Accounts Receivable Automation: Can You Do It & Why Should You?

When running any kind of a business, there is no doubt that you will have quite a lot on your plate. From making sure the day to day operations are running smoothly, to managing finances, and then also making the right business decisions and innovating in order to grow.

Of course, managing accounts receivable will be one of the main tasks in your financial operations. Read more about it.

Now, it is one of the critical functions, meaning that you can’t ignore it and not do it right. But, it is also quite time consuming. Not to mention that the process, time-consuming and complex as it is at times, can result in some errors that can create cash flow problems.

This is why a lot of business owners are thinking about finding a solution that will help them reduce those errors, as well as save them a lot of time in the process.

And, they have started thinking about using modern technologies to their advantage. The thought process went something like this probably: “If so many things can nowadays be automated, could there be a chance for me to automate accounts receivable?”

So, if you are wondering the same thing, then you may as well keep on reading, because we will provide you with an answer below, aiming at clarifying this concept and helping you understand if AR automation is actually possible.

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Can You Automate Accounts Receivable?

Since so many different things can be automated nowadays, you would probably be surprised to hear that this is not one of them.

After all, so many different software solutions are appearing on the market, and there is no doubt that some of them have to be related to this particular idea. Is that really so, though? Well, to cut right to the chase, it is.

Or, to put it simply, the answer to the above question is yes – you can automate accounts receivable.

Understand what AR is: https://www.indeed.com/career-advice/career-development/accounts-receivable

Okay, you got the short answer. But, now you want to know what this automation would actually entail. In short, AR automation refers to the idea of using technology in order to streamline and manage all of those tasks related to the process of collecting payments from your customers.

There are, of course, various different tasks that fall into that category.

For one thing, there is the task of generating and sending invoices, the automation of which could definitely save you a lot of time. Of course, you also have to track the payments, and the right software solution can be of great help in that regard.

Then, there are also automated reminders and follow-ups to rely on, and you, naturally, also have to reconcile the payments with the invoices, as well as do proper AR and cash flow reporting.

The truth is that all of those processes can be automated with the right software solution on your hands, so if you’re thinking about doing it, you should proceed towards finding the solution that will suit your business best.

Why Should You Do It?

Chances are, though, that you are wondering one specific thing and that you want to get an answer to it before you actually start searching for your software solution.

To put it simply, while you now know that the AR can be automated, you want to find out whether it is the right move for you. Or, to put it differently, you want to know why it is that you should actually do this.

So, let me now tell you about a few important reasons.

First things first, doing this will help you accelerate cash flow. In other words, you will get to collect cash more quickly, given that the process will be automated from start to finish, from generating the invoices to actually getting the money.

When you take a look at any comprehensive Guide to Accounts Receivable Automation, you will realize that the right software solution can cover all of those process.

Thus allowing you to increase the chances of your customers paying for everything on time, and thus enjoying a better cash flow.

Apart from that, you will get to reduce human errors. Managing AR can be quite a complicated process, involving numerous tasks, and dealing with a lot of numbers, which can lead to errors.

When you automate it, though, you won’t have to worry about human errors, and you will ensure accuracy and consistency across those invoicing and reconciliation processes, which also reduces the risk potential costly disputes.

Finally, when you automate this process, you will free up your resources. Put simply, your finance team will be able to focus on other important tasks, such as forecasting and strategic planning.

And, we also cannot fail to mention that automating AR will improve customer experience as well, because they will get the chance to pay their invoices more easily, and to avoid those late fees.