Here's Why Automating Your AR Can Make or Break Your Company
Mark Fisher, VP of Marketing at Paystand
Paystand was a recipient of The Startup Weekly’s 2021 Software Companies to Watch award.
It’s no secret that 2020 forced companies everywhere to reassess the ways they operate. For some, that meant learning how to cope with an overnight shift to working remotely while simultaneously tackling acute economic strain. For others, it meant being shoved into the spotlight as the pandemic sparked a sudden uptick in demand for what they offered to consumers.
No matter if your business experienced either of these extremes or encountered something in the middle, one thing is definitely clear: the changes brought on by COVID-19 exposed weaknesses that many companies had previously been able to leave unaddressed. Now, in order to survive in this post-pandemic world – and, in order to guarantee sustained prosperity if another crisis comes along – CFOs have to bet on one thing going forward: automation.
Let’s take a closer look at what this means. While the past year has ushered in a digital-first transformation across finance organizations, there are still very few options available for automating Accounts Receivable (AR) tasks. Yet, AR automation is more than just wishful thinking. It’s absolutely imperative for ensuring that operations can continue to occur in remote environments.
Winning finance teams know automating AR is crucial to success
Today, automation and digital tools are recognized as the DNA of the enterprise. However, finance and revenue teams – the lifeblood of any successful business – still spend the majority of their time bogged down by labor-intensive and paper-heavy systems. These include processing and sending payments, collecting checks, reconciling financial data from a multitude of sources, and matching a large volume of transactions. The result? Many hours of lost time and an ever-increasing number of human errors.
In order to break this cycle, it’s essential to first understand that automating your AR can ultimately transform your business by helping it achieve the following:
A more efficient cash conversion cycle – automated processes result in faster payment collections and a reduction in DSO.
A faster financial close – digitizing your transaction systems can help you streamline your financial close with instant three-way reconciliation.
A lower payment cost – digital payments can save you time and money, especially when you don’t have to deal with the process of physical lockboxes and the fees they incur.
A reduction in errors – when payment processes depend on humans alone, they ultimately lead to lost time, damaged relationships, and even lost money through errors like duplicate payments.
The benefits of automating your AR is clear. However, implementing the right AR automation system is critical when it comes to ensuring your company’s success.
CFOs can implement AR automation with tools they already have
Today, most companies trust Enterprise Resource Planning (ERP) systems to act as the foundation of their accounting process and financial health. However, ERP systems are just the beginning. They’re more than systems of record – they can actually be used to set your company up for AR automation.
While it’s true that ERP systems are important for collecting and storing information and speeding up processes like sales cycles, many businesses fail to see past a few critical issues with their ERPs: in fact, most ERP systems promise finance teams full visibility into their data operations, but they really only offer the ability to see data collected two or more weeks after the month’s end, limiting the CFO’s visibility for planning and forecasting. At the same time, they also lack embedded payment functionality to tie invoices to payment options.
Paystand changes that. We offer instant plugins and integrations for the most popular ERPs including Netsuite, Sage Intacct, Xero, and Quickbooks. By integrating with the systems CFOs are most comfortable with, we make it that much easier to automate your AR tasks and collect payments instantly. In this way, companies can immediately digitize their entire cash flow cycles and save time and money like never before.
Small adjustments in AR automation can drive huge impact
Small improvements in your finance organization can lead to significant transformations; that’s why making the shift to automating your AR can be a powerful tool for boosting revenue and increasing ROI.
When it comes to completely transforming your finance department through automation. Here are a few things to keep in mind:
- Automating your AR offers your team more time for strategic planning. It can even provide better data to work with and also free up the time required to create the significant changes you’ve been meaning to make.
- Automation will allow you to manage your payment cycle and get a better view of your cash flow – all from one source of truth.
- Automation will also optimize your financial close with instant three-way reconciliation features and verify against ERP records.
It’s clear that AR Automation is the key to unlocking growth and improving both the predictability and scalability of your business. Making the shift can save millions of dollars a year in transaction fees, human capital, and unnecessary errors. It can also offer more insight into your cash flow and provide increased visibility into what’s to come. That’s why, today, the most forward-thinking CFOs are betting on automation – they know it can help their entire companies when it comes to reaching that next level.
