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The CFO’s Guide to AR Automation

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CFO and AR staff studying AR automation software on a desktop computer

Accounts receivables (AR) are a critical component of every business. The AR team is responsible for sending out invoices, billing customers, processing payments, and following up on payments due. The efficiency with which these functions are carried out directly influences the business’s cash flow.

Multiple studies show that automating AR speeds up collections processes, improves cash flow, and consequently, helps the business invest in innovation and growth.

How prevalent are manual AR processes?

Studies show that many businesses continue to rely on manual AR processes. A 2017 Small Business Trends study showed that manual processes such as Excel and spreadsheets are used by 84 percent of businesses. A 2021 report reveals that manual AR processes are still used across industries.

The study found that manual processes are prioritized by:

  • 52 Percent of Construction Firms
  • 35.2 Percent of Technology Firms
  • 43.6 Percent of Healthcare Firms
  • 31.7 Percent of Advertising Firms
manual ar process by industry infographic

Key Challenges of Manual AR Processes

Inefficient payment acceptance

Manual processes slow down collection processes significantly. Companies across industries experience longer collection cycles when they rely on manual AR processes.

Dun & Bradstreet’s Q1 2021 report highlights that 10 percent of aging dollars of 30 out of 230 industry segments are 90+ days past their due date. The PYMNTS research shows that on average, firms that use manual methods take 25.3 days to follow up on payments. Firms that have not automated their AR processes have 18 percent longer collection terms as compared to businesses that have.

Domino effect

Inefficient payment collection has a domino effect on the business that goes beyond mere inconvenience.

  • Poor cash flow
    Delayed payments are typically the top cause of poor cash flow for small to midsize businesses. An earlier survey in Australia suggests that 90 percent of small businesses face cash flow issues and go broke due to delayed payments. The 2020 MYOB Business Monitor found that 38 percent of Australian SMEs (small to medium-sized enterprises) feel financially stressed as a result of late payments, and 42 percent are concerned about cash flow.
  • Higher administrative costs
     In addition, businesses incur increased administrative costs linked to debt collection that involves:
    • Colelction calls
    • Reminder letters
    • Receivables emails
    • Human resources dedicated to late account collection
  • Impacts productivity
     A survey of eleven countries including Australia by a consulting firm, Plum, found that the process of manually following up on payments is extremely time-consuming. On average, 15 workdays are lost each year in chasing after late payments.
  • Impacts innovation and growth
    According to Plum’s researchers, 7.5 percent of invoices are written off ultimately as bad debt. A 3-day delay in invoice due can take away $115,000 from the working capital of a business with a $10 million yearly turnover ($10 million divided by 261 working days)

    With cash getting locked up in delayed payments, the potential working capital gets frozen. This, in turn, puts financial brakes on innovation investment.

    Companies that are affected by poor cash flow are unable to invest in expanding into new areas or leverage new business opportunities. Locked up cash also means firms are unable to pay their suppliers and staff on time. This impacts the inputs necessary for scaling up production.

Barriers to payment collection

A recent industry survey found that one of the major barriers to following up on late payments is the lack of dedicated resources. Businesses also report a lack of personnel and staff time as common barriers to payment collection.

A significant proportion of companies find it difficult to broach the payment issue with their clients as they fear doing so could harm their future relationships.

AR automation: The strategic lever

Your ability to manage cash flow and consequently, business productivity and growth, hinges on the efficiency of the accounts receivable activities.

Many CFOs are strategically deploying AR automation to streamline invoicing, payment processing, acceptance, and collections management.

With digital processes for invoicing, AR automation effectively handles labor-intensive AR processes such as deductions, while accurately capturing and prioritizing collections efforts.

According to a recent industry study businesses that use AR automation technologies experience a 23 percent improvement in payment collections compared to firms that use manual methods.

As per research:

  • 75 percent of firms reported that AR automation enabled them to offer superior customer experiences
  • 87 percent of businesses that employed AR automation observed improvements in their overall payment process speed
  • 79 percent of automation adopters agree that it improves team efficiency
  • 89 percent of firms experience faster processes
ar automation improvement stats

Case Study: Aline Services

Aline Services is Australia’s largest supplier of a comprehensive range of pumps and pumping systems.

Since its inception in 1995, the business has provided pumping solutions to the commercial and residential market with a strong focus on client relationships.

