Automating AR and AP: 3 Noteworthy Benefits

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Automating AR and AP: 3 Noteworthy Benefits

By CFO Tech Outlook | Friday, September 04, 2020

Automated AR and AP form the foundation of cash flow management, which is the lifeline of the business.

FREMONT, CA: While managing business can be an expensive task in itself, not having the right system to manage cash flow can make it even more expensive. If the business has been in the market for a little while, then improper cash management can bog down business workflows. But properly managing cash flow is tricky and time-consuming. Businesses need the capacity to track all the transactions taking place in the organization and need complete visibility into spending, from collecting data needed for a transaction to initiating a payment. So, how do businesses ensure the smooth functioning of the operations that determine cash flow? By automating Accounts Receivable (AR)and Accounts Payable (AP) functions. Here is more to it.

• More Accurate Invoices

It's perfectly natural for humans to make errors. And accountants have to check invoices again and again to correct these mistakes, which may leave them tired and is certainly not a smart use of time. While ignored, this can affect the company's reputation negatively and can be a potential legal liability. The automation of AP and AR will let firms feed all the data in one place. So even if firms have different teams entering data, they all follow the same steps. This means a streamlined system, consistency in AP and AR process, and flawless invoices for the finance team and accountants.

• Payment Reminders

Automating payment reminders is the best way to save time and make customer communication more consistent. When firms set up automated payment reminders, they can also customize the wording message to make sure that it's friendly, polite, and consistent with the company's communication style. Most likely, customers are just forgetful and will appreciate the gentle reminder, especially if firms make it easy for them to pay by including a payment link.

• Auto-scanning Bills and Expenses

Financial data can get chaotic when business is facing disruption. If the system provides an auto-scan feature, using it will help maintain uniform data. It also helps the organization avoid paper clutter. Paper invoices are often prone to damage, resulting in misplacement of data. They also contain sensitive information, and if they are misplaced, it increases the chances of that information being misused.

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