The Perils Of Not Utilizing Automated ARCollections


For finance executives looking for software solution to optimize accounts receivable (AR) collection efforts, it can be tempting to attempt to go it alone and avoid the costly expense of an automated collections system. However, the potential risks associated with such decision can have disastrous consequences.

A strictly manual approach of sporadic emails and phone calls to dun debtors on case-by-case basis may feel efficient and more cost-effective when an executive is considering the immediate cost savings of foregoing software solution. However, such an approach fails to recognize the chance of greatly reduced profits due to the potential delinquencies and defaults that may occur if customer payments continue to fall through the cracks.

Not only could an automated software solution provide an overarching structure to ensure that all customer payments are continually monitored and tracked, but it would also give executives window into their customer?s unique payment considerations and how best to proceed in order to ensure prompt and complete payment. With unified view of customer financial data, particularly with robust enterprise resource planning (ERP) system, invaluable insights can be gleaned about customer payment trends and preferences, giving collections teams?and their executives?the ability to craft more informed, tailored strategies to retrieve any overdue payments.

Additionally, an automated collection system allows for seamless document sharing capabilities with customers, saving companies time and money by eliminating the need for envelopes, stamps, and physical paperwork. The utilization of electronic payment capabilities further enhances efficiency, simplifying the payment process for customers and eliminating long waits for checks to arrive in the mail.

In the era of Big Data and ever-evolving analytics services, an in-depth, objective assessment of customer payment histories and trends is critical aspect of the maximizing an organizations return on investments. Through detailed arrears monitoring, analytics of customer behaviors, and automated payment processes, executives can rest assured that their payment cycles are on track and that their accounts receivables are adding to their bottom line.

In summary, opting for an outdated, manual approach to AR collection may seem expedient and frugal, yet the potential profitability that can be unlocked through the right automated order-to-cash software far outweighs any short-term cost savings. Executives that have made the wise investment in order-to-cash software have been rewarded with increased efficiency, better customer relationships, and higher margins.