Enabling Efficient Collections and Reducing Days Sales Outstanding

One of the key aspects of accounts receivable that impacts cash flow is the length of time between when a sale is made and when payment is received, otherwise known as days sales outstanding (DSO). Manual processes for tracking invoices, handling disputes and following up on past due payments extend DSO and tie up resources. Automating accounts receivable enables organizations to streamline collections activities and reduce DSO through tools that track invoices, send automated payment reminders and integrate with accounting software. With an automated system in place, administrative staff no longer have to manually chase down payments and can focus their efforts on more strategic tasks.

Automating Invoicing and Billing Makes the Process Smoother

Organizations of all sizes can benefit from Accounts receivable automation the generation, delivery and storage of invoices. Integrated billing and invoicing software allows sales teams to quickly generate customized invoices from approved orders and quotes. Customers receive invoices through their preferred method, whether that's email, traditional mail or directly through an online customer portal. Automated workflows ensure invoices are routed efficiently for approval before being sent out. With invoices stored digitally, administrative staff has quick access to documents if needed for reference, disputes or resending. Accounts receivable automation saves time spent on manual data entry and mailing of paper invoices.

Online Payment Portal Facilitates Convenient Collection

Providing customers with an easy, around-the-clock method for making payments online streamlines the collections process. Customers appreciate the convenience of paying invoices without the hassle of writing and mailing checks. They can view outstanding balances, payment history and due dates 24/7 through a secure online portal. Common features include one-time and recurring payment options by credit card, bank transfer or digital wallet. In addition to driving up payment volumes, a user-friendly portal reduces back-office work associated with processing and reconciling mailed checks. Funds are deposited directly into business accounts, speeding up cash collection.

Credit Card Processing Broadens Accepted Methods

While online payment portals offer convenience, not all customers are ready or willing to pay invoices with credit cards. Integrating credit card processing expands payment flexibility. In addition to major card brands, small businesses benefit from options like paying with debit cards and consumer financing programs. When entered manually, credit card numbers pose a security risk. Automated payment solutions safely tokenize and encrypt card details according to PCI compliance standards. From a single interface, customers can choose chip-and-pin or contactless checkout experiences. Back-end integration deposits funds into business bank accounts just like electronic transfers.

Automated Reminders Encourage On-Time Payments

Timely follow-up is critical for settling unpaid invoices before they become overdue and age further into delinquency. Sending repetitive manual reminders is labor-intensive yet inconsistent. Automated email and SMS notifications help ensure prompt follow-up at scheduled intervals past the due date, such as seven, 14 and 30 days. Customized workflows allow targeting reminders to specific transaction types, customers or amounts outstanding. Auto-generated correspondence embedded with payment links and balances due achieves a higher rate of response than paper bills tucked away. Resources are freed up for more valuable activities when routine follow-ups handle themselves.

Reporting Gives Real-Time Business Insights

To maintain healthy cash flow and assess risks, accounts receivable professionals need accurate, up-to-date information on payment patterns, aging buckets and potential problem customers. Manual reporting is a timely, error-prone process. Accounts receivable automation pulls data directly from integrated financial systems for consolidated, real-time views of key performance indicators like DSO, collections performance and customer credit limits. Customizable reports present clear snapshots of account statuses that guide efficient resource allocation. Teams quickly address deviations from targets and take preventative actions to head off potential delinquencies or defaults. Data-driven insights empower proactive management of the receivables process.

System Integrations Ensure Data Accuracy

Accounts receivable is just one part of the business financial picture. For automatic reconciliation and reporting, transactional data needs to sync seamlessly with financial ledgers and dashboards. Separate data silos create inconsistencies and inaccuracies that hinder performance tracking. Automating integration between invoicing software and accounting platforms like NetSuite or QuickBooks ensures a single source of truth. Sales are matched to billing and payments flow through seamlessly. Financial statements incorporate up-to-date receivables information without manual intervention. System-wide data visibility allows teams to focus on analysis rather than mechanical data compilation and entry tasks across disconnected spreadsheets.

Bringing accounts receivable automation to the core functions of accounts receivable provides a comprehensive solution for accelerating cash collection, reducing costs and gaining real-time insights into financial health. By streamlining traditionally manual processes, organizations of all revenue sizes can leverage technology to strengthen cash flow, enhance customer experiences and drive revenue performance.

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