase in sales revenue but in the number of invoices. If your business consists of five $1 million transactions a year, recording them manually is a breeze. If it’s a million $5 sales, bookkeeping will be a nightmare. Sooner or later, your success will make manual bookkeeping impractical. Cloud-based accounting software could be the answer.
Cloud Based Software Is Scalable
Business owners who outgrow their original bookkeeping software often settle for short-term solutions. They buy a system that’s both affordable and big enough for their current needs, but that doesn’t offer much beyond that. A few years of growth and they have to waste time, effort, and money searching for and implementing a new accounting software tool.
That’s one of the many advantages of using cloud-based, automated accounting solutions: these platforms are scalable. You don’t buy the software or the servers that store the data. Instead, you pay an outside contractor to handle everything. In a few years, if you need to handle two, three, or 10 times as many transactions, just scale up the level of service. No need to upgrade equipment or relearn a whole new system.
Consistent And Professional
Good customer relationships are the backbone of any business. Errors in billing—wrong customer or wrong amounts—can make you look unprofessional. Another advantage of automating accounting operations is that the tech will reduce human errors.
Versatile
Cloud-based systems for accounts receivable automation also open up new avenues for your customers to pay online. That’s a plus for many clients, and can speed up the rate at which they pay you.
Transparent
Cloud-based accounting software makes it easy to assemble information in the format you need it. Accounting Seed’s accounting Platform, for example, comes with built-in, customizable dashboards and reports. This is a useful feature when you need specific details. For example, you might want to see how fast a given customer settles their invoices, accounts receivable from a particular month, or AR figures related to specific projects or regional branches. You can generate reports and dashboards to display that information in real-time without having to wait for the end-of-the-quarter financial statements.
Accurate Projections
Accounts receivable automation can crunch the bad debt numbers for you, figuring out how much debt goes bad at 30 days late, 60 days, and 90 days. With automated accounting software, it’ll be easier to make accurate projections of the percentage of customer defaults and monitor the overall health of your business.
Ready to transform your accounting process by automating your systems? Contact us and let’s get started.