Fast-Growing Business? Here Are the Benefits to Switching to AR Automation.
Oct 5, 2022
Growth is often a necessity for any startup. It also comes with its own set of challenges. Your financial department can become overwhelmed with the increasing number of clients and invoices. That’s especially true for SaaS businesses and those who are still going through their digital transformation.
But getting an influx flow of new clients doesn’t have to lead to a work overload (or overwhelm). With the right processes to support you in this new stage of your business, you can focus on your company's growth without worrying about running out of cash.
That’s where AR automation can help you. By automating (part of) your AR process, you can focus on your strategic vision - while getting paid faster.
What are the benefits of using AR automation for a fast-growing business? Keep reading to find out!
Upflow is an AR software that helps you automate your most repetitive tasks and optimize your AR process. We help CFOs of fast-growing businesses be more efficient in their day-to-day, so you can focus on reaching your long-term goals.
Automation Makes Your AR Process More Efficient.
The first benefit of working with automation is that it makes your whole accounts receivable process more efficient. That’s true for your internal process, but also for your collections management with your clients.
Streamline Your Internal Receivable Process.
Adding a new tool to your tech stack means reviewing your already-existing business processes, to see where and how you can improve them.
The same goes for AR automation: getting the automation process started will already help streamline how you work. You can take this as an opportunity to redesign your workflows for your accounts receivable management.
By spending a bit of time upfront to strategize, you will save hundreds of hours down the line.
Once that’s done, make sure everyone on your receivable team is aware of the precise processes you have put in place. Having clear documentation of your current business processes is essential to make sure all employee onboarding goes smoothly.
That means having clear action plans for different scenarios (unpaid invoice, dispute, etc.) and knowing exactly who’s in charge of what.
You can also keep your accounting team and sales department in the loop, as they are the ones dealing firsthand with your customer payments. Everyone in your company should be on the same page when it comes to your payment terms and credit policies.
AR software will foster collaboration in both cases.
With Upflow for instance, you can leave internal notes and attribute tasks to other team members. You can also invite an unlimited number of people to join so that all your relevant stakeholders have access to the information.
Communicate Better with Your Clients.
Using accounts receivable software will make it easier for your clients, too.
Because your processes are clear and automated, your customers receive the information they need, when they need it. No more invoices that got lost, or follow-ups that are never sent.
Paired with your billing or invoicing tool, your AR software will enable you to easily notice and send regular reminders when an invoice is left unpaid.
It’s handy for your clients so they don’t risk getting late payment fees, and it ensures they make their payables a priority.
Depending on the software you pick, you will have a different balance between personalization and automation. Some solutions offer 100% automated emails with few possibilities for personal touch, for instance. With Upflow, you can customize the emails you send to each client, or use our templates.
AR Automation Helps Get You Paid Faster.
The most direct benefit of using accounts receivable automation is seen in your cash flow. AR software helps receive faster payments through a combination of features.
Set up Payment Reminders.
As we’ve mentioned before, AR automation involves sending payment reminders to your clients.
With receivables automation software, instead of crafting emails from various saved samples, everyone on your AR team can use the same email reminders. Ones that are proven to work! That’s a lot of energy and time saved on a weekly basis.
You can even design sequences of emails that will be sent one after the other, for example:
One on the day your invoice is due,
One 3 days later,
One 7 days after due date,
You can even go further and send different emails to different client groups: new clients, at-risk clients, corporate clients, etc.
More personalization leads to more chances of getting paid - and also offers a better customer experience. Automation should never come at the expense of human relationships, and high-quality interactions can be fostered through AR software.
It’s all about balancing the level of automation and personalization you desire for each client or client group. And knowing when an account requires more hands-on attention!
Make Payment Easier.
Automation helps you get paid faster because it makes the payment process for your clients easier - which is key!
Thanks to automated emails, you can ensure your clients get the right information, at the right time.
It can mean including in your emails:
Various payment options:
Direct payment links for online payment via credit card,
Bank details information for payment via bank transfer,
A reminder of your payment Terms & Conditions (especially good for those clients who make late payments a bit too often) and/or of your pricing if it’s relevant.
By writing your emails once and sending them (semi) automatically, you can easily scale up your collections process.
Improve Your Tracking and Decision-Making thanks to Accounts Receivable Automation.
Receivable automation software centralizes your AR data in one place. That leads leads to better reporting to base your decisions on. That’s especially convenient for these situations that require you to quickly call the shot!
