The Risks Of Failing To Automate Accounts Receivable
COLLECTION STRATEGIES ACCOUNTS RECEIVABLE AUTOMATION
For any business, the order to cash cycle defines the success of the organizations operational and financial objectives. To maintain and accelerate the collection process, accounts receivable automation is essential to transform the process from manual, paper-driven system to an effective and efficient automated one. Neglecting to automate the receivables process can lead not only to missed financial opportunities but also to multiple risks that can affect the operability of the business.
Many companies remain unaware of the potential issues associated with manual accounts receivable process: errors resulting from manual data entry; lengthy manual collections, reconciliations and other tasks; and potential delays as created by sorting through large files of invoices and postings. Automating accounts receivable requires reliable, cloud-based software solution that accelerates the invoice-to-cash process with an integrated platform.
Cash flow is crucial element for any size companies and an automated accounts receivable process can help increase cash on hand by expediting the collections process, streamlining customer onboarding, reducing the cost of time and labor, and ensuring timely deduction processing. Investment in software solution can give necessary automation tools to improve the order to cash cycle and provide better visibility into the financial data.
businesses that have yet to automate their accounts receivable process are also at risk for increased cost for managing accounts receivables. Manual methods require additional time and personnel resources to manually enter invoices and process payments, leading to increased labor costs. Moreover, manual delay issues can lead to non-compliance with supplier terms and discounts, which can significantly increase administrative costs.
In some cases, manual processes can lead to exposure of financial data security liabilities. Different levels of users often require access to customer financial data if they manage payments, reconcile invoices, or manage collections. Without proper security systems in place, companies can leave themselves open to increased risk of financial data being mishandled or making it available to third parties. Accounting software solutions provide access to sensitive data but also provide superior security so that financial information is handled safely.
The risks associated with manual accounts receivable system can be potentially serious for any business that fails to deploy an automated system. businesses that fail to recognize and remediate these risks could find themselves quickly behind with opportunities in the marketplace and increase their costs substantially. Automation is key investment to reducing risks, increasing efficiency, and enhancing cash flow.