With a progressive outlook, Aline Services pays meticulous attention to designing, engineering, and customizing equipment to the exact requirements for property developments, industrial estates, commercial properties, hospital infrastructure, and mining projects. With a growing client base, Aline Services now caters to customers across New South Wales, Queensland, Northern Territory, ACT, South Australia, and Pacific Islands (Including New Zealand).

As the business scaled, the management wanted to move away from the manual process of receivables collections and automate the process. Having access to data to predict cash flow was also a key focus area for the firm.

The Challenge of Legacy System

At Aline, the process for collections was manual and outdated. In addition, the AR officer handled a large number of collection-related calls and emails during the day, which led to frustration and resulted in the officer quitting the company eventually.

Realizing that the current processes were not sustainable or efficient, the CFO looked for an effective solution to:

  • optimize the use of resources by reducing workload
  • reduce overdue debtor days
  • speed up cash recovery
  • save time and cost related to administrative tasks

The finance and AR team at Aline searched for the right solution to solve their key AR challenges and decided to implement ezyCollect’s AR Automation and Payment platform.

Aline’s team found the following benefits valuable:

  • Best-in-class automated workflow: Automated workflow streamlines communication making it possible for Aline Services to politely and persistently collect money round the clock.
  • Simplypaid portal: Digital ‘Pay Now’ buttons enable customers to enter the payments portal where they can query, pay one or more invoices, part-pay, and apply for our finance solution to complete payment. Simplypaid accepts Visa, Mastercard, and American Express.
  • On-time payments: With a clear call to action integrated with invoices and reminders, Aline Services is able to invite online, on-time payments.
  • Reminder emails: Reminder emails become checkouts with no extra logins required. As customers receive the reminder email, they can click to ‘Pay Now’.
  • Mobile phone prompts: Customers receive payment prompts straight to their mobile phone which makes it easy to collect payments 24/7.
  • Single window dashboard: The dashboard offers a 360-degree view of customers, invoices, online payments, and payment allocations.

Tangible business impact

With its automated workflow for communications, SimplyPaid for collection payments, and a single-window dashboard that gives an overview for invoices and customers, ezyCollect ticked all the boxes for the ideal solution.

Aline Services implemented ezyCollect in March 2019 and experienced a dramatic reduction in their outstanding debtor days and improved cash flow.

Specifically, the real business impact of implementing ezyCollect’s automated AR are:

  • Over 50 percent reduction in overdue debtor days since implementation. outstanding debtor days at 6 days.
  • 99 percent cash recovery rate that enables the firm to make strategic investments in business growth
  • With an average saving of 30 hours per month on sending emails alone, the team could now focus on other value-adding tasks in cash flow management.
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How to Choose the Right Accounts Receivable Automation Software

How to Choose the Right Accounts Receivable Automation Software

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There has been a significant shift in the functioning of businesses in recent years. As more and more people started working remotely, the challenges of cash flow management and working capital optimisation have become apparent.

Legacy accounting systems have also become ill-suited for managing business continuity in such a scenario. These systems could not provide accounts receivable teams visibility, transparency, and flexibility for cash management and payment collection. As a result, businesses worldwide have started adopting modernised accounts receivable (AR) processes.

Manually managing accounts receivables is not only labour-intensive but also quite time-consuming. A comprehensive AR automation software will facilitate the digital transformation of your business, so it is crucial to choose wisely. 

In the following sections, we will look into the challenges of completing AR processes manually. We will also provide a step-by-step guide for narrowing down the best AR automation software for your business. 

Contents

  1. Challenges of Manual AR Collections
    1. 2.1 Inefficient cash flow management
    2. 2.2 Data transparency issues
    3. 2.3 Ineffective credit management
    4. 2.4 Payment collection
  2. Step-by-step guide on choosing an AR automation software
    1. 3.1 Step 1: Take time to understand the pain points of your team
    2. 3.2  Step 2: Research for new AR automation software that aligns with your needs
    3. 3.3 Ensure your success after implementation
  3. Unlock better Accounts Receivables collections

 

Challenges of Manual AR Collections

Most businesses have an Accounts Receivables policy in place, which lays down the ground rules for payment collections and the process of billing. However, in executing this AR policy, most businesses make mistakes. Small mistakes can lead to overdue invoices, resulting in cash flow bottlenecks that drain the capital needed to grow the business, hire new employees, and buy new equipment.

