19 AR automation benefits you'll love

Discover the many advantages of automating your AR processes, from increased efficiency to improved customer satisfaction.

The number 19

Managing your accounts receivable can induce headaches, but it doesn't have to. You can improve the efficiency, speed, and accuracy of your receivable processes by implementing an AR automation solution

There are many advantages and reasons to add automation to your AR workflow. Below we discuss 19 business-changing benefits of AR automation.

1. Better customer service

The easier your payment process is, the faster B2B payments come in and the more satisfied customers are with the experience. Improving your AR process's accuracy benefits both you and your clients by saving them the hassle of correcting invoices.

Automation helps you show consistency in the customer experience due to your timeliness and accuracy in sending out invoices.

2. Faster payments

Manual processes are time-consuming and more error-prone, causing delays in incoming payments. To get paid faster, you need to remove bottlenecks in your process, especially manual tasks.

Automation makes invoicing faster and more precise, leading to faster payments. You can also automate payment reminders for your customers so you receive less late payments.

3. Advanced security

Implementing AR automation software can enhance your AR process's security.

Instead of emails and paper files, which are more vulnerable to security breaches, customer data and payment information is uploaded in a secure platform.

4. Reduced payment processing costs

Automation can actually reduce the cost of payment processing. Savings come from reduced labor, better workflow, and lower overhead costs.

5. Improved speed and efficiency

AR automation speeds up your AR process by:

  • Cutting down the time needed to create and send accurate invoices
  • Streamlining how you collect and manage payments

The invoicing process can be complex with all the reconciling, document matching, sending invoices, and sending payment reminders that need to be done.

Automation eliminates time-consuming manual tasks and reduces errors.

6. Reduction in human error

Tedious, repetitive manual tasks in your AR process are error prone. Mistakes during invoicing can cause significant delays in how quickly you can collect cash. Automation improves your accuracy by eliminating manual work.

7. Cost savings

Manual processes consume more employee time β€” and they cost more.

Significantly reducing the amount of time needed to handle the AR process cuts down on administrative costs.

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8. Improved cash flow forecasting

Automation can improve your cash flow by making your forecasting more accurate.

It improves your ability to forecast cash due to a more predictable collection pattern and better reporting. By speeding up your AR collection process, you can maximize the amount of cash collected, increasing your cash flow.

9. Enhanced dashboards

Automation lets you track and improve metrics like AR turnover and Days Sales Outstanding.

This added data can enhance your dashboards, allowing you to pull insights from your process. 
Enhanced dashboards enable you to make more data-driven decisions on how to improve your AR process.

10. Standardized processes

Automating your AR allows you to implement a standardized approach to your workflow, maintaining consistency across your entire AR team. Not only this, everyone can get access to valuable insights on the AR process by accessing the AR automation platform.

11. Access to real-time data

An AR automation platform gives you real-time visibility into payment statuses.

You can easily get answers into where an invoice or payment is in the process for each customer, taking away the time needed to track this information down.

Real-time data enables better cash flow management. For example, by using Plooto, Treefrog was able to enhance their visibility on when collections will occur leading to ease in cash flow management.

12. Better employee retention

Manual data entry is tedious for your finance teams and limits their time for higher-level tasks. These factors decrease the enjoyability and willingness to stay at a job.

As your business grows and the workload increases, you don't want your employees overworked and stressed out, as this can lead to employee dissatisfaction.

Automation improves employee experience by reducing manual tasks and workloads. This nurtures a more positive employee experience as they contribute more to higher-level tasks and spend less time on tedious processes.

This improves retention rate, which in the long run will save you employee turnover costs.

13. Improved compliance

Manual processes make it more difficult to be compliant with regulations and revenue recognition standards, as it complicates tracking. AR automation software tracks payments, simplifying how you view incoming money flows and access records.

14. Enables sustainable growth

Manual processes hinder your ability to keep up with growth as it will increase the workload of your finance team.

There will be a limit to the efficiency you can experience with an increase of volume with manual processes. AR automation can increase your capacity to handle growth.

15. Increases productivity

Manual AR processes can be a hindrance to scalability and productivity. Automating repetitive tasks will free up time for your employees to focus on higher-level tasks, improving their productivity.

16. Lower DSO

Days Sales Outstanding or, DSO, represents the average number of days to collect payment from a sale. It's an important metric for evaluating the efficiency of your AR system. Ideally, you want your DSO as low as possible.

You can reduce DSO by:

  • Speeding up invoice processing
  • Reducing errors in invoices and receipts
  • Sending follow-ups and reminders
  • Offering incentives for early payments

Automation can greatly improve the efficiency and speed of your AR process, which will lower your DSO metric.

17. Shorten your cash conversion cycle

Cash conversion cycle, or CCC, is how long it takes to convert inventory into cash inflows. Your cash cycle can give you insights into the speed of your AR collection.

Automation can help to speed up your collection process, and by proxy, improve your CCC.

18. Seamless integration

AR automation software can integrate with your existing accounting software which gives you better control over your financial operations and increases visibility. This streamlines your reconciliation process, saving you time and improving accuracy.

19. Less paper

Less paper means electronic invoices cost less then paper ones. Plus, they don't take up any physical storage and are more secure than paper invoices.

Plus, less paper is greener. 

As you consider the benefits of AR automation, keeping in mind that most of these benefits also ring true when you invest in an accounts payable automation software, too.

What to look for in an AR/AP solution

When looking for a receivable automation software look for solutions that fit your unique business needs. Consider:

  • Features offered: Compare the features the AR solution has and the features you need to improve your AR process. Most also offer AP automation software as part of the package.
  • Ease of use: The AR software you choose needs to be user-friendly and easy implement.
  • Support: Look for solutions that offer reliable customer support and help you through all your questions to best suit your business.
  • Integration: Ensure the solution you choose integrates with your existing accounting softwares.
  • Right price: The price of the software should reflect the benefits you receive but shouldn't be too expensive.

Plooto is an all-in-one AP and AR software that gives your business total control over your cash. With Plooto you can eliminate manual tasks and simplify your accounting process with