Accounts Receivable Management is the cornerstone of a steady and healthy cash flow, allowing your company to focus on driving development, improving operations, and maximizing your team's time and resources.

Cash flow is critical for acquiring resources, systems, launching new products, and paying off debts. Because of a lack of cash flow, businesses struggle with the required working capital for smooth operations. Days Sales Outstanding (DSO) is an essential indicator for assessing the health of your company's cash flow. It shows on an average the amount of time that customers take to pay their invoices. A low DSO suggests that bills are being paid swiftly, indicating the health of cash flow management.

On average, approximately 25 percent of monthly revenue in the United States is tied to AR payment terms and credit debt. Why is AR automation important, and how can it assist your business to improve cash flow, minimize DSO, and reduce payment processing time?

Why should you automate accounts receivable?

A/R automation software can benefit your team in a number of ways. These solutions can help you save time and money by allowing you to approve invoices faster and providing interactive dashboards with accurate and useful analytics. The key to managing your cash flow is to keep track of your DSO and try to keep it as low as possible. By automating receivables, you may minimize your DSO while maintaining a healthy cash flow for your business.

Predictable cash flow

By automating the payment processes, you can significantly improve your liquidity. You can streamline the way your business handles accounts receivables by automating manual collection processes. You can minimize your DSO and improve your cash flow by having fewer errors and more access to data.

Simplified A/R metrics and reporting

You can improve A/R metrics through automation with instantly processed invoices and payments, automatic reminders, and dashboards. You can track and measure DSO with less time and effort if you have easy access to data reporting, and with a fraction of the effort, you will be able to analyze and track your company's cash flow in real-time. 

Customer Notifications

It takes longer to manually scan through emails to ensure that clients receive the right communication. Customers may not receive invoices, or outstanding invoices may be left unpaid if correspondence falls between the channels. Automation of accounts receivables also helps to eliminate human error. It ensures that invoices are delivered to the right customer and that no correspondence is lost in a pile. 

Late Payments

Using manual accounts receivable (A/R) systems, staying ahead of the curve on late payments is difficult. Manual A/R systems restrict your team to low-value tasks, limiting the amount of time available for collection. Automating your A/R processes can help your team stay on top of late payments and boost cash flow.  When you find a customer is routinely late with payments, A/R automation can allow you to automate credit hold notices.

Increased Payment Options

Electronic payments, such as electronic transfers, ACH, credit cards, and other payment processors like PayPal can be leveraged and processed automatically, encouraging customers to pay on time.