What is Accounts Receivable Automation & Why You Should Consider It for Your Business

The accounts receivable department in an organization is responsible for invoicing customers, communicating with them regularly to ensure timely payments, performing reconciliations and generating collection reports for the higher authorities. As you can imagine, this is a critical yet laborious process that can get quite repetitive in its nature and drain onshore resources. To tackle this challenge and streamline receivables for their business, many owners & finance leaders are now taking to accounts receivables automation. Let us try to understand how technology can help optimize this function and why you should consider it for your business.

What is Accounts Receivable Automation?

The accounts receivable process is a multi-step function that starts when a business generates an invoice for a good or service it has provided on credit. The following steps in this process include accepting payment from customers, performing reconciliation with the remittances and generating insightful reports on the entire process.

We will now briefly touch upon these steps individually and decode the role of automation in optimization.

Benefits of Accounts Receivable Automation

1. HEALTHIER DSOs: One of the biggest reasons businesses automate their receivables is to bring down their Days Sales Outstanding, or DSO. Defined as the average number of days a company’s accounts receivables remain outstanding before they are converted into cash, DSO is the most critical accounts receivable metric used to determine the efficiency of a company’s collection system. Automating accounts receivable optimizes the collection process, leading to faster payments and thus, reduced DSOs.
2. REDUCED OPERATING COSTS: When a business performs accounts receivable onshore, it spends a good chunk of money on hiring & retaining skilled collection experts. Automating these tasks, on the other hand, allows repetitive tasks to be automated, eventually bringing about cost savings of up to 50%.
3. EFFICIENT, ACCURATE COLLECTIONS: Irrespective of your accounts receivable team’s qualifications, manual collections are prone to human errors that can prove costly for your business. Automation, however, reduces dependence on people. This leads to a more efficient & accurate collections process where humans intervene only in case of exceptions. In addition, automation also allows businesses to implement the same processes across the board, which further improves overall efficiency.
4. HAPPIER CUSTOMERS: As automation is synonymous with improved invoicing accuracy, user-friendly interfaces and more streamlined processes, customers are bound to feel valuable. In addition, the frequent, automated communications ensure that you are in constant contact, enhancing the overall customer experience.

QX Global Group: Your Accounts Receivable Automation Partner

By now we know that accounts receivable automation will result in optimized processes, improved cash flows and healthier customer relationships. However, implementing these automation solutions is highly technical and at times, your onshore staff might not have the expertise & experience. QX Global Group is a global Business Process Management (BPM) company with rich experience in automating accounts receivables for businesses of all sizes, across industries. Our team of collection experts is adept at working with all industry-standard tools and can even incorporate any additional tools that might suit your organizational needs better. Get in touch to kickstart your accounts receivable automation journey today!