For many businesses, accounting processes have been the primary sources of their frustrations. From the never-ending input of costs to the taxing process of balancing, teams and employees in this department have long complained about the resources and effort it requires. Technology’s answer to this problem is simple: digitize it.
According to AccountancyAge, 78% of small businesses are already transferring their accounting processes over to cloud technology. They are thus at the forefront of applying the solution that could help address an accountant’s concerns. This trend has caused a ripple effect within multiple industries in that companies have rushed to catch up to the movement of small businesses.
Accounts receivable software is one such system that has received the most attention in recent years. This uptick has been associated with the fact that accounts receivable is critical in calculating a company’s ability to coordinate with their debtors. Accounts receivable is also considered as an asset because it can usually be converted to cash.
As such, companies cannot afford to risk their accounts receivable as doing so could impact all the financial aspects of their operations. If you need further convincing, here are the top 5 reasons why you might want to invest in an accounts receivable system:
- Profit Strategy
Technological opportunities, such as eCommerce for small businesses, have levelled the playing field so that startups and enterprises may compete fairly in the market. However, having such an opportunity would be pointless without a proper profit strategy. Herein lies the first reason why you may want to have accounts receivable solutions.
These systems are capable of telling you which products are the most profitable and all the sales trends you’ll need to know if you are to create an effective profit strategy. The best solutions out there may also provide you with loss information, which refers to products that you might want to withdraw from your listings lest it incurs more costs than profit.
- Statement and Invoice Delivery
The second reason why you need accounts receivable software is that it revolutionizes how financial statements and invoices are delivered. With new tax demands and other financial restrictions, B2B companies are hard-pressed to provide statements and invoices as requested by suppliers and partners. These documents represent your company’s commitment to transparency.
Through an accounts receivable system, you can prevent the dispatch of statements and invoices that are missing important details, which can cause your partners to doubt your honesty.
At the same time, you can increase their access options. For instance, exporting these documents to PDF or, even better, sending them via electronic channels can help your customers access the information according to what is convenient for them.
- Customer Communications
Beyond providing you and your customers an improved way to understand where the money goes and what it has paid for, accounts receivable software for business can also improve customer communications.
Countries have begun to invest in the digital economy. The direct result of this trend is that consumers have begun to expect stellar customer service.
By getting the aforementioned system, you can meet this demand by being able to pinpoint which orders are yet to be paid, which payments have already been reconciled, and which ones need additional funds.
Thus, when customers and debtors inquire, you’ll have the information they want right at the tip of your fingers.
- Key Performance Indicators
The fourth reason why you need an accounts receivable system is that it can help you gauge the performance of your business according to the key performance indicators that you define. This part is essential in the accounts receivable process as it can determine how you’re going to move forward not only in terms of the capital you have but also in the products you sell.
Top accounts receivable software solutions equipped with the ability to provide sales graphs will help you determine things like monthly order count all the while identifying the most probable cause of any sales and profit drops.
- Human Error Prevention
Financial and accounting processes rely on consistency and accuracy. Without these factors, companies will not be able to spend and invest their capital wisely and loss-incurring products will continue to hamper performance.
No matter how talented your people are, expecting them to never make a mistake is not only unreasonable but also demotivating. Thus, if you want your accounting and finances departments to focus on the places where you can find profit, collect payment, and fulfill orders, you should use a tool that can automate data entry accurately..
Spending Your Capital Wisely
Investing in an accounts receivable solution also means that you’re spending your capital in such a way that it ensures your company’s place in the future of markets. If you’re convinced and are committed to digitizing your accounting process, use the tips above to choose the best software that fits your needs and enjoy the benefits of having technology on your side.