Technology - ERP Transformation Specialists | Oracle Partner

How to Automate AR

by Sophia Riley | Oct 10, 2023 | Accounts Receivable, Automation

In this digital era, where time is more precious than ever and competition knows no bounds, groundbreaking automation solutions are replacing antiquated manual approaches to managing accounts receivable. Although there have been concerns surrounding the impact of automation on the job security of AR teams, your company should embrace automation to boost its odds of success.

AR departments across the globe grapple with a common challenge – the scarcity of time. This invaluable resource always seems to be in short supply. Research estimates that CFOs and their teams spend 90% of their time dealing with financial processes. Engaging in manual tasks, such as rectifying billing errors and mailing invoices, leaves these professionals with limited time to devise better workflow strategies and analyze data.

And there’s more. The drawbacks of manual processing extend beyond time constraints. Finance professionals frequently need help with compliance violations, diminished productivity, and misplaced documents.

Moreover, investing time in repetitive processes does not guarantee positive outcomes. Irrespective of the industry, your organization may need help to secure payments. The era of relying solely on manual AR management is ending. Fortunately, there’s a glimmer of hope through AR automation. Throughout this article, you’ll learn AR automation and how to implement it in your company.

What’s AR Automation?

Transitioning from a manual to an automated AR process requires a collaborative approach. The journey towards successful accounts receivable automation involves intricately interwoven components, and it’s not just about converting your manual process into a digital format resembling an ERP.

While investing in a state-of-the-art ERP may appear alluring, actual efficiency gains stem from incorporating an automation component into the system. Mere digitalization may not unlock the full potential of automation.

To achieve remarkable results, you must reorient your payment processing method, streamline your operations, and enhance efficiency. This transformation requires cohesive efforts from your IT department, AR and management team, and third-party vendors. Each should contribute their expertise to the endeavor.

Here are three crucial steps that will make your AR automation implementation a resounding success:

Identify Pain Points And Set Clear Objectives

Begin by pinpointing the specific pain points in your existing AR process. Analyze the bottlenecks, delays, and errors that hinder your team’s efficiency. Once this is done, set clear objectives for the automation initiative that outline your desired outcomes.

Select The Right Automation Tools

Choosing the appropriate automation tools is pivotal to your success. Research and explore different solutions in the market, considering factors like scalability, integration capabilities, and user-friendliness—partner with reliable vendors who understand your unique requirements and can tailor their offerings accordingly.

Empower And Train Your Team

Automation is most effective when your team is well-prepared to leverage its capabilities. Invest in comprehensive training programs to familiarize your AR team with the new tools and processes. Encourage a culture of adaptability and continuous improvement, ensuring your team stays updated with the latest advancements in AR automation.

Why Is It Vital To Automate Accounts Receivable?

The decision to automate accounts receivable transcends digital payment options and timely client payments. An effective AR automation solution goes beyond the surface. It aims to curtail costs, unleash working capital, decrease DSO (Days Sales Outstanding) time, and deliver invaluable data-driven insights.

Furthermore, AR automation should create a flexible and seamless customer experience. The more effortless it becomes for customers to settle invoices, the faster their AP (Accounts Payable) department will expedite the payment process.

The best AR automation software can also minimize the time spent on financial tasks and enable your team to focus on more critical initiatives. A B2B payment research revealed that companies implementing AR automation successfully shave off 20 days from their DSO. Through automation, AR teams can accelerate the processing of functions and improve their efficiency.

Achieving optimal outcomes from your AR automation journey may require you to integrate data security with your existing systems seamlessly. Seek AR automation solutions that offer secure data management and compliance with industry regulations. Also, prioritize data security and privacy to safeguard sensitive financial information.

What Are The Steps For Setting An Accounts Receivable System?

Setting up an efficient and automated accounts receivable process requires a strategic approach that begins with mapping out your existing workflow, identifying key objectives, and pinpointing critical bottlenecks. You need to go through these steps to comprehend the specific features and functionalities required from an accounts receivable automation software.

Understanding which manual processes to automate and which not to automate will help you tailor your strategy to suit your unique business interests. When setting up an accounts receivable system, start with a clear and defined goal in mind. Do you want to simplify complex processes, gain valuable insights through enhanced analytics, or automate tedious tasks? A well-defined objective will set the tone for your subsequent steps.

Collaborate with your staff when creating workflows or walking through the current processes. This way, you’ll achieve your accounts receivable automation within no time.

Some goals you should consider when developing an AR automation system include:

1. Minimizing Inefficiency: Streamline your AR processes to reduce manual interventions and expedite operations.

2. Reducing Transaction Charges: Identify opportunities to minimize transaction fees associated with payment processing and optimize your financial operations.

3. Eliminating Doubtful Accounts: Enhance risk assessment and credit management practices to reduce the risk of doubtful accounts and potential bad debts.

4. Accelerating Payment Processing: Expedite payment collection by offering convenient digital payment options and optimizing invoicing procedures.

5. Enhancing Customer Satisfaction: Foster a customer-centric approach with a smooth and user-friendly payment experience. This will ultimately enhance customer satisfaction and loyalty.

6. Maintaining Healthy Cash Flow: Implement attainable payment terms and strategically manage cash flow to ensure your organization’s financial stability and growth.

7. Enhancing Visibility: Establish transparent and real-time visibility into your AR processes to facilitate better decision-making and operational control.

8. Linking with vital systems: Integrate your accounts receivable automation with other essential business systems like ERP and CRM to streamline data flow and enhance efficiency.

