Accounts Receivable (AR) Management is the foundation of a consistent and solid cash flow, keeping business in a situation to drive growth, work better, and increase productivity. In the new COVID economy, it has become evident that some AR measures are obsolete, being intensely dependent on paper and manual processes that restricted cash flow and scalability in such challenging times. As such, AR automation has become a cornerstone to ensure agile and resilient operations. 

The AR process entails several steps and requires multiple stakeholder sign-offs to wrap up the process. In an ideal scenario, the entire AR process can be completed within a day or a few hours. However, the reality is far from the ideal scenario, wherein cumbersome processes cause errors, thereby delaying processes, ultimately hindering cash flow.

Why Is Accounts Receivables Automation Important?

Automation can help decrease human errors in an AR process and optimise the way a company perceives collections, reconciliations, and cash cycles. It can assist companies in improving cash flow and amplifying productivity by speeding collection times, thereby improving the financial state. AR automation can help companies to augment functions and departments, capitalise on their time and capacities by zeroing in on strategic challenges rather than ordinary, tactical operations. It helps finance teams to be efficient in collecting their outstanding invoices and achieve their targets without bringing in delinquent customers.

3 Ways AR Automation Benefits CFOs

There are several reasons why automation of accounts receivable management is essential for CFOs. Here are a few of the most significant benefits to keep in mind: 

Receive Payments On Time 

Accounts receivable automation places customers in the driver’s seat and provides them with a simple way to give updates on payment status, thereby enabling transparency and accountability in the AR process. It allows you to take a more customer-centric approach to payment collection overall. 

Faster Payment Process 

Automating Accounts receivable provides CFOs and accounts teams with a centralised workspace for overseeing all aspects of the AR process. In addition, it streamlines communications across teams, thereby transforming the collection process. 

Visibility Into A/R Processes

Knowing precisely where all payment collection stands are effectively the most crucial part of AR automation. Furthermore, this is what CFOs need to ensure that all processes are proficiently consistent. For instance, Capvel’s ability to integrate with the company’s existing ERP to digitise business and streamline the supply chain helps CFOs save cost and provide visibility across the financial processes.  

Preferably, they need to continuously analyse several metrics in real-time, including things like Days Sales Outstanding (DSO), to gauge data points, like Average Payment Delay to detect accounts that are most at risk of late payment. All things considered, automating AR provides CFOs with greater visibility across the entire process. 

The Bottomline:

AR Automation is the CFO’s code for unfastening growth and enhancing both predictability and scalability of the business. More financial visibility means an enhanced ability to forecast and plan. The automation of AR processes will help bring in higher efficiency and increased cash flow.