Accounts Receivable Software:
Accounts Receivable Software is a software that are designed to speed the processing of invoices and reduce or eliminate the errors produced in a paper process.
The main purpose of this software is to automate the processes that will include invoice processing and receipt capture features, as well as tracking and compliance measures. Accounts receivable are asset accounts that track the things that a third party owe to the organization. The accounts receivable automation process focus on invoice automation and management.
How to Process Accounts Receivable?
The procedures for accounts receivable need to be set up if you extend credit to your customers. This is required when you allow a customer to take immediate possession of a product or receive a service in return after they promise to pay in the future. So, before they pay you, the customer is allowed to take take possession of your products. The credit card company manages the risk if our business accepts credit cards. However, you need to manage verification of payments and risk if the mode of payment is through cash or cheques.
Benefits of Accounts Receivable Software:
There are many benefits of implementing account receivable management software that include:
Improves your Cash Position:
You will have a very clear picture of your cash position by using Accounts Receivable Software that help reminding customers to pay, identifying invoices earlier in the process, and making it easier for customers to pay. Based on the historical payment history of your customer it is possible to generate a a statistical cash forecast by using this software which would give you an idea what cash you should receive in the next week out to the next month.
Increase Control over Cash and Working Capital:
You will get the insights of the things that need to make strategic investment decisions such as capital equipment purchases, new employee hires, facility expansion, and other investments to grow your business by managing working capital effectively. Managing and improving working capital is possible by understanding your cash position and improving accounts receivable performance which can be done by using account receivable software.
You will also have more cash on hand by improving your invoice collection process. Therefore, control over cash and working capital is increased.
Increase Efficiency of Accounts Receivable Management:
Accounts receivable management software can be used to get organized and to automate tedious tasks that help reducing time spent prioritizing and preparing for calls. reduce time spent managing disputes and increasing the time spend on soliciting customers for payment.
Improve Customer communication, service and satisfaction:
As you can typically do multitasking that include reviewing account information, creating emails, attaching invoices, creating mail merge documents, and logging phone calls from a single screen, the software make it easier for you to communicate with customer and saves your time as well. Also, every communication is stored for future review and analysis.
Automation of invoice delivery to customers can be done using an account receivable management software. The software also alert you to problems with invoices such as missing purchase orders, and all the required information is available in one centralized location. This helps you to serve your customers better, wasting less of their time, and improving your relationship. So they will buy more products and services as they are satisfied by your service.
Minimize Credit Risk:
It is possible to store credit reports from bureaus by using an account receivable management software applications. It also has the facility to send out credit applications and file them against account records, create your own credit scoring formulas, color-code customers by risk level, and setup alerts that will notify you about excessive broken promises and disputes of customers, or accounts that take longer to pay their bills. All this features will help reduce the credit risk.