Selecting The Best AR Automation Software

Regarding accounts receivable automation, the right software can work wonders. It will reduce invoice processing costs by 80% and accelerate payment cycles. Businesses that invest in this automation solution witness faster payment receipts and thrive in the financial landscape.

Your efforts to automate AR will yield substantial returns and help your business increase operational efficiency. Are you ready to leap into the future of finance? Book a complimentary demo with a seasoned expert today and elevate your financial prowess.

Steps To Simplify AP Processes

by Sophia Riley | Oct 3, 2023 | Accounts Payable, AP Automation, Automation, Digital Transformation, Invoicing

Is your accounts payable crew swamped beneath a heap of papers? Are they occupied to the point where you need more employees to handle the load? If this is the state at your company, it’s growing faster than your present AP methods can handle.

Streamlining AP processes can help you solve this problem, giving you less hassles and better sailing. With a simplified AP process, your team won’t have to sift through mountains of paperwork. They’ll glide through tasks more effectively and save some time to focus on the nitty-gritty that matters.

And there’s more. Simplifying your accounts payable processes will help you minimize errors. Mistakes can be quite expensive to fix, especially if they’re serious. Thankfully, simplified AP processes can help you overcome these financial fiascos and keep your wallet happier. The more simplified your processes are, the higher the morale of your employees. Keep reading to learn the steps for simplifying AP processes.

Take Inventory

It’s important to examine how long your staff takes to handle AP processes. If they’re wasting time wrestling with AP, it’s time to take inventory of your current methods.

When you take stock of what’s happening, you’ll uncover the tiny parts that make up the process. You’ll see where things might be getting tangled up or lost. With this insight, you can tweak and tailor the processes to make them faster — but that’s not all.

Taking inventory will enable you to spot the differences in how your employees do the same job. You can share the tricks that work with others to improve efficiency. Essentially, taking inventory isn’t just some extra task on your to-do list. It’s a passport to success. Digging into the processes, measuring time, and spotting the differences will help you revamp your finances.

Standardize AP Processes

Observe how the employees handling your accounts payable (AP) go about their work. Pay attention to how long it takes them to handle invoices and the steps they follow. You can greatly improve your accounts payable system by creating consistent methods that everyone on your team can use.

Establishing uniform procedures can also make your processes more efficient. When your team follows the same steps for handling invoices, there will be less confusion and errors. This can save time and improve the accuracy of your financial records.

Without standardized accounts payable processes, you might encounter several challenges. Firstly, consistency in how invoices are processed can lead to data entry and record-keeping mistakes. This can result in financial discrepancies and potential problems during audits. Secondly, if employees have their ways of handling invoices, it can be challenging to track the status of payments or identify bottlenecks in the process. A lack of visibility will lead to payment delays and strained vendor relationships.

To address these challenges, implementing standardized procedures is crucial. Begin by documenting a clear step-by-step process for handling invoices, from receipt to payment. Provide training to your AP staff to ensure they understand and follow these procedures, and regularly review and update them to adapt to changes in your organization or industry practices. Doing this will enhance your AP processes’ efficiency, accuracy, and transparency and promote better financial management.

Embrace Digitization

Shifting your workplace into the digital space comes with several advantages. One of the most significant is the reduction of paper usage. Going paperless benefits not only the environment but also your peace of mind.

Using paper presents a range of drawbacks for businesses. These include:

Loss and damage: Critical documents like invoices are susceptible to getting lost, misplaced, or even damaged when handled on paper.

Cost: Printing out paper documents can be expensive. You’ll incur costs for paper, ink, and printing equipment maintenance.

Space constraints: Storing archived paper documents can lead to space-related challenges. They’re likely to crowd your office and make retrieval difficult.

Security concerns: Sensitive information can be vulnerable when stored on paper. It can be easily stolen or accessed by unauthorized individuals.

Digital solutions can help you to avoid these problems. Adopting an ERP system will enable you to perform paper-heavy tasks digitally. Such tasks include receiving and approving electronic invoices and securely archiving paid documents. Furthermore, digitization can boost teamwork among colleagues. Through online document sharing, your employees will have real-time communication and better productivity.

Get Rid Of Manual Data Entry

Entering data manually can be stressful. Let’s face it: human fingers aren’t always the most accurate typists. Typos and misentries can sneak into your records, leading to confusion. Fortunately, a modern solution can save you from this old-fashioned practice – optical character recognition. This technology can instantly spot and grab data from scanned documents or electronic files. With OCR, you’ll spend less time entering data. The cherry on top? It’s not just your budget that will benefit, but your employees will be happy too.

Store Records Properly

Locating documents in physical storage locations can be quite challenging and time-consuming. You may spend more time searching for the documents, especially if they’re kept in a large room. Making room for extra stacks may also be difficult.

Thankfully, with the help of an ERP system, you can stash away your documents in digital form. When you need them, they’re just a click away. Cloud storage for your business records will add a layer of convenience as your employees can get them from wherever they are.

Invest In An AP Automation Software

Old methods slow down whole processes. Waiting for approvals and hunting down records can add up and hurt your company’s efficiency. If you want to modernize your workspace and make your accounts payable tasks smoother, you should include AP automation in your strategy. There are software options out there that are designed to do just that. These systems take care of repetitive, time-consuming tasks and help you focus on things that bring real value, making dealing with invoice info way more efficient thanks to the ability to snag, check, and tuck away data in a digital archive.