While the corporate finance back office is the backbone of a business, it’s slow to adapt to evolving technology and innovation; the back office comprises many departments, each handling vastly different tasks daily.
Applying the new technology to those departments has been a great challenge. That’s one of the reasons for the relative sluggishness of digital transformation in finance and accounting. Luckily, the tide is changing. Many teams are looking to employ new accounting and finance automation technologies to streamline and support the team’s tasks. For the AR department, accounts receivable automation means clicking a button will minimize everyday tasks that take up most of the collector’s time. With the advancement in AI and automation, it’s time to change how teams handle collections.
Want to know how AR automation will benefit your business? Let’s look at the essentials of automation and AI in accounts receivable.
- The traditional collection is a tedious task.
AR teams are accountable for handling different vital business tasks. So, tedious manual tasks take up the bulk of the work. Record keeping translates to many hours spent inputting data into the system and updating the older records. It needed detailed attention to notice the discrepancies and trends in the data collected.
Communication is also a challenge- sending many follow-ups to the clients with outstanding bills or developing and sending out receipts for payments made. However, the consistent back and forth will consume a lot of time.
- The power of automation in AR
Accounts receivable is overdue for an upgrade. It’s time for an efficient and streamlined process to allow collectors to handle other higher-value tasks such as maintaining the billing systems, creating reports, or investigating any irregularities. There is a lot to do, and AR teams must have the tools and programs to complete their work efficiently and minimize their time. This is where automation comes in.
AR automation can simplify and streamline the collection process for AR teams. Using innovative technology like natural language processing and machine learning will create a workflow that supports efforts to increase output.
- Account classification and predictions
Account classification is important for prioritizing. So, automated account classification implies collection professionals can categorize their outreach depending on intelligent insights from many player types- slow payers, fast payers, at-risk accounts, strategic accounts, resellers, and government agencies and even ensure up-to-date info to make collection workflow faster.
The AR team will know who pays early or late and everything in between. An effective automated accounts receivable software will handle the predictive remittance forecasting. The AR team will automatically know which clients are likely to pay late or not make payments. Therefore, they will be prepared to implement the right incentives and strategies.
- Integrated communication
Sending and getting correspondence is one of the important features of any collection procedure. It’s important to get everything right and ensure that the team can complete it effectively.
Using automation, clients can get targeted correspondence with the right content and tone to strengthen client relationships and assist your business in collecting money owed at the right time. A bi-directional correspondence automation works with the payer classification so payers can get the most recent and relevant messages.
- Automated metrics
Knowing where the client is in the payment procedure will help the AR team to send the right correspondence and prepare invoices. Through payment tracking automation, the AR team receives real-time updates without staying in constant communication with clients.
On top of payment tracking, the automated system tracks collection metrics that the AR team can utilize to gain valuable insights and notice trends.
AR automation is one of the best ways to improve the financial performance and cash position of your business. Using AR automation software to collect, reconcile invoices and follow up automatically makes it easier. Let’s hope this guide serves to assist you in improving this important aspect of your and your customer’s businesses.