Here are some of the other challenges of an inefficient manual AR collection process –

1. Cash flow management

Tracking how much money is coming in and out of your business requires analysing cash flow changes which can be time-consuming. Cash flow management involves the following:

  • Tracking and posting payments
  • Management of the payment information
  • Applying cash

It takes considerable effort and time to send invoices and receive payments using manual processes. On top of this, if the customer does not pay on time, the wait time can put additional stress on your budget and cash flow. 

Reconciling payments with a manual AR process is another challenging aspect of cash flow management. Because the payment information comes in different file formats, it must be matched manually with corresponding payments. Your team might have to spend hours synchronising data and reconciling it with outstanding accounts receivable. Even if you hire additional staff for the AR processes, a manual system will always be error-prone and sluggish. 

Adopting an AR automation software is crucial if you want to see efficient reconciliation. AR automation facilitates the automatic sending of invoices on a scheduled date, so you don’t have to worry about forgetting to send invoices on time. It also includes payments automation that automatically reconciles payments and attaches them to the correct invoices.

2. Data Transparency

Another time-consuming task in the Accounts Receivable (AR) process is investigating and resolving disputes around unexpected payments. The manual management of the process makes it all the more difficult. Using an AR automation tool will help you avoid all these issues.

AR automation is always data-based, so internal teams and customers get complete transparency and visibility into the agreed and owed amounts. Thus, the automated platform will essentially work as the single source of truth on information about all open receivables. Minimising errors and avoiding data duplication contribute to the timely resolution of any form of dispute in collections.

3. Credit management

As a business, you would always want to ensure that you extend credit to customers who are diligent with their payments. However, evaluating the right people for credit extension requires visibility into their behaviours and payment history. Determining the creditworthiness of individuals can be another time-consuming task and costly if you are to hire credit agencies to do it for you. 

An automated AR system helps manage credit risks. With Modern AR automation platforms, you can access business credit scores within the system without subscribing to a separate credit reporting service. This will allow you to look into the customer’s payment behaviour – are they usually a little late on a payment? Do they pay the full amount? Equipped with the necessary information, you will be able to decide which accounts need closer monitoring and which ones need more lenient handling.

4. Payment collection

Another major challenge with manual AR collections is chasing the customers for payments. The traditional methods of collecting payments require a lot of time, energy, and resources. Your AR teams would have to send payment reminders to the customers through dunning letters or by calling them. 

Besides distracting your team from other high-value activities, repeated calls and emails can also sour your relationship with the customers. It is essential to work smarter using AR automation software in such a situation. Rather than hounding all your customers, AR automation software will guide you to pursue the most at-risk accounts. Modern AR automation also integrates with online payment platforms so your customers can pay you quickly through multiple digital payment options. The more you lessen the friction on how and when customers can pay you, the easier it is to receive those payments.

 
Related blog post: Modernizing B2B Payments For the New Normal
 

AR Software tips 2

Step-by-step guide in choosing an AR automation software

Choosing the right AR automation software will help you overcome the challenges mentioned above. To derive a better and quicker return on investment (ROI), you should ensure that your chosen AR automation tool can meet all your unique requirements. Here are the basic steps involved in selecting the best AR automation software for your business.

Step 1: Take time to understand the pain points of your AR team

Before you start researching the various options for AR automation software, it is important to first connect with the team members who the new solution would directly impact. 

The first step in choosing the right AR automation tool is to understand the main challenges faced by your team members. Understanding their requirements will help you set clear objectives about what you want from an AR automation tool. It would help if you also considered any existing tools your teams and colleagues use to ensure that you do not duplicate the effort. You will also be able to find out why the current solutions cannot meet the needs of the teams.

Here are some critical questions you can ask in this step:

  • What are the major bottlenecks in the AR process?
  • Are a significant number of clients turning bankrupt?
  • What is the error rate in reconciliation?
  • How much time is spent on invoicing?
  • How are collection calls made?
  • How much is your business losing because of these bottlenecks?
  • What issue would the team like to resolve with the new AR solution?
  • Are the current AR-related issues because of a gap in knowledge, technology, etc.?
  • Who are the other internal stakeholders included in the evaluation process?

With these questions, you will identify which AR processes need to be automated most urgently to improve the system’s efficiency.

Step 2: Research for new AR automation software that aligns with your needs

Once you have identified the gaps in your AR process, you need to look for vendors providing AR automation solutions that will help you plug those gaps. Good AR automation software solutions will allow you to automate the AR workflows while also providing options for customisation. 

