You see, managing AR and AP manually can be strenuous. Besides, it prevents your teams from focusing on other productive tasks. On the flip side, automating AR and AP speeds up the entire process and ensures it is less prone to errors. Plus, it keeps your employees happy and, of course, productive. Even so, automation is somewhat a complex concept and often raises questions.
So, before we look at which processes you can automate to help you take charge of AR and AP, we’ll talk about the basics first.
Benefits of Automating Accounts Payable
We’ll start with how AP automation can make things a lot easier for your business or organization.
You Can Create More Accurate Invoices
Sending invoices containing errors isn’t good for business. Apart from ruining your company’s reputation, this can also lead to potential legal liability. Automating AP accounts enables you to bypass common errors associated with manual data entry, such as missing or incorrect details.
You Can Trace Records Quickly
Managing AP manually means dealing with a lot of paperwork. The problem is, paper can get lost easily. Moreover, physical records can be moved, increasing the probability of misplacing important business documents.
AP automation software, on the other hand, streamlines your business records and activities, allowing you to track them at the click of a button. On top of that, it saves physical storage space.
It Improves Efficiency
Mistakes take time to correct, which may harm the overall efficiency and productivity of your employees.
AP automation frees your workers from wasting time on pointless or repetitive tasks, saving you money in the process.
It Fosters Better Workplace Collaboration
When you automate AP, you create cohesion in the finance department. Everyone can see the movement of invoices from the moment they enter the system to approval.
The ripple effect is real-time collaboration on shared documents, details confirmation, and dealing with inaccuracies. It also reduces disputes and frustrations on what can be a draining process.
Benefits of Automating Accounts Receivable
AR automation has its advantages, too, some of which are listed below.
It Reduces the Cost of Processing Payments
Automating accounts receivable goes a long way in reducing the amount of money your business spends to process payments.
And the beauty of it is that you can automate everything from money transfer to feeding records into ledgers and money transfer to various accounts.
It Creates Room for Faster Payments
Did you know that 82% of businesses fail because of cash flow problems? Even though this can be attributed to the inability to generate enough revenue, many businesses experience this problem because they cannot get paid on time. In addition, sending invoices manually at the end of the month aggravates the situation. With AR automation, however, you can create and send invoices in minutes, enabling your customers to pay you on time.
It Improves Customer Service
The happier your customers are, the higher likelihood of them paying you on time.
An AR automation solution that can integrate with your CRM and ERP system enables you to locate misplaced invoices and detect incorrect details quickly, helping resolve any issues faster.
That way, your clients can pay you without encountering unnecessary hitches, which by extension, helps you nurture a healthy business-to-customer relationship.
And, just as it is with AP, automating AR also helps reduce human errors.
Indeed, there’s every reason to automate your AR and AP accounts. The question then becomes:
How Can you Manage your AR and AP Processes with Automation?
You can stay on top of your AR and AP processes by allowing your system to perform several tasks on your behalf. We’ll break it down into AR and AP automation.
Accounts Receivable Automation
Here is a rundown of tasks you can automate to give you more control of your AR processes.
Match Retainer Invoices to Estimates
With AR automation software, you can do the following:
- Convert estimates your customers have already approved into retainer invoices
- Deduct the retainer from the total amount due for future invoices
- Send the retainer invoices to your customers
That way, you can get upfront payment for customer-approved estimates, allowing you to improve cash flow in your business.
Set Up Payment Reminders
Late payments are occasioned by two things – failure to remind the customer that their invoice is due or sending the invoice late.
With AR automation, this shouldn’t be a problem. You can set up a system that’ll methodically remind and send notifications to your customers before, during, and after the invoice is past the due date.
Reconciling invoices is a crucial process of running any business. Manually invoice reconciliation can be super-exhausting. Plus, one small oversight can set you back hours or even days.
Customer Workflow and Communications
How often do you talk to your clients? Many AR departments only reach out to customers when a payment is overdue, a situation that then turns into play catch-up. Because you have better things to do than chase your clients to pay you, you’re better off automating these reminders.
Accounts Payable Automation
Automating AP tasks below can help streamline your workflow and improve how you run your business.
Receiving and Capturing Invoices
Receiving invoices from vendors is a simple task. Or is it? Sorting out and routing supplier invoices sent in different formats can be a rigorous undertaking. And then there’s the ever-looming possibility of errors with manual entry.
AR automation eliminates paper invoice processing, allowing you to automatically categorize and route your invoices, which saves you time while ensuring accuracy.
Approving invoices manually is cumbersome and often leads to payment delays and penalties.
Automating invoice approval and routing hastens the process. You can route invoices to the right person for approval in a couple of clicks, improving workflow and enhancing efficiency.
AR automation software allows you to store your trading partner’s relevant documents electronically. It also matches invoices with their corresponding documents automatically, speeding up your accounts payable workflow significantly.
Vendor Payment Inquiries
With an electronic vendor portal, your suppliers can log in and check the progress of their invoices and payments. That way, your AP team won’t have to waste time on calls responding to vendor payment inquiries.
We Can Help with AR and AP Automation
Manual management of the AR and AP process leaves your finance department devoid of energy, worn out, and unmotivated, leading to errors, delayed payments, and overall inefficiency.
Inversely, AR and AP automation improves the atmosphere in your business while making sure that your teams are tension-free.
It also allows you, employees, to think more proactively, improve the relationship with your trading partners and boost productivity – which is precisely how things should be.
Your journey to AP and AR automation starts with partnering with the right solution.
Unimaze automation software can process both AR and AP to meet your unique business needs.