Keeping a balanced and steady cash flow for your business can be tough. And it’s not made easier by the challenges facing the economy – inflation, political instability and a rising cost of living. When your customers are battling with one or all of these factors, it can quickly become your problem.
It makes sense, then, to stay on top of your incoming and outgoing monies with smart accounts receivable software which allows you to keep funds flowing smoothly.
But there’s far more to a healthy business than just numbers on a spreadsheet. Let’s take a closer look.
What are accounts receivable?
Accounts receivable – or AR for those in the know – is all the money that customers owe you for the products you’ve sold or services rendered. This becomes accounts receivable when you’ve invoiced them, but they’ve yet to pay. The total value of your accounts receivable is listed on the balance sheet as current assets, even if it’s work that you’ve done for clients on credit.
Incoming funds are the start of a healthy cash flow, right?
Keeping a healthy business with accounts receivable software – the benefits
This software certainly appears to be useful for streamlining your business functions, but there are some not-so-obvious benefits to consider too.
1. Cost savings
Getting paid the funds due to you gets more expensive as the admin costs escalate. At the end of the day, it comes down to money, and while you’ll have to pay for your accounts receivable software, you’ll be benefitting financially from the features and improved systems along the way.
If you could quantify some of these savings they would include:
- Decreased reliance on accounting staff
- Savings on salaries and overtime
- Less time spent on menial tasks and more time spent on strategy and customer service
- Lower collection costs due to fewer errors and faster turnaround times
- Reduction in the OTC cycle
- Reduced risk of costly security and compliance issues
Businesses that want to remain competitive need to keep a close eye on minimising inefficient processes and needless expenditure.
2. Faster payments
Faster systems mean faster, more accurate invoicing. It’s no secret that late invoices result in late payments, and also sets an unhealthy precedent with your customers which communicates that delays are not an issue. In a world where you have to shout the loudest to get paid first, this is not the impression that you want to leave with your customers.
Slogging away on outdated spreadsheets and manually entering client information is mind-numbing, time-consuming and often riddled with errors. Invoices can be inaccurate resulting in frustrated customers and delayed payments. Just a few of these issues – especially for smaller businesses – can tip the cash flow balance negatively and start an unfortunate snowball effect. Not only can this affect your income, but it can also impact your forecasting, budgeting, profit goals and business growth.
Did you know that it’s estimated that by sticking with a paper-based system you’re adding around 90 days per invoice? That’s a lot of time wasted! You want to decrease the gap between work done, invoice sent and payment received.
3. Better customer service
When you have people inputting data manually, there’s bound to be an error somewhere along the line. And, if you’re invoicing customers for the wrong amount, or for the wrong work carried out, then you’re going to end up with dissatisfied customers who might not return to you for a second time.
Accounts receivable systems that can automate some of the more repetitive tasks allow for a reduced margin of error, improved accuracy and swifter turnaround times. This means a better customer experience which leads to customer loyalty. (Plus it gives your competitors less opportunity to poach your customers.)
Why spend your time on internal system battles? Rather focus this time on enriching your customer experience and creating loyal business fans.
4. Improve Employee Retention
Your finance and customer care team are critical to your business – no matter the size. And it is likely that any employee will stick with your company for a longer time if they enjoy their job. However, as you manage more accounts, it becomes increasingly difficult to manage everything manually. It’s impossible for your team to produce the kind of results you want if they’re overworked and stressed out because you aren’t providing them with the necessary tools.
Logically, you will need less staff if you have a good accounts receivable system, and anyone you hire will have a much better working experience. There’s no doubt that your business will benefit from their long-term loyalty.
5. Standardise processes
Another great benefit of using accounts receivable software is that it unifies all the data sources and eliminates confusion. Everyone is working off the same information, leading to increased invoicing accuracy. Need to access any information related to your accounts receivables? This can be done with a simple search rather than having to sift through endless paperwork.
This standardisation of the accounts receivable process makes for a much more transparent and efficient process. And it undoubtedly adds to improved employee satisfaction.
Any new software will come with its challenges, which is why it’s important that your vendor provides you with the necessary support to keep operating at all times. Ask if they’re able to provide free, unlimited, 24-hour support so that you’re enjoying all the benefits of this automated software.
If you’re not convinced, just check online reviews and you’ll quickly have your answer about customer support. Start enjoying the many advantages of accounts receivable software today by getting in touch with industry leaders, Omni Accounts, today!