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Six ways accounts receivable automation software can improve your order-to-cash process.

If your accounts receivable team is working harder than ever to collect payments and preserve cashflow, it may be time to automate your Accounts Receivables management.

Here are six things you can start doing today to improve team productivity and reduce Days Sales Outstanding (DSO) – and how Accounts Receivable automation software can help.

1. Evaluate your Accounts Receivable status.

To make informed decisions and prioritize collection efforts, it helps to understand which customers present the greatest risk of nonpayment. If you are not already reviewing your aging balance, at-risk cash and other indicators of your customers’ financial well-being, now is the time to start. It is also important to monitor your order-to-cash process daily, comparing your team’s cash forecasting against actual daily performance.

Automated Accounts Receivables make all these tasks easier. This software generates key performance indicators (KPI) and dashboards make it simple to conduct risk analysis and review results by industry, payer ratings, past-due balances and other customer categories. These findings can help you plan and prioritize customer communication and collection efforts to minimize your uncollectible accounts.

2. Adapt your collections strategy.

To maximize the receivables you collect, you will need to prioritize your Accounts Receivable activities around specific goals. Many organizations begin by targeting the highest past-due balances and the customers most at risk for nonpayment or becoming an uncollectible account.

Automated Accounts Receivables can improve the efficiency of your outreach. For example, if your goal is to improve DSO, Accounts Receivable automation software can provide alerts and reports that trigger collection calls or emails sooner. Through the power of artificial intelligence (AI), your team can also gain valuable customer insights you can use to tailor collections strategies to address individual client needs. Payment date prediction tools can also help you know when to schedule follow-up calls and make other adjustments in the order-to-cash process.

3. Facilitate a shift to electronic payments.

If your business does not yet accept credit cards and other forms of electronic payment, now is a good time to add them. When customers receive and pay invoices electronically, you will not only cut Accounts Receivable administration costs, but also reduce invoice delivery time, giving customers more time to process, approve and resolve any invoice-related issues.

An Accounts Receivable automation software also puts invoice delivery status, collections reports and other key data on dashboards and reports, making it possible to anticipate payment issues, resend invoices, if needed, and track the overall order-to-cash process.

4. Offer customer-friendly payment terms.

In addition to adding electronic payment alternatives, you can offer early payment discounts to motivate customers to pay invoices sooner. You may also consider allowing some customers to spread their debt over time so they are better able to meet their payment obligations. Accounts Receivable automation software can be designed to offer autopay plans that enable customers to pay in installments, creating a win-win solution for both you and your customers.

5. Manage customer relationships.

The best way to avoid bad debt is by developing the ability to anticipate it and in turn minimize uncollectible accounts. That takes both proactive Accounts Receivable management and strong customer relationships. Both benefit from automated Accounts Receivable solutions that use analytics to assess and predict customer payment performance as well as communication tools that make it possible to send automated messages to customers with high outstanding balances or that belong to high-risk groups.

You can set the parameters of the customer base you wish to reach, and the Accounts Receivable automation software – which functions similarly to customer relationship management software -- makes it easy to stay in contact with them. Automated communications free up Accounts Receivable staff time to focus on one-on-one communication with at-risk customers and other important priorities.

6. Encourage internal collaboration.

Effective Accounts Receivable management requires teamwork. Collaboration among team members is necessary to share information and resolve issues, particularly when a customer asks for an installment payment plan or disputes a charge.

When you automate your order-to-cash process, you can create, assign and monitor tasks like these in your Accounts Receivable automation software. Management and other stakeholders can also be kept up-to-date with online tools for overseeing team performance and confirming that the collections strategy is applied correctly. You can also use Accounts Receivable process automation to follow team activity and balance employee workload.

The bottom line:

Getting paid is fundamental to the success of every business. By automating your accounts receivable process, you will not only reduce Accounts Receivable administration costs, but also bolster cash flow. It enables your Accounts Receivable staff and management team to work smarter, not harder. For many, it is essential to their organization’s future.

Discover how an automated integrated receivables solution can remove manual bottlenecks, address customer payment needs and protect cashflow.

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