How does your current Accounts Receivable Process work? How much time is spent printing and mailing invoices to each customer? How about cash application? Are you receiving customer checks in the mail, manually logging them, and then manually applying each to the customer’s account? These processes are time-consuming, labor-intensive, and error-prone.
A significant portion of the Accounts Receivable Process can be digitized thus eliminating many manual steps, improving efficiency, and allowing your finance team to focus on value-driven areas, such as forecasting, budgeting, and financial analysis.
What is meant by “Digitizing”? In the world of finance, digitizing means converting information of any type into a digital format. The idea is to make information easier to preserve, access, and share. Once information is digitized, it can help automate processes and systems that were previously manual.
Here are some Accounts Receivable billing and payment suggestions to consider.
• Instead of creating, printing, and mailing a customer invoice, why not convert the paper invoice into a PDF document and electronically mail it to each customer. Depending on your software, you may only need to have a proper customer email address. It’s a couple of keystrokes and you’re done. Think of the labor time saved, not to mention a reduction in the number of office supplies to support the mailing process. In addition, you now have the document electronically filed – so access to retrieve a document is instantaneous. No need to store in a filing cabinet and eventually move to physical archives which often is a dusty old room or place in your warehouse, not organized, with banker boxes not properly labeled.
• Customers historically send a check by mail for payment. This is old school. Today’s technology allows a business to capture the customer’s payment electronically (in the banking world this is referred to as an ACH payment), moving funds usually the next day from the customer’s bank account to your bank account. In addition, and at the same time, the check can now be automatically applied to the customer’s unpaid invoices. You need only the customer’s bank routing number and bank account number. The manual steps involved previously have been eliminated. The customer no longer needs to cut a check and is more inclined to pay quickly to take advantage of early-pay discounts. Think of time savings and cash flow benefits.
• We all like convenience – and ease of doing business. Digital payment processing facilitates a simplified more streamlined process for your customers, which they will appreciate and will result in increased loyalty.
Digital technology continues to grow and is making business operations more efficient. Your competitors will be taking advantage of this opportunity – so should you.
If you would like to discuss how to implement the digital option, please feel free to give us a call.