Thankfully, fewer and fewer businesses are still receiving checks from their customers; most of them have moved to electronic payments, and this is progress. However, for the majority of companies, payment processes still require manual labour and a shocking quantity of paper.
Implementing intelligent technologies like accounts receivable automation can make these processes more efficient and trackable, providing actionable insights while drastically improving your bottom line. Just think about it: if your team spent less time on tedious, repetitive tasks, what would they be doing? Where would they channel their brilliant energy instead? What if spending hours gathering data from different sources to build a global picture of your accounting data, communications and payments history could become a distant souvenir?
Now that you are convinced, you’re probably wondering where to start, as there is a myriad of platforms on the market designed to automate your accounts receivable. From prospecting to implementing, dive into our comprehensive buyer’s guide and learn about the essential features to look for in an automation platform and how to make and embrace your final choice.
I. The science of Accounts Receivable Automation
A. What accounts receivable automation is not
Despite the connotation of the word “automation”, Accounts Receivable automation is NOT a way to bypass the human touch that underlies the collection process. Instead, it is a fantastic tool that enables finance teams to offer highly personalised and human service to their customer throughout the collection cycle, which they could not do at scale on their own by lack of time and probably energy, too. AR automation is a disruptive technology which, far from removing humanity from a highly delicate process (collecting outstanding payments), reinforces it. Instead of being chased by an exhausted and annoyed employee who spends hours sorting out invoices, customers automatically receive friendly and personalised reminders and follow-ups based on their favourite method of communication. Meanwhile, finance teams can focus on more added-value tasks, develop new strategies, and strengthen customer relationships. That’s the science behind Accounts Receivable automation.
Too often, clients can be reluctant to implement automation for fear of “losing control” and relinquishing it to an unknown intelligence. This fear is deeply rooted in our fear of the unknown, which leads us to believe that the work we do not do ourselves will be less qualitative. However, it is quite the opposite: humans are more likely to make mistakes than a well-oiled automated platform, and research shows that customers who automate their collection strategies have higher collection rates.
B. Benefits of accounts receivable automation
Automating your AR is a catalyst for business growth.
• It gives you a deeply accurate insight into your cash flow, as you can easily access real-time data relevant to payments, which positively impacts your decision-making.
• It optimises customer satisfaction by empowering customers whilst streamlining payment processes. When paying on a customer-friendly portal with crystal-clear updates on payment status, your customers become active collaborators instead of just payers. Empowered, they find it easy and convenient to pay you, choosing their favourite method.
• It optimises your cashflow. As a result of a highly personalised and empathetic approach instead of cold, generic dunning letters, your collection performances improve, bringing much-needed funds to your company. It also optimises your cash flow by reducing the number of human mistakes that can affect manual invoicing.
• It smoothens your workflow, as you don’t need to outsource your accounting or hire additional people to do the job the platform does so well.
II. Key Considerations for Choosing an Accounts Receivable Automation Platform
Choosing an AR automation platform is just as important as choosing the right business partner. It is the ally that can help your business scale up and expand its growth.
A. Business requirements assessment
Before signing up, you should ensure that you know your requirements and that they match your chosen platform’s capabilities. You should spend time analysing and defining your priorities and your long-term strategy. What are you expecting from your automation platform? What are the pain points you need to address? What manual processes hinder your workflow? Answering these questions will save you lots of time and head-scratching when choosing your newly acquired platform.
B. Features and functionality
There are non-negotiable features to look for in an automation platform, meaning that you should hardly consider adopting a platform that does not propose these services:
• Invoice distribution, which automates the invoice-sending process to accelerate your invoice-to-cash
• Customer communication and reminders. Customer relationships are vital for your business and are sometimes at risk during collection. That’s why you should ensure your chosen platform adopts mindful communication methods with your clients. Some of the most advanced platforms on the market use Artificial Intelligence to mimic your customers’ tone of voice and style and inspire trust and sympathy.
• Payment processing. Receiving payments through your chosen platform directly and including payment links in your communications makes a significant difference in payment success rates. A recent analysis of Kolleno’s platform data revealed that embedded payment links in any type of communication increase collection by 39% when there is one payment option (like card payment) and by 51% when there are two (like card payment and open banking).
• Payments reconciliation. Reconciliation is the most cumbersome, error-prone task when processed manually. Automation is, therefore, a game-changer.
• Reporting and analytics. With the payment data gathered through the platform, you gain precious insight into your customers’ payment habits at present, but even for the future, thanks to predictive analytics. You also get insight into your cash flow to make accurate, informed decisions & reduce your firm’s financial risk.
• Integration capabilities with existing systems. Connecting your chosen platform with your ERP should be seamless, and all integrations should be effortless and take just a few seconds; whether it is Xero or Quickbooks, the platform should synchronise all of your invoices in a flash.
C. Main criteria to look for:
Don’t ask for anything less than perfection from your platform, but ask especially for :
• A customer-centric outlook that will show through user-friendliness and ease of implementation, customer support and training. The onboarding process should take at most ten days to get you up to speed with the platform and ready to collect invoices.
• Security and data protection. Ensure your chosen platform takes data privacy and confidentiality seriously and strictly complies with GDPR and global data privacy legislation to ensure your information is used to what you have agreed to. Look for an ISO 27001 certification, TLS 1.2 and AES-256-bit encryption to secure your data in case of cloud storage (which should also be SSL-certified).
Take Away: Dive in!
We recommend taking your time when researching and evaluating Accounts Receivable Automation Platforms before you decide. But dive in once you have identified potential vendors, compared their proposals, requested demos and trials, and asked all your questions. Don’t forget to anticipate the potential adjustment period after the implementation and have your teams ready to adapt with you. The benefits of your business are worth the change. Having guidance and support in decision-making makes all the difference, so do not hesitate to use our buyer’s guide along your journey.