CFOs: 9 benefits of implementing an Accounts Receivable Software right now
Fast-growing companies must stay on top of technologies to scale: they must build the right finance stack.
As we know, finance is much more than just payments and collections - in fact, it’s as strategic a department as you can get.
When your company grows, your financial needs grow with it. This is why your accounting and finance software needs to be able to support fast growth too.
Building the right finance stack is crucial to scale. It fosters the long-term health of your company while mitigating your risks.
From there, you have 2 options:
- You can choose to try to catch up permanently and set up systems on the fly when needed. (We’ve all done this, especially at the beginning.)
- Or, you can plan for the future and set them up now, which will help you grow even more. (Let’s call this the mature option.)
Why should you care about Accounts Receivable?
One area that gets easily overlooked, especially at first, is the Accounts Receivable. They’re often sliding down the list of endless priorities . That’s risky!
As we all know: cash is king. It’s all well and good to make sales but if it doesn’t translate into money in your company’s bank account, you are not growing. Worse still, with the service already delivered, you might actually be losing money.
Alongside ensuring that cashflow is optimal (and that’s reason enough), having a close look at your Accounts Receivable can be useful for the whole company.
When a client doesn’t pay their invoices, it’s often an indicator of a much more significant problem :
- They might not be happy with the product (for example, they’re experiencing technical issues),
- They might have different needs (bad product-market fit)
- There is trouble in your relationship (for reasons above or because they’re not having a great customer experience).
This means they might be on the verge of leaving you if you don’t take action quickly.
Accounts Receivable may not be the most appealing topic to tackle, but it is an important one. Knowing what your customers owe you and when, as well as being able to mitigate the risks associated with your accounts, is what can make or break a company.
The good news is: Accounts Receivable management doesn’t have to be a painfully slow manual process.
Long gone are the days of having to use spreadsheets and sending PDF invoices that are more than likely to get lost in your customer’s inbox.
All of that to eventually get a check in return? And that’s when you’ve managed to remember who owed what, found their contact, managed to get in touch, and finally received a long-awaited payment.
There is an easier and more efficient way to optimize your collection process.
The right finance stack helps to stay on top of A/R thanks to:
- Open and connected technology.
And you guessed it: that’s the solution that Upflow’s A/R collection software provides.
- You can integrate Upflow with your existing ERP such as Netsuite, Chargebee, Stripe billing, etc.
- You can set up workflows to take care of your most repetitive tasks so you can focus on what really matters
Our goal is to help streamline all your payment processing and financial reporting into an easy-to-manage process in one modern hub.
Curious to know more? Let’s have a look at all the benefits of using an A/R collection software:
Deliver a professional experience even when chasing invoices
An A/R management software will help you track these past due invoices and get them settled automatically.
Forget having to chase information on a spreadsheet, a A/R management software collects and organises all the data for you.
It also allows you to stay on track of what needs to be collected and when. Accurate information in real-time is a must when collecting A/R and this can be achieved with the help of an effective accounting system.
When it comes to collecting A/R, it is important to be resilient and show that you mean business. As a minimum, we recommend 1 action/week on each account overdue. By prioritizing payment collection you set the standard for your clients.
On the other hand, if your clients don’t hear from you for months, it might slip away from their list of priorities.
Maintaining accurate and professional communication is a good way to add credibility to your processes. It also enhances your customers’ experience.
Bring your Accounts Receivable process up to date and improve your KPIs
A good A/R collection software will allow you to set up different workflows to deal with your overdue invoices. These can help you to achieve the right balance of automation and personalisation that you want for each of your clients.
Setting up workflows to collect your A/R reduces your unpaid invoices and allows you to cash a higher percentage of your turnover (every company’s dream!). This will in turn reduce your order-to-cash ratio as well as improve your other important KPIs.
Gain valuable Insights
Keeping an eye on your collection efforts allows you to know exactly where you stand. A/R collection software usually has a dashboard that displays all the KPIs you want to follow.
On Upflow for instance, you can see all your important KPIs in one place.
CFOs and CEOs should always have these real-time numbers at their fingertips - it’s part of a healthy financial routine. It also helps them with decision making.
A/R software facilitates producing KPIs on demand and helps you follow them over time, so you can track your growth on several fronts.
Plus, it’s useful to demonstrate your businesses liquidity to investors. And the more you raise money, the more investors will want to look at your financial statements - on all fronts!
Make it easy for your customers to pay you.
With an A/R collection software, your customers can pay you online directly - no more fumbling for bank account details or writing (+ remembering to post) a very vintage check.
On Upflow, customers have access to a specific portal through which they can pay you directly.
Each customer has a unique portal with all their invoices set out clearly. In one glance, they can see all their past and future invoices with the due dates clearly outlined.
Your customers can then proceed to paying all their invoices at once in a couple of clicks, with the added convenience of choosing from various payment methods.
Automate your A/R process
The big advantage of A/R collection software is that it lets you automate all or part of your collection processes.
Once you’ve set up a few workflows, you’re ready to go! We wouldn’t exactly say “forget about them” (dedicated attention is always needed) but you will be able to think about them a bit less.
These workflows can be partly automated: on Upflow for example, you can schedule automated emails to be sent to specific accounts when an invoice is due. You can also set up reminders to pick up the phone and have a chat with your client when it’s needed.
By automating part of your receivable process, you actually have more time to dedicate to the part of it that requires finesse and a personal touch.
An automated workflow to collect A/R could look like:
- A reminder email sent on the day the invoice is due
- Another one sent week +1
- A reminder to your team to call your client on week +2
That’s just one example to illustrate what you can do with an A/R software collection like Upflow. We recommend setting up different types of reminders based on your accounts’ situation:
- Automated emails
- Manual emails
- Phone call
You should also have the option to customize workflows depending on your customer’s situation - and also depending on your client. We all know big companies and small businesses need to be addressed differently, so it’s good to have the choice of how you want to proceed.
Know when to intervene
By automating your most repetitive collection tasks, you and your team can focus on the ones that really make a difference.
For example: if an invoice falls into the 60-90 days late bucket, there is usually a bigger reason why it hasn’t yet been paid. There could be a lot of reasons behind it. Regardless of the cause, the situation needs to be addressed ASAP.
These are the cases you need to dedicate your time to.
In this case, automating reminders for earlier invoices (<60 days overdue for instance) can give you more time for personalized collection on accounts that are the most at risk.
By having a hands-on approach with the accounts that need it, you can uncover what’s really going on quicker, which is the first step to actually solving the problem. Acting fast improves the odds of arriving at a win-win situation and makes sure your customers’ experience remains positive.
Management is all about making strategic decisions and knowing how to assess the risks. A/R collection software gives you the means to take a step back and focus on prioritizing your team’s energy and focusing on what’s needed most.
Increase Your Productivity
When business processes are automated, human errors decrease. Moving from Excel spreadsheets (which are somehow never fully updated) to an accounting software helps you reduce the guesswork.
Think about it - that means no more:
- Tracking lost invoices,
- Searching for the right invoice details,
- Looking for contact details,
- Sending the exact same email manually 300 times,
- Popping up 6 months late in your client’s radar to ask for immediate payment.
Not having to deal with all of this frees up your time - and your mind - to dedicate to more value-added tasks. After all, you’re here to do strategic work!
And even if you’ve managed to delegate tracking past due invoices, there is still something more beneficial the finance team could be working on right now.
By setting up collection workflows, your department can begin prioritizing pressing items on their to-do list which will have a bigger impact on the company.
Improve Team Collaboration
You’d be surprised at how much feedback your finance team might be getting on your product, sales process, or customer management already. Which is why communication between your finance team and sales and customer management teams is crucial.
When you have just one space where all the information is gathered, it’s simpler to work and collaborate.
On Upflow for example, you can communicate with coworkers, tag people directly and even assign them actions - through the hub, without having to revert to emails or spreadsheets.
You can include people from:
- Customer management
- Upper management
That means all the right people have access to the right info at the right moment.
We recommend always including Account Executives into the process! They should get involved in the Accounts Receivable collection process after the 3rd reminder to help investigate what really is going on.
By involving the relevant actors, Upflow helps you make your A/R a company-wide task which increases global efficiency and helps to meet business needs.
A good finance stack is one that helps you to forecast the future of your company. Put simply: you need to plan for your growth!
You might be OK with your excel spreadsheet at the moment, but if you’re planning on growing exponentially in the coming quarters, chances are, they will become obsolete very soon.
Apply the same logic when considering any new tool. Does it fit your current business needs? If yes, it might not fit tomorrow’s needs.
The key is therefore to find an accounting software that is both easy to navigate and will also support your future growth.
Quickbooks is a perfect example of that: their strength (and success) comes from the fact that they integrate with literally hundreds of apps. Regardless of the tools you’ll be led to use in the future, you know they’ll be able to plug right in.
The same goes for A/R collection software: you need a tool that integrates with the ones you already have. The good A/R collection software for you is the one that will fit in your existing finance stack.
Either with pre-existing integrations or through an API, your new receivable automation software needs to be able to integrate with your existing accounting solution, your CRM, your banking solution … any ERP you already use, like Sage Intacct, Netsuite or Salesforce.
That’s because there is a high switching cost associated with ERPs, and we’re not just talking about the financial cost. Moving from one software to another requires transferring all data, making sure everything is “clean”, getting used to the new UX, training your team and educating your customers about it. It is a lot of work!
Choosing an A/R collection software that will support you now and in the future will save you time and money.
Of course, we recommend including Upflow in your finance tech stack.
By using Upflow, you’ll be able to:
- Make it easy for your customers to pay you.
- Deliver a professional customer experience
- Know when to intervene
- Bring your A/R up to date and improve your KPIs
- Gain valuable Insights
- Increase Your Productivity
- Improve Team Collaboration
- Be Proactive
At Upflow, we want to revolutionize B2B payments. We don’t think that in 2021, companies should still have to struggle to get paid.
Modern disruptive companies cannot allow themselves to do things the old way. They cannot accept late payments or non-receipt of payments. And they certainly cannot waste precious time running after past due invoices.
Upflow helps you streamline your Account Receivable collection processes into one hub, so you can cash in 100% of your turnover.
Register below to join our upcoming webinar and gain expert advice on building your B2B SaaS finance stack.