Accounting & Audit Alert- Digitizing the accounts receivable process
While digitalization continues to take hold of the business world, the billing and collections functions for many organizations remain largely paper based. Businesses that automate the accounts receivable process may accomplish several operational and financial goals. Here are five key benefits that organizations can unlock when they “go digital.”
1. Manual processing is minimized; efficiency is maximized
Generating a paper invoice is a laborious process, especially when there’s a digital alternative. Instead of creating, printing and mailing an invoice, organizations can autogenerate electronic invoices and e-reminders for overdue payments.
This reduces the administrative burden considerably. Plus, e-billing saves on office supplies such as paper, envelopes and stamps.
2. The payment process is faster
Digitalization streamlines the cash conversion cycle. The accounting department doesn’t need to spend time mailing paper invoices and late notices. Instead, staff can be reassigned from administrative tasks to value-added ones, such as budgeting, forecasting and cash management.
On the flipside, customers that pay electronically — or set up an autopay option — don’t need to waste time cutting a check. Plus, the recipient of an e-invoice may be more likely to pay quickly to capture discounts or merely remove the payment from their to-do list.
3. Customers can use their preferred payment method
Instead of forcing customers to issue paper checks, they can make payments using digital payment options, including credit cards, ACH or wire transfers. Businesses that sell directly to consumers may also accept payment via PayPal, Venmo or other digital payment apps. These alternatives may incur lower fees than those charged by credit card companies.
4. Customer loyalty may grow
Organizations that facilitate digital payment are easier to do business with. Reducing customers’ administrative burdens can, in turn, increase customer loyalty. It can also remove the potential for conflict that may result when payments go missing or arrive late.
5. The potential for fraud decreases
Paper checks may be susceptible to fraud. Digitalization removes the need to store and mail paper checks, mitigating the potential for employee fraud. And because there’s no longer a need to mail checks, it prevents the interception of checks by a third party.
We can help
Contact us for help digitalizing your accounts receivable process. We can also help train your staff to transition to more strategic roles in your company.