In this guest blog post, our friends at Nodus look at improving the accounts receivable process.
Accounts receivables teams are often challenged with outdated manual processes, slow collection speeds and overall high operating costs. These AR challenges tend to lead to overdue payments, poor cash flow and disgruntled customers, all of which can have a large impact on your business.
So how can you improve your AR process for both you and your customers? Here are 4 ways to get started…
Automate your collection process
The collection process often involves many repetitive tasks that require a lot of time and attention to detail. These tasks include sending invoices and payment reminders, collecting and processing payments, and applying payments to the appropriate sales documents. When a business tries to manage these tasks manually, they often see more mistakes and longer outstanding payments. In fact, businesses who rely on manual AR processes tend to see longer Days Sales Outstanding (DSO) averages than businesses who rely more on automated processes.
Fortunately, most tasks related to the accounts receivables and collection process can easily be automated with the right technology. By setting these tasks on autopilot, your team will spend less time managing tedious, repetitive tasks which will give them more time to proactively engage with customers.
Here is a list of some of the AR processes that can be automated:
- Sending out invoices to customers
- Sending payment reminders
- Processing payment information, like credit cards, Paypal, etc.
- Sending out payment confirmation receipts
- Applying payments to outstanding invoices
Integrate payments with your accounting system
When incoming payments are processed, the payments should automatically be integrated directly into the accounting system. This integration will help you avoid double entry of data, which slows down the collection process and greatly increases the chance for mistakes. If invoices have mistakes, they are more likely to be disputed by customers, causing additional work and delayed payments. Integrated payment processing will also provide real-time reporting which gives companies visibility on how much money their organisation has at any given time.
Offer multiple ways to pay
Today’s buyers expect the buying process with a vendor to be quick and seamless. Providing them with more than one way to pay gives them the flexibility that they are looking for. With the increase in eCommerce and online transactions, digital payment options are more popular than ever before. Payment methods can include credit cards, direct debit and alternative payment methods, like PayPal and ApplePay. You can also increase payment flexibility by offering customers the option to sign up for automatic payments, meaning their payment method is automatically processed on a scheduled basis. For recurring customers this is especially convenient because they will not have to manually submit payment each time an invoice is due. Automatic payment options tend to increase customer loyalty and promote timely payments.
Offer self-service payment options to your customers
Giving your customers self-service payments options, like a payment portal, gives them 24/7 access to their account, so they can retrieve invoices, save their payment information on file for future use, make payments, and even review payment history. Now, no matter where your customers are or what time zone they are in, they are able to access their account on their own. This will give your customers more control over their account and can reduce the number of calls to your accounting team.
Nodus specialises in electronic payment processing, customer payment portals, and AR automation solutions for Microsoft Dynamics 365 Business Central. Our expertise in payment solutions assists organisations of any size and industry to automate their accounts receivable process, expedite funding, improve the customer experience, and achieve PCI compliance.
Please contact us to request a demo of Nodus PayFabric, if you have Dynamics Business Central and you want to offer customers the ability to pay invoices by credit card.