Digitize and Automate Accounts Receivable Workflow

Posted on December 7, 2021

The sale of goods and services on credit is an everyday fact of life for many firms. Offering credit to customers can be a smart way to increase sales and grow a business. However, managing the accounts receivable (AR) this generates calls for a disciplined and robust end-to-end process to collect payment from those sales on credit. Otherwise, a firm could find it has cash flow problems that limit or prevent profitable success and growth. Once a customer is credit approved, credit terms are agreed upon and a sale on credit is made, there are many steps of the AR process that may still be manual, and paper-driven. These manual steps can lead to miscommunication of sales/credit and delivery terms, slow invoicing, drawn-out payment collection, difficult AR reporting and reconciliation, and more. Firms that digitize and automate as much of the accounts receivable workflow as possible can avoid many of these challenges.

For sales orders that still arrive in an organization in paper form, using a document and content management solution that has an intelligent capture feature allows a paper sales order to be scanned, pertinent information about the sale extracted to populate ERP systems and routed to appropriate departments for approval, and an accurate invoice generated to the customer. These document and content management systems can also be used to capture and extract information from electronic sales orders attached to emails, orders that arrive at the organization as PDFs, orders that come from customer web portals, and orders that arrive in a multitude of other digital formats. Eliminating manual data entry steps by automating this part of the process reduces errors, speeds up invoice generation, and ultimately expedites AR collection from the very start of the process.

Modern document and content management solutions can set up workflows that automate the tracking of invoice aging and payment collection steps. Once again, using intelligent capture features, customer information, sales amounts, specific terms, and the date of an invoice can be extracted from paper or electronic invoices. This information can be used to automatically create aging reports and even automate payment reminders to customers. Reports that include notes from the credit collection team can be run at any time to make reconciliation, debt write-off, and future credit decisions easier. Freeing up the AR team from doing these steps manually allows them to chase down the critical slow-paying accounts that provide the most cash potential to the firm and drive down days outstanding sales (DSO) metrics.

Digitizing and automating exception processes can appreciably reduce the review, and authorization or refusal of special terms sales may have included on a sales order, or how a firm processes collection efforts for a special customer. Workflows created in a document or content management system can flag sales orders, invoices, or other documents that fall outside established thresholds and automatically route the documents to higher management levels for review and decision making. Digital signatures can be used to provide approvals, or the documents can be immediately sent back to sales or the collecting department with instructions on how to remedy an unauthorized exception. Removing the need to print paper documents and find an approving manager to review and sign those documents speeds up sales order, invoicing, and collection processes, greatly improving cash flow into the business as well as increasing customer satisfaction.

When it comes to handling customer inquiries about pricing, terms, invoice status, and payments, a digitized AR process makes it easy and fast to search and retrieve information to respond to their questions. A digital document or content management solution lets customer service, AR teams, and management quickly input the customer’s name, account number, invoice number, or other information and immediately have the needed data available to them on their computer screen – whether they are in the office or working remotely. There’s no need to take valuable time to search for paper documents in multiple locations, which speeds up customer service and reduces costs by removing the need for expensive filing cabinets that take up valuable office space. Additionally, these solutions can automate archiving processes, ensuring record retention and deletion policies are followed and that the organization complies with security and privacy regulations.

The workflow management experts at Centric Business Systems can help identify the steps in your AR process that will benefit the most from digitization and workflow automation. Understanding that each organization we work with is unique we custom-tailor document and content management and workflow solutions to meet your specific challenges and to exceed your expectations. Contact us at (877) 902-3301 or visit us at www.centricbiz.com  to schedule a complimentary consultation on how digitizing and automating your accounts receivable workflow can improve your cash flow and grow your business.