Keeping an eye on the well-being of employees and departments within your business as a whole is thankfully becoming a higher priority for business leaders. The recent pressures of doing business during the coronavirus pandemic, coping with a global supply chain crisis, and not to mention the outbreak of impact of territorial conflicts and environmental disasters, has placed unprecedented stress on individuals trying to maintain a healthy work-life balance.
So, let’s cast an eye over one of the most critical business functions for maintaining healthy cash flow: the accounts receivable (AR) invoicing process.
The Importance of Heeding the Warning Signs of Invoicing Fatigue
It’s not possible to overstate the importance of invoice delivery and collection of payments to cash flow and liquidity. Anything that goes wrong with this process, or even just impedes AR process efficiency, should be flagged as a risk to optimal business performance.
It’s crucial to consider the well-being of AR teams. Burnout can result in health issues and, ultimately, valuable skilled staff may choose to leave your AR department, further impacting your ability to get invoices out and payments in quickly (and adding to the workload stress of those who remain).
Recruiting new AR staff incurs a time, cost, and stress commitment that no one wants – particularly when recruitment conditions are as challenging as they are at the moment.
The following 5 signs are an early indication that improvements should be made before there is a negative impact on cash flow and business performance.
Sign #1: Manual processes in invoice creation
Invoice production was traditionally a labour-intensive manual process, with print and post of paper invoices taking time to produce and send. Fast-forward to the 21st century and we see more and more businesses moving to electronic invoicing, or at least sending invoices by email.
However, this shift to digital hasn’t always resulted in a reduction in manual labour. Badly structured and rushed attempts to ”go digital” have resulted in some businesses simply replicating manual paper invoicing processes through digital systems.
A modern invoicing process should be driven by data from the ERP system, and the production of invoices automated where possible. Human involvement should be reserved for oversight, exception handling, and decision making.
Look for where time is spent in any manual steps to produce and send invoices. Explore AR automation solutions to streamline for enhanced efficiency and resilience – especially when dealing with a remote workforce.
Sign #2: Manual uploads to customers’ invoicing (AP) portals
Perhaps the most common gripe within an AR department is the need to manually upload, or re-key, invoices into customers invoicing portals. The drive to adopt electronic invoicing by accounts payable (AP) departments, due to the potential for dramatic cost savings and process efficiency gains, has shifted the responsibility for getting invoice data into the right format on to suppliers.
Any need to log into a customer’s AP portal and upload invoice data in the format they require can result in human error, queries, disputes, and payment delays.
If you find more and more customers require invoices to be uploaded manually, it’s time to look at ways to automate invoice uploads to AP portals. Save your AR team’s skills and time for more valuable work and save them from this repetitive chore.
Sign #3: Complex rules for what is sent to whom, when and why
Invoice delivery can be a complex process, with invoices needing routing to different individuals, or groups, depending on what was purchased, how much was purchased, and from where it was purchased. Small business owners may be able to rely on the knowledge of AR team members for what needs to be sent to whom, how and when.
However, this does not scale.
ERP systems need to mesh with electronic invoicing presentment and payment (EIPP) systems which can handle this rules-based delivery complexity automatically. Otherwise, it’s just a matter of time before the wrong invoice is sent to the wrong person in the wrong format at the wrong time – which can also open the door to risk.
If your AR department relies on individual know-how or complex systems to look-up rules for what goes where, when, how and why, then it’s time to explore options to lift this complexity off your team and automate the routing. You can find out more about this in our white paper on invoicing beyond an ERP system
Sign #4: Time spent chasing payments
Sadly, not all invoices are paid on time. In fact, 53% of the total value of all B2B invoices in Western Europe were reported overdue in 2021 (according to research by Atradius). Rising days sales outstanding (DSO) due to late payments has a negative impact on liquidity and cash flow predictability, hampering growth and placing businesses at risk.
Chasing payments is part of day-to-day operations for many AR teams, but how much of this can be automated or even avoided through timely reminders ahead of payment deadlines? If your team is spending an increasing, or uncomfortable, amount of time chasing payments, take a look at options to streamline and automate this process, or even outsource it as part of a managed service agreement.
Sign #5: Cash flow forecasting and reporting stress
Following on from the uncertainty in invoice payment timeframes, the ability to accurately forecast cash flow from month-to-month can be negatively impacted. Financial leaders need accuracy in cash flow forecasting to make decisions on spending without putting liquidity at risk.
Cash flow and payment metrics should be easy to track and provide a good degree of confidence for financial decision making. EIPP platforms and AR automation solutions can streamline reporting workflow and provide extra visibility and assurance to support cash position insight.
The Antidote to Invoicing Fatigue
At Corcentric, we help businesses automate and streamline all aspects of the accounts receivable process – from EIPP to a fully-managed AR service.
Get in touch to find out how we can address any challenges you are experiencing across invoice production, distribution, and payment collections. We can even work with you to ensure invoices are paid in timeframes as short as 15 days, and guarantee these payments – removing all cash flow uncertainty and bad debt from day one!
Don’t struggle with painful invoicing processes, find out how you can avoid invoice fatigue and make a real difference to cash flow, liquidity, and the mental health of your AR teams today.
Get in touch to find out how Corcentric can quickly and easily help you improve your invoice delivery, without the cost and time of a lengthy internal IT project.