Automated accounts receivable: Solving the blind spots within ERP and taking control of AR processes
But it can't end there, or at least it shouldn't.
Even the most robust ERP systems and software have blind spots, and more often than not, the accounts receivable team gets the short end of the stick. Let's take a closer look.
Understanding your ERP system
Your ERP is a critical part of running a business, but like most well-run machines, it's not the only part. In brief, your ERP system should ideally allow you to include inputs from various departments, such as HR, marketing, sales and manufacturing. However, for accounts receivable in particular, there are various nuanced processes (and challenges) that still require some elbow grease (to say the least), even with a full-scale ERP at their disposal.
For example, while ERP systems are significant tools for gathering data and automating a variety of business processes, there's limited functionality concerning the granular data needed to effectively manage tasks that many AR teams still face daily within the collection and payment process. In fact, according to research, the top three places ERP systems fall short for users is data accuracy, user experience and analytics.
Although the data may exist somewhere in your ERP - extracting said data and applying it to AR processes in a strategic manner is near impossible without supporting software that can help streamline operations and fill critical gaps within collections processes.
Cue automated accounts receivable software.
How AR software elevates ERP systems
Think about your current AR process and about the tasks, challenges and cash-flow bottlenecks that keep your team up at night. Even with an ERP system in place, there are still processes that may feel ineffective and time-consuming such as:
- Ineffective communication between AR teams and customers
- A lack of real-time and historical data
- Frequent non-allocation of payments
- Order to cash bottlenecks
These challenges are often considered part and parcel of AR processes, when in actuality they are the consequences of ineffective and outdated AR management - which is where Accounts Receivable Automation comes into play. Automated accounts receivable technology connects and supports your ERP system to elevate and streamline AR processes. By working in tandem, AR automation software leverages your ERP system to streamline laborious tasks such as invoice posting, payment allocations, balance reconciliation, and the handling of disputed invoices.
But it's not just about speeding up the AR processes.
The benefits of connecting AR software with your ERP
Cash is king - AR software understands that and helps your AR team break the credit-to-cash bottleneck. Accounts receivable management technology not only automates manual tasks, but provides finance team members with the necessary tools and insights to improve cash flow, boost client communication and transparency, reduce debtor days and focus their time and energy on more strategic tasks within the accounting department.
Curious about what AR automation can do for your business? Read more in our credit controller's guide to accounts receivable automation software and start your journey towards financial information symmetry integrated with account management tools.
Alternatively, experience it for yourself, with System1A, in one application to manage all your company's accounts, communications, deliveries, interactions, payments, receipts and reporting.