Key features to look for in AR Automation software:

  1. Auto-generation of invoices and auto-delivery of invoices and reminders via emails and SMS.
  2. A digital payment platform for your customers that is accessible 24/7
  3. Option to process multiple payment methods like checks, direct debits, and credit cards.
  4. Facility for customers to schedule payments or pay instalments.
  5. Tracking the mature receivables categorised based on the number of days outstanding.
  6. Automatic ranking of outstanding accounts (based on amount and days overdue)
  7. Online credit application for efficient client onboarding
  8. Credit score insights to help you plan your next course of action in extending credit terms to customers.

When selecting an AR solution from the various options available, examine the following:

  • Whether the AR solution aligns with your values and unique goals.
  • Whether the AR solution prioritises customer experience in the process.
  • Whether the AR solution provider has any previous experience in your industry or type of products.
  • Does the AR solution provider understand the regulations that will impact your business?
  • The strategic investment outlook of the AR solution provider for the next 3-5 years.
  • Will the new AR system integrate easily with the other IT systems in the company (and those of the partners’ too)?

Download the CFO's Guide to AR Automation

Plus, get access to our toolkit of free eBooks, guides, templates and other resources.

Download the AR Toolkit

Step 3: Ensure your success after implementation of the new AR solution

While choosing a new AR automation solution, you also need to consider what your partnership will look like post-implementation.

AR Software post-implementation checklist:

1. Customisation options

 There can be times when a one-size meets all AR solution will not work for your company, especially when the existing systems are complex. To get the maximum value from your AR process, you need to find a solution that comes with customisation options.

2. Excellent customer service

Another critical thing to look for is your software provider’s track record of excellent customer service. A provider committed to improving your experience with the software and your interactions with them is a big part of the equation to ensure your success with AR automation.

Unlock better Accounts Receivables collections with ezyCollect.

If you are looking for a smarter way to manage your B2B accounts receivables processes, ezyCollect AR Collection Software is your choice. ezyCollect’s robust system will help you get paid faster while accelerating your cash recovery rate.

Book a demo today, and let our AR automation experts walk you through solutions for your business.

The Importance Of Financial Reporting And Analysis

The Importance Of Financial Reporting And Analysis

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With the End of Financial Year (EOFY) fast approaching, SMEs are now starting to prepare financial reports. But more than a mandatory report to be submitted to the taxation office, financial reports play a critical role in building a successful business.  Financial reporting and analysis offer insights into financial data that will help you make better business decisions, eventually improving the business’s financial performance.

We’re providing you with a comprehensive guide to help you understand how crucial financial reporting and analysis are to your business. In this article, we will explore the importance of financial reports and how they benefit different business stakeholders.

What is Financial Reporting?

Financial reporting is a standard accounting practice that documents the company’s financial data. This data helps companies understand their financial health and performance in a specific period. Based on the report, they can make informed business decisions.

Financial reports are useful for businesses and for, investors and banks. Based on these reports, an investor or a bank invests or gives loans to a company. Suppose you plan to expand your business, and a bank will grant a loan based on your company’s financial report. If the company is financially healthy, then you can expect a loan for your business expansion.

How are financial reports generated?

The use of spreadsheets for financial reporting is widespread across businesses worldwide. However, spreadsheets can fall short of capabilities to generate efficient financial reports as a business grows and more users, data, and formulas are added to the reports. Financial reporting has become more efficient and sophisticated thanks to digital technology.

More and more businesses are now adopting the use of ERP platforms to streamline their accounting, automatically generate financial reports and even provide data-backed insights. Integration with other solutions, such as Accounts Receivable automation, further improves accounting software’s capabilities to create fast and accurate financial reports.

Types of financial reporting

1. Income Statement

An income statement or profit and loss statement essentially show a business’s loss or profit during a specific period. It’s a summary of key sales activities, costs of production, and any other operational expenses within the accounting period. This statement aims to understand if the business is making any money or suffering losses.

2. Balance Sheet

A balance sheet provides an overview of a company’s overall assets, liabilities, and stakeholders’ equity. Broadly, the balance sheet reflects the financial health of a company. By analyzing this sheet, the company’s management can see where the business is heading.

The balance sheet is not only useful for the management but also for investors. By assessing the balance sheet, investors can form an opinion on whether to invest in a specific company or not. The sheet has all the vital information like the company’s finances and other data to help them make an informed investment decision.