Get Your KPIs Automated.
There are a few accounts receivable metrics that you should track: your DSO, CEI, and aging report are a few of them.
But how do you track them? Manual calculations are time-consuming and error-prone. Not the kind of operations you want to be doing in a rush before an executive meeting.
AR software helps you by presenting the AR metrics you need in a dashboard. You can even draw reports and change variables to get different scenarios of what might happen.
It’s quicker and more accurate, as you lessen the risk of human error that comes with processing data on spreadsheets.
Centralize all your AR data.
Your AR automation solution works alongside your other ERPs like your accounting software, billing tool - and even your CRM!
The result is a super-accounting system, your go-to place to come and check your KPIs, so you can better analyze your accounts receivable.
Because your tech stack is interconnected, all the data flows from one tool to another, giving you the information you need at the time you need it.
Upflow for example works with real-time data, meaning you can trust the numbers you see are the most accurate ones. The same goes for your KPIs and your unpaid invoices.
It also helps with cash application: the money you receive through your payment processing tool is automatically paired with an invoice number on your AR software.
Using an automated solution means fewer manual processes and increased data accuracy. That’s the ideal combination for the fast-paced environments growing businesses evolve in!
AR Automation Leads to Better Cash Flow Management.
Regardless of the complexity of your business, AR automation software will give you instant visibility over your AR processes at all times. Not only does it help with your cash flow management, but it’s also helpful to take corrective action.
Better Cash Flow Management.
With AR software, you know exactly where you stand at all times:
What are your total receivables,
How many invoices are more than 90 days overdue,
Your DSO and your CEI,
All of this data helps you plan ahead so you can better manage your company’s working capital.
Looking at your aging report’s 60 to 90 days overdue category will tell you if you have a cash crunch coming your way. When invoices start piling up there, you know there is a risk of a liquidity shortage further down the road.
When small businesses have a growth spurt, cash can quickly become a problem. Using tools that help with cash flow management ensures your business keeps on growing for a long time - without stress.
Most AR software allows some degree of forecasting which enables you to make the best long-term decisions for your business. Upflow for example offers a cash inflow forecasting feature.
Prevention and Action in One Application.
Unpaid invoices are always at risk of turning into bad debt, meaning they never get paid. While that’s an operational cost that must be factored in, it’s better if it happens as little as possible.
Accounts receivable automation software is here to prevent bad debts from ever happening, by helping you stay on track of your overdue invoices - regardless of how many there are. It frees up your time so you can focus your energy on the accounts that require more attention.
Accounts receivable automation is helpful for tracking, analyzing, but also course-correcting directly when something isn’t quite going the way you’d like.
If after checking your dashboard, you’d like to reduce DSO (Days Sales Outstanding) in your business for instance, you can do so straight from your AR software. It saves having to switch between different software and spreadsheets - which can quickly become tedious and confusing.
If you use Upflow, you can click on your list of your unpaid invoices straight from your billing cohort, and get your client’s details to give them a call - or send them one of your follow-up payment reminders.
Automating Accounts Receivable Means More Time for Strategy.
Because they help you automate your most repetitive (and time-consuming) tasks, automation frees up your time for higher-value-added tasks:
Managing the accounts that need careful handling,
Optimizing your internal processes,
Onboarding new team members,
Planning for your growth.
Instead of having to track your invoices, send manual payment reminders, and make calculations of your KPIs by hand, you can focus on what really matters: your long-term strategy.
Repetitive tasks can and should be automated to free up finance teams’ time. If something can be done more efficiently through automation in your department, it’s your whole company that benefits from it. As a result, your profitability increases.
Having a clear focus on strategy will help ensure your company keeps on growing without getting tangled in the day-to-day tediousness of some tasks. It’s knowing where your time and energy are better used, and supporting your team to achieve new targets.
All in all, automation means streamlining your workflow, so you can focus on strategy and improving your cash flow.
Business growth has to be carefully managed. Cash is king, and accounts receivables play a big part in ensuring a company’s liquidity.
AR automation software helps you streamline your receivables processes, both internally and with your clients. It increases communication with your customers while fostering collaboration.
By making sure your invoice-to-cash process is as seamless as possible for your clients, you can reduce your payment times. This also increases your profitability, as your team spends less time on this task. Designing payment reminders workflows, as well as offering various payment options, are two important ways to do that.
Accounts receivable automation also helps with data management: by calculating and displaying your AR KPIs on your dashboard, as well as centralizing all your data into one place.