Examining The Risks Of Not Automating Accounts Receivable With Software
Automation Of Accounts Receivable Department
C-Suite executives face variety of difficult decisions while overseeing the financial health of their organization. However, when it comes to managing accounts receivable, there is little question that processes should be automated. Automating accounts receivable with software offers numerous benefits, including improved accuracy, reduced costs, streamlined process that reduces cycle time, increased visibility, and better customersatisfaction. Unfortunately, organizations that opt to not deploy order-to-cash software for automating accounts receivable put their organization in the position of incurring several potentially costly risks.
First and foremost, not leveraging the power of software for automation of accounts receivable can subject an organization to an unacceptable degree of financial risk. Accounting errors are inevitable when performing accounting tasks manually, and these mistakes can cause significant degree of financial strain when left unresolved. This can be especially devastating to cash flow and profits, as mistakes can lead to financial misstatements and possible fines when records must be restated in order to meet regulatory requirements.
Another major risk centers on the inability of manually managed accounts receivable to provide accurate analytics. Real-time data and analytics are essential to running successful business. Manual data entries are slow and inefficient, which dramatically limits the actionable insights your organization can gain from its accounts receivable department. With automated solutions, organizations can filter and process data more quickly, allowing their financial teams to realize the full value of their accounts receivable data.
Manual order to cash processes also present risk in terms of customersatisfaction. Having customer wait for supplier payments or worse, being called about payment is an experience that customers find frustrating and potentially deal-breaking. Automated solutions make it easier for customers to track invoices and maintain high degree of satisfaction in supplier relationships. Automated solutions also reduce the amount of human error, which customer feedback indicates customers find preferable.
Finally, managing accounts receivable manually can be extremely labor intensive. study from Positive Accounting conducted in 2014 discovered that not only is time and labor more difficult to track when managing accounts receivable manually, but it can take up to sixteen days to get customer payment through the door. Automated solutions speed up the accounts receivable process and save organizations precious time and money.
Automating accounts receivable is critical to the financial health of an organization and provides numerous strategic advantages. C-Suite executives who choose to maintain manual accounts receivable process in their organization risk encountering variety of costly inefficiencies and errors that can have disastrous financial and strategic consequences.