3. Cash Flow Statement (CFS)

A Cash Flow Statement (CFS) documents the amount of cash coming into the company and the cash flowing out of the company during a specific period. The statement includes elements of both the income statement and balance sheet. CFS is critical because it tells the business owner or management about the company’s cash position. Businesses need sufficient cash all the time. They require cash to pay expenses, loans, taxes, and equity purchases. A cash flow report tells if the company has sufficient cash for carrying out such activities.

Now that we have seen what financial reporting is let us explore some benefits of financial reporting.

 

financial reporting benefits

Benefits of Financial Reporting 

1. Helps In Effective Debt Management

The poor management of debts can be disastrous for any company, whether small or big. When it comes to debt management, several financial reporting platforms are available that will help you track your company’s current assets, current liabilities, accounts receivables, and liquidity. AR automation software provides data on your customer’s credit scores that can help you gauge how to manage debts effectively.

2. Trend identification

Financial reporting helps identify seasonal trends or cycles that can help you plan ahead. Understanding trends and the historical context of numbers empowers you to improve your business’ performance effectively.

3. Real-time insights

Updated financial reporting provides you with real-time insights into your financial health. Thanks to advancements in technology, access to real-time data are possible and provides you with the ability to take action to either correct issues or take advantage of opportunities. Cash Flow statements, for instance, provide you with information about the company’s availability of funds which will help you ensure you always have money to cover payments.

4. Liabilities tracking

Managing liabilities is paramount for any business, especially if the business is looking to apply for a bank loan for expansion. Defaulting loan payments is seen as a red flag by banks that can reject the application for a loan. A financial reporting template allows for exploring current liabilities. Based on the data, the company can determine if it is required to reduce liabilities before applying for a bank loan.

5. Compliance

Complying with the rules is essential for the survival of any business. Maintaining updated financial reports help your business comply with the regulations set by the governing body.

6. Cash Flow

Management of cash flow is essential to any business. If you face challenges with the cash flow, financial reporting metrics will let you know the root cause of the problem.

With benefits covered, let us get to the crux of the topic – The Importance Of Financial Reporting.

Download the CFO's Guide to AR Automation

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Why Is Financial Reporting Important?

Financial reporting offers a wealth of insight into financial data that helps make better business decisions. Apart from this, there are many other reasons. Let us look at each one of them in detail.

1. Taxation purposes

The biggest reason for performing financial reporting is taxes. For instance, you need to lodge EOFY tax returns and other financial reports in Australia. These reports are mandatory by law to ensure that a company pays its fair share of taxes. Before filing taxes, an audit is also necessary, and accounting and auditing firms review financial reports to ensure accuracy and credibility.

2. For Attracting Investors, Bank Loans

Financial reports are critical for attracting investments. If you are looking to expand your business, the investor will surely ask for the company’s financial report. The investors will examine the report to see how the company is performing. Is it earning profits? Or is it at a loss? How is the company managing its cash flow? These are some key indicators that investors examine. 

If your company’s financial health is not optimal, no matter how excellent your product/service is, most investors will decline to invest in your company. Similarly, when you apply for a business loan from a bank, the bank examines your company’s financial report before lending the loan. Based on the information gathered from the report, banks can determine if the company can repay the loan.

3. For Better Business Decision-Making

A financial report is one of the essential tools for making better business decisions. For instance, if you want to open a new branch, a financial report can help you gain insights. You can assess crucial information like the company’s cash flow to identify if you have enough capital to expand and maintain solvent for daily operations. However, it is necessary to have detailed financial reports based on accurate data to make such decisions. 

In a survey conducted by Deloitte, most respondents identified an insufficient level of details as the main issue in financial reporting, as this can affect financial performance assessments. The advent of modern accounting software has mitigated inaccuracies from old financial reporting techniques, leveraging data and automation to reduce errors in financial reports. These software solutions often have an intuitive dashboard that provides businesses with critical information in an easy-to-understand format to help them make better financial decisions.

4. Builds Trust With Stakeholders

Financial reports help in fostering trust with stakeholders. Accurate and transparent financial reports – backed by data – help convince stakeholders about your business’ performance. Leveraging technology helps build detailed, accurate reports that provide your stakeholders with the information they need to understand your business’s financial position and performance. 

Who Uses Financial Reporting and Analysis?

Throughout the article, we’ve often mentioned several entities that can benefit from financial reporting and analysis, such as investors or lenders. Here is a list of other entities.

