Most people assume that if you want to see good results, you simply need to put in more hard work. Being a hard worker is always a great ideal to strive for, but there is a difference between working harder and working smarter. If you’re still printing invoices and stuffing envelopes, you may very well be wasting your time and slowing down your company’s order-to-cash cycle. This is usually due simply to the fact that these processes are incredibly time consuming, tedious, and do not lay the foundation for fast and effective invoice collection. Spending time on all these manual tasks may be working hard in receivables management, but it’s not working smart.
Various research reports have shown that the use of electronic invoice presentment and payment instead of traditional paper-based processes can provide a 30-60% labor reduction for accounts receivable departments.
Think about what it takes to get paid when you use traditional practices. First you create the invoice, print it, put it in an envelope, look up the customer address, address the envelope, put postage on it, and get it to the mail box. From there you have to wait 3-5 days for the invoice to be delivered, then your customer has to actually open the mail (which may be even a few days later if it gets stuck on their desk and forgotten) review the invoice, approve the invoice or contact you with questions, enter voucher, create check, print check, stuff and address envelope with postage, then get it to the mail box. That’s not even taking into consideration any re-printing, re-sending, or follow up you might need to do in order to get your customer to send you a check and that’s a lot of work!
With an automation process all you need to do it create the invoice and then it is sent via email automatically to your customer. All they need to do it open the email, click the link in the email which will take them to the secure payment portal, pay the invoice, and reconcile cc payments. Even when it comes to reminding the customer about an invoice the work is done for you. If you’re using an accounts receivable automaton system that can send friendly reminders and past due emails for you, track email conversations, and provide automatic reports and updates for you to work from you can reduce the labor and time involved in receivables management even further.
Companies using automated receivables management tools typically have saved up to 600 hours of time that was previously spent doing manual tasks like individually creating emails. With all this free time, more cash is collected increasing cash flow. Additionally, the company would not need to hire more help in the accounts receivable department allowing them to spend less while collecting more.
A lot of people are wary of automation at first, but you can see here how much it truly can change the way you work and give you the time you need to focus on other value-added activities.