Risk Of Non-Software Solutions In Accounts Receivable
DISPUTE MANAGEMENT IN ACCOUNTS RECEIVABLE
For finance executives seeking modern, more efficient solution to accounts receivable (AR) processes, the concept of utilizing software may seem daunting. However, an overview of the risks associated with leaving AR processes to manual operations illustrates the benefits of transitioning to an automated and reliable protocol.
Software solutions provide straightforward, user-friendly platform that streamlines and optimizes the order-to-cash (OTC) cycle. Manually managing the collection of invoices and disbursement of payments is susceptible to increased costs due to the amount of labor required. With traditional, manual methods, accounts receivable is generally slow and labor intensive, leading to the potential for human error and delayed payment processing.
Software solutions are capable of quickly handling all AR data without issue and provide financial executives with valuable operational efficiency and cost savings. Account reconciliations, invoice processing, and payment disbursement are all handled expediently, accurately and with minimal effort. In addition, enhanced visibility of each individual process is available due to the availability of real-time, reports, dashboards and analytics, which provide comprehensive understanding of all accounts receivable transactions.
In comparison, manually-run solutions do not provide this level of insight. The presence of many people inputting data and updating records by hand result in lack of standardization. This can increase processing times while also presenting higher risk of errors due to improperly entered or outdated information. Additionally, legacy AR systems lack automation, creating longer time period between invoice creation and payment. Furthermore, manual recordings of data also affects the security of financial and sensitive data, as the risk of data exposure exponentially increases with non-encrypted manual storage processes.
Outdated methods of accounts receivable are not only liability for the accuracy of records and their timeliness, but can also be cost center. Employees tasked with recording and tracking the invoices may need to repeat tedious tasks and are more likely to make errors due to the complexity of traditional processes. Furthermore, manual operations require skilled and experienced staff, making hiring and training repeated process which increases all associated costs. Automated software solutions, on the other hand, allow for controller-level decisions and accurately record every transaction, ultimately leading to greater efficiency and cost-savings.
Ultimately, software solutions for accounts receivable offer vast advantages over manual methods, improving visibility and accuracy while decreasing time and money spent. Standardizing processes and automation of data entry provide finance executives with valuable insights into operations and, ultimately, allow them to make better informed decisions. Facilitating more accurate accounts receivable process is essential to reducing the risk of non-payment and extending payment terms.