1. Business Managers

Business managers use financial reports to help them track and measure the performance of an organization. With deeper insights, they can then devise intelligent strategies to improve the company’s financial health. 

2. Tax Agents And Various Government Agencies

These groups use financial reports to check if the businesses comply with tax regulations. Financial reports are also reviewed as part of the auditing process.

3. Customers

Customers use financial reports to judge whether a company is reliable to do business with. They examine the statements to ensure that the company is financially healthy and determine whether it can stay for a long period.

Conclusion

Financial reporting is essential for any business, regardless of its size. It helps you better understand the company’s financial performance and enables you to make the right decisions that help in the growth of your business. 

Manage your accounts receivables better

 Book a demo of ezyCollect and see how AR automation can help you keep track of accounts receivables and improve data accuracy in your financial reports.

5 Reasons Why You Should Use Integrated Direct Debit

5 Reasons Why You Should Use Integrated Direct Debit

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We often talk about the benefits of automating your payments with Direct Debit – and how you can work even more efficiently by using Direct Debit in an integrated way. But what does Integrated Direct Debit really mean? And what problems does it solve that the traditional direct debit system can’t?

In our recently concluded webinar, Amanda Lee, founder of Amanda Lee & Co. and Receivables Management Advisor, Jimmy Cooper, Co-Founder and UX Researcher at ezyCollect, and Tony Gu, Customer Sucess Lead at ezyCollect, discussed the benefits of a fully integrated Direct Debit solution and how ezyCollect is changing the way Direct Debits work for businesses.

Here are the key takeaways from the session.

What is Integrated Direct Debit?

Integrated Direct Debit is a payment solution that is an enhancement from the standard direct debits we all know.

Integrated Direct Debit works by collecting payments directly from customers’ accounts that have granted you Direct Debit Authority. When direct debit transactions are integrated into your AR automation platform, the whole direct debit process is streamlined from collection to reconciliation, minimising friction. You also gain more control over direct debit payments, making extending that flexibility to your customers easier.

5 Reasons Why Your Business’ Cash Flow Will Love Integrated Direct Debit

1. Automatically writes back to your accounting system

For many businesses, the issue with the traditional Direct Debit service is that it doesn’t integrate with their accounting systems. Without integration, AR teams still have to reconcile payments manually.

With an Integrated Direct Debit, payments are automatically written back to your accounting system. When your customer’s account is debited for payment, it will automatically be marked as ‘Allocated’ on your ERP, saving you precious time each day on allocating payments.

2. Simplified customer process and payment experience

We all know how Direct Debit automates the payment process by collecting payments from your customer’s account through a direct debit authority. But the flipside of that is that customers feel like they’ve lost control over their bank accounts. 

Integrated Direct Debit work differently in that while it gets you paid faster by collecting payments directly from your customers, it also allows for flexibility. For instance, if a customer requested to cancel the direct debit transaction, you can easily do so on the platform.

An Integrated Direct Debit payment option also helps you stay competitive. It’s another digital payment offering you can make to customers that competitors don’t have. Integrated Direct Debit is another way of offering the customer another great chance to pay you in a different way that your competitors won’t have.

Related blog post: The CFOs Guide to Digital B2B Payments

3. Technology frees up business resources

Because integrated Direct Debits automatically collects payment from your customers, time spent chasing payments is reduced. It frees up time for your AR team to do more productive work to contribute to your business’ growth.

It’s also important to note that because you now have more control over when you get paid, your cash flow is more predictable, allowing you to strategize business expansion plans with more confidence.

 

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4. Focus on customer relationships and experience

Focusing on customer relationships and their entire experience with your business is of optimum importance.

By optimizing the customer experience and giving them opportunities like ezyCollect’s Integrated Direct Debit where you can collect now, or the customer has an option to schedule the payment, it provides the customer with a user-based experience. It starts making their relationship feel more connected with your business.

Another issue businesses had with direct debit was the ethical responsibility that comes with a customer’s permission to access their bank account or credit cards to take payment. A client’s financial situation can change at any time, but because standard direct debits aren’t managed easily by businesses themselves, adjustments take time and money, affecting customer relationships.

The beauty of Integrated Direct Debit is that it factors in the human side of accounts receivables. It gives businesses the ability to make any adjustments through the platform in a split second. Businesses can control how they receive payments and allow for flexibility that enhances the customer experience.

5. Predictability over your business’ cash flow

With Integrated Direct Debit, you are getting your money in the bank on a specific date and time, which gives you a lot more capacity to manage the cash flow in your business.

