The accounting industry has evolved over the years. From adding machines and computers to calculators and smartphones, technological advancements have enabled accountants to enhance efficiency and deliver quick, accurate information to their clients.
Next up: Automation. It’s a word that frightens many and conjures up a future of a world run entirely by machines. That isn’t the case.
Rather, automation is quickly becoming the most cherished tool in an accounting professional’s kit. It’s especially useful when streamlining a company’s accounts receivable (AR) process.
Here are some ways automation benefits the accounting industry and why it must be embraced.
Accountants know how integral a strong, steady cash flow is to a business's success. A muddled AR process slows billing and payments and causes disputes between buyers and sellers. This suppresses cash flow and impedes a company’s growth.
Automating the AR process is an effective way to keep revenue rolling at a steady and reliable pace. It ensures accurate invoices are created and sent the minute a good or service is provided, along with timely reminders and payment alerts to ensure balances are paid on or before their due date.
Through features such as AutoPay and secure, buyer-managed payment wallets, AR automation makes it easier than ever for customers to pay their balances on time. This results in a lower Days Sales Outstanding (DSO) and equips businesses with the capital required to hire staff, modernize equipment, or amplify their marketing efforts.
Repetition has its advantages. It’s effective when learning or honing a skill and has been known to reduce stress and bolster confidence. In the workplace, though, repetition can lead to boredom. That’s especially true if employees spend each day performing the same time-consuming, mundane tasks associated with the AR process.
By handling data entry and invoice reconciliation, as well as sending out reminders and alerts, AR automation frees accounting professionals to carry out more strategic projects geared toward the growth of your business. This is crucial as the industry is fighting an accountant shortage. Accounting professionals must do more with less.
Errors can happen to anyone and at any time. However, they must be kept at a minimum when running an effective AR process, especially since mistakes can slow down payments, lead to customer disputes, and become more common as accountants increase their workload.
AR automation eliminates human error by automatically filling in important data and reconciling paid invoices, ensuring payments are linked to the correct client. Because automatically reconciled invoices are stored in a single, secure digital file, you don’t have to worry about receipts, work orders, checks, or any other documents being misplaced or accidentally discarded.
Some shy away from automation because they don’t believe they have the expertise required to use it. Others are concerned their company lacks the manpower, bandwidth, or resources to implement and use automation correctly.
The irony is that automation was created to make life easier for business owners and accounting professionals. It is intended to streamline operations, enhance efficiency, and save time. The right AR automation platform is so simple that it requires very little training and syncs to your existing accounting software in minutes. That way, you and your staff can start using it immediately.
Make sure the company providing you with the automation takes you step-by-step through the process and always has a knowledgeable staff member available should issues arise.
A constant critique of automation is that it removes humanity from human relationships. However, the opposite is true.
AR automation brings sellers closer to their buyers through online portals that enable real-time collaboration and communication through chat features and emails that can be sent with documents, pictures, or other helpful information. You also receive alerts whenever a customer who typically pays on time is past due, enabling you to proactively reach out to make sure they are okay. This is a great way to demonstrate how much you care about your customers and their success. They’ll appreciate that and will likely continue doing business with you.
AR automation removes all the friction from the payment process by empowering customers to store their payment method in a secure digital wallet. This allows them to make payments without re-entering their credit card and banking information each time.
AR automation effectively reduces and eliminates check usage and acceptance by offering payment options through the Automated Clearing House (ACH) network. That way, you and your customers avoid the dangerous pitfalls of check fraud, which has become a common form of financial deceit.
Calculators and software didn’t replace accountants and neither will automation. Rather, it enhances how accountants and their customers operate—less friction and more efficiency. It’s an easy and effective way to expedite payments and increase cash flow, enabling owners and their employees to focus more on the growth of their business and less on labor-intensive accounting tasks.
The willingness to embrace new technologies is a major reason why the accounting industry has adapted so well over the years. It’s only a matter of time before automation becomes a necessity rather than a luxury.
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