If you think accounts receivable is just a boring, back-office task that doesn't really add value to a business, we’ll have to stop you there. Money owed by customers is one of the largest assets on any balance sheet and smart business owners know that accounts receivable is an important function that helps track who owes the business money and when they'll pay it back. In this article we explore how technology (and a good accounting advisor!) can improve your accounts receivable and ultimately grow your business.
Accounts Receivable is an essential part of any business. It's the money that customers owe for the products or services provided. But managing accounts receivable is a time-consuming and often frustrating task. That's why many Australian businesses are turning to technology to improve their accounts receivable process.
Why is Accounts Receivable Management Important?
Effective accounts receivable management is crucial for businesses. It ensures a stable and predictable cash flow. If businesses can't collect payment for the products or services they provide, they'll struggle to pay their bills and could even go bankrupt. Efficient accounts receivable management also helps build strong customer relationships. It enables businesses to respond quickly to any issues or queries that arise.
The Challenges of Managing Accounts Receivable
Managing accounts receivable isn't always easy. Some of the common issues businesses face include:
- Late payments: Many customers fail to pay their invoices on time, which can cause cash flow problems for businesses.
- Disputes: Disputes over invoices can lead to delays in payment, which can again impact cash flow.
- Manual processes: Traditional accounts receivable management methods, such as paper invoicing and manual payment processing, are time-consuming and prone to errors.
How Technology Can Improve Accounts Receivable
Technology provides businesses with tools to overcome these challenges. Here are some of the ways technology can improve accounts receivable management:
- Automated invoicing: Automated invoicing systems generate and send invoices automatically, reducing the time and effort required to manage accounts receivable.
- Payment gateways: Online payment gateways enable customers to pay their invoices quickly and easily, improving cash flow and reducing the risk of late payments.
- Data analytics: Data analytics tools help businesses identify patterns in customer behaviour, such as late payments or disputes, allowing them to take proactive steps to prevent these issues from arising in the future.
- Mobile apps: Mobile apps provide customers with real-time access to their account information, enabling them to make payments and resolve disputes more quickly.
- Cloud-based solutions: Cloud-based solutions offer businesses the flexibility to manage their accounts receivable from anywhere, at any time, and provide real-time visibility into their cash flow.
Benefits of Using Technology to Improve Accounts Receivable
Investing in technology to improve accounts receivable management can offer a range of benefits for Australian businesses, including:
- Improved cash flow: By reducing the time taken to manage accounts receivable and enabling customers to pay their invoices more quickly, businesses can improve their cash flow and reduce the risk of late payments.
- Enhanced customer satisfaction: By providing customers with real-time access to their account information and making it easy for them to pay their invoices, businesses can improve customer satisfaction and build stronger relationships.
- Reduced costs: Automated accounts receivable management systems can reduce the time and resources required to manage accounts receivable, enabling businesses to save money on staff costs and other expenses.
- Increased efficiency: Technology can streamline accounts receivable management processes, reducing errors and freeing up staff to focus on more strategic tasks.
Technology Plus Expert Advice Makes Good Things Happen
By automating invoicing, enabling online payments, and using data analytics to identify patterns in customer behaviour, businesses can improve their cash flow, enhance customer satisfaction, reduce costs, and increase efficiency.
If you're looking to improve your accounts receivable management processes, get in touch with our accounting advisors. We work together with BlueRock’s Digital team to transform business systems and processes with tech.