A predictable cash flow also means that you do not have to find other finance solutions for your business to carry the overdue accounts in your business. Businesses need to ensure they are constantly pushing the responsibility back onto the customer to pay the invoice on time as this directly affects the cash flow. By adding Integrated Direct Debit to your payment options, you offer them a different way to pay you that’s convenient for both parties and flexible enough to adjust to their needs. 

Watch the webinar

Get the full insights into improving your AR collections with Integrated Direct Debit. Watch the entire webinar on-demand.

Learn more about Integrated Direct Debits

Talk to us today and learn how Integrated Direct Debits can work for you. Or book a demo of ezyCollect and see how our AR automation platform can get you paid faster.

The Human Side of Accounts Receivables Automation

The Human Side of Accounts Receivables Automation

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Accounts Receivable automation is becoming increasingly popular in the finance sector, having the ability to replace manual processes – from invoicing to credit risk management – to save time, prevent errors and reduce costs.

The global AR automation market was valued at 1891 million USD in 2020 and will be worth 3861 million USD by 2026. That is a CAGR of 12%. An increased focus on cash flow improvement and reduced accounting time are the major drivers behind the growth of this market.

Despite all the latest technologies, the human touch is still essential for any financial automation endeavour. Let’s take a closer look at how automation can emphasize the importance of the human factor in accounts receivables. 

How does automation uncover the human side of accounts receivables?

Automation offers numerous benefits to the accounting world, from digital payments to accurate projections to valuable data helping organizations make more informed business decisions. 

Some feel that the shift from manual bookkeeping to automation will reduce the need for AR staff. However, automation creates clean and accurate books, helping AR staff be more productive and contributing to customer retention. 

Implementation and adoption

Businesses use many different accounting tools for bookkeeping, reconciliations, revenue forecasts, etc. However, if you use an automation platform, it will be only as effective as the data you feed into it. The more accurate the data goes into it, the more accurate the output will be. This is precisely where you need the human touch when implementing an AR automation solution for collections, B2B payments, or more. 

 Without some amount of human intervention, you may not get the full value from automation. An AR team is still needed for better adoption and implementation of these platforms.

 

Download the CFO's Guide to AR Automation

Plus, get access to our toolkit of free eBooks, guides, templates and other resources.

Download the AR Toolkit

Data-driven decision making matched with human intuition

Business leaders make critical business decisions based on data and counsel from key stakeholders. A key benefit of automation is that it makes it possible to create a dashboard with key metrics available in one place. Decision-makers would only need to look in one place for financials, sales data, and more.

Automation can help consolidate data – such as credit score insights – in an easy-to-understand format. The final decision still rests with the business leaders. Some leaders may use their intuition in making business decisions, but in the current market conditions, all businesses prefer to make data-driven decisions. With an automation platform, good data helps leaders make good decisions.

Technology can work wonderfully for the things they’re created for, but its programming is still limited. When it comes to navigating complex and unexpected events, it is hard to replace genuine financial experience. 

 

A tool to build meaningful customer relationships

Automation is perhaps the most popular when it comes to sending out communications. It is easier to set and forget notifications and reminders through various channels, not to mention cost-effective.

But while automation has created efficiencies in communication, this doesn’t mean that businesses should solely rely on it. When it comes to connecting with customers, the human touch is irreplaceable. It is, therefore, necessary for businesses to look at automation as a complementary tool that can unlock areas of focus in communication.

An AR automation platform, for instance, can tell you which customers may need a more personal approach through recorded data on credit scores and payment behaviour. Finding this information is more accessible, but you still have to call your customers to understand their issues with paying on time. Direct communication is necessary to help you make decisions that can impact your cash flow.

With automation becoming so deeply ingrained in our day-to-day lives, it is refreshing for customers to experience genuine connections with their business partners. By leveraging technology, you can create deeper customer relationships that help your business in the long run.

Conclusion

There’s no question that AR automation can drive business efficiencies. The emergence of advanced technologies like Artificial Intelligence, Machine Learning, and Blockchain is likely to transform further the finance and accounting sector further, like many other industries worldwide. However, to truly get the benefits of these tools, you will need some amount of human touch. Combining the accuracy of automation with human experience is a winning recipe.

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Let digital technology change the way you do business for the better. Book a free demo of ezyCollect and discover how AR automation and B2B digital payments can work for you.