Optimizing The Automated Accounts Receivable Solution: What Financial Executives Need To Know


Enhancing the order to cash process is one of the most valuable initiatives that can be undertaken by finance executives. Automating the accounts receivable solution unlocks significant cost savings, improves the efficiency of the process, and can even help provide greater insight. For these reasons, having grasp of the best methods for optimizing the automated accounts receivable solution is an important part of any successful executive’s skillset.

In order to understand the implications of such solution, it is important to understand exactly how the process works. In an automated accounts receivable system, invoices are digitally generated and electronically sent to customers for payment. Payment is then received and the cash is immediately recorded for reconciliation. All of these functions can be seamlessly integrated into the existing accounting system, eliminating the need for duplicate data entry.

Before undertaking an automated accounts receivable solution, however, financial executives should first identify the benefits they are hoping to achieve. This will ensure that the system they select meets all of their needs. The most common reasons for implementing an automated accounts receivable system include cost savings, improved accuracy, and increased efficiency.

Once the desired benefits are identified, it is possible to begin evaluating the various software solutions on the market. Some important factors to consider when selecting solution include whether it is cloud-based or requires an in-house installation, system compatibility, scalability, and pricing. Furthermore, executives should assess the security offered by the product, since personal customer information must be handled with caution.

After choosing the right software, the first step to implementing the solution is to configure the settings for processing incoming payments. This includes specifying payment terms, order review and validation processes, as well as setting up payment processors. It is also necessary to set up the existing back-end systems, such as the accounting system, to ensure that all of the payments are properly recorded.

Once the incoming payments have been configured and existing systems have been integrated, the solution can be tested. Executives should set up test payments and input fictitious customer data to ensure that the automated accounts receivable solution is behaving correctly. After the testing is complete, customers should be informed of any changes, such as automated emails being sent out when invoices are generated.

Finally, the automated accounts receivable system should be monitored to ensure its accuracy and responsiveness. Regular reports should be generated to track the performance of the system, and any errors reported should be investigated and corrected. Furthermore, financial executives should review the payment reports on regular basis to verify that customer payments are being processed accurately and efficiently.

By following these steps, it is possible to successfully implement an automated accounts receivable system and reap the numerous benefits that such solution provides. Improved efficiency, accuracy, and cost savings are some of the primary advantages of implementing an automated accounts receivable system, and financial executives can rest assured knowing that their organization is achieving its maximum potential.