Reduce Mistakes With AR Automation

Mistakes can happen to anyone at any time. When handling finances for B2B companies, however, it is crucial to keep errors to a minimum if you want your clients to trust you.

Automating the accounts receivable (AR) process is an effective and cost-efficient way for accountants to limit mistakes and keep their reputation intact while saving you time and money. It also ensures your employees won’t get bored by doing the same simple assignments each day.

Here are five ways AR automation helps reduce or even eliminate accounting errors:

1. Eliminates human error

Running an efficient AR process requires precision and the completion of many repetitive tasks that can lead to boredom and a lack of concentration. That is a recipe for mistakes and customer disputes, 49% of which are caused by incorrect purchase order information.

Data such as address, customer ID, balance amount, and due date is entered automatically through AR automation, eliminating the risk of typos, omissions, and duplicates, providing your customers with the information required to make prompt payments while enabling your employees to work on different, more strategic projects.

2. Reconciles invoices

Invoice reconciliation is essential to the success of your accounting firm. If you have a hard time keeping your finances in order, why would customers let you handle theirs?

The right AR automation software platform performs quick and accurate invoice reconciliation for you, enabling you to better manage your records and send out alerts when discrepancies arise, helping you arrive at a swift resolution. AR automation reconciles invoices in a secure, tokenized digital platform with user-controlled access rather than relying on paper receipts and checks that can be discarded or filed incorrectly.

3. Ensures timeliness

Receiving payments past their due date can be frustrating and negatively affect cash flow. However, your customers may not always be at fault—a recent survey found that 11 percent of customers who paid late never received an invoice.

Automation ensures invoices are sent immediately after a good or service has been provided, giving your customers plenty of time to pay a balance. These invoices are sent digitally, so you won’t have to worry about them getting lost in transit or sent to the wrong address. You don’t even need to buy stamps anymore.

With features such as buyer-managed digital wallets and AutoPay, AR automation software enables your customers to pay invoices as soon as one is sent their way.

4. Grows along with you

Acquiring customers and driving more business can be extremely exciting and rewarding. However, it can also overwhelm undermanned staff and create errors and delays.

Automation seamlessly handles the accounts receivable process no matter how many more invoices you receive each day, week, or month. It eliminates the risk of employee burnout and bottlenecks that bring operations to a halt. Because your AR process is automated, you don’t need to hire new staff to help run it. Rather, your new hires can devote their time to serving customers and growing your business even further.

5. Enhances cash flow management

Mistakes aren’t limited to typos, omitting information, or sending out duplicate invoices. They also include poor financial decisions due to insufficient accurate and timely data.

AR automation provides access to crucial metrics like DSO (Days Sales Outstanding) and AR aging in real time, enabling you to view up-to-the-minute statuses on invoices and outstanding balances. Also available is a graphical representation of payments received that tracks cash flow and your customer's preferred payment methods. This enables you to monitor payment types and discover if a heavy reliance on check acceptance is slowing your AR process and driving up DSO.

Decisions regarding the future of your business shouldn’t hinge on estimates. AR automation ensures you have the access required to make intelligent, well-informed choices that lead to long-term profitability.

Conclusion

Perfection is unattainable, and errors are always going to happen to even the sharpest of eyes. Integrating the right AR platform, however, is a surefire way for accountants to minimize mistakes while helping your firm run more efficiently and preventing your employees from getting weighed down with mundane tasks.

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