How accounts receivable automation can save you time and money

Automation is a buzzword in business now, and rightly so. The best digital solutions can transform your business from clunky and slow to efficient and productive overnight. But with so many solutions on the market, it’s hard to know which you should be investing in.

One area of your business that you might not have thought about automating is accounts receivable. Improving your accounts receivable process may not sound like the sexiest way to level up your business, but it can make a serious difference to your cash flow.

What is accounts receivable automation?

Chasing invoice payments is an admin burden most businesses could do without. According to research, the average business spends an hour and a half chasing payments every day. That’s over seven hours a week that could be better spent elsewhere.

Accounts receivable tools plug into your accounting software and send automated payment reminders to your customers. These reminders follow a predefined schedule which can help guarantee the best results, although you can adapt the sending schedule and email templates to suit your business.

What are the benefits of accounts receivable automation?

Accounts receivable tools are proven to get businesses paid faster. Rather than relying on a team member to chase your customers for payment whenever they have a spare moment, automated tools ensure payment reminders are always sent promptly and professionally during work hours.

The results speak for themselves. Satago users see an average 30% reduction in aged debt, with 70% of invoices paid after the first email reminder. What’s more, businesses who use automated invoice chasing software often find that their customer relationships improve. With fewer misunderstandings over late payments, customers are more likely to return to your business.

How to implement accounts receivable automation in your business

As with any new piece of technology, when you start using accounts receivable software it’s important that you appoint someone on your team to manage it. Management will involve:

• Creating the email templates

• Setting the sending schedule

• Responding to any customer queries

If you’re a small business owner, you may wish to take these duties on yourself. If you’re a larger enterprise, you can hand the responsibility to your accounts team.

The long-term effects of accounts receivable automation

After implementing accounts receivable automation, your debtor days should start to come down. You can keep track of your progress by looking at your debtor days report in your accounting software.

You may also notice that you’ve collected debt that would otherwise have been written off. A reduction in debtor days and aged debt will mean more cash in the bank that you can invest back in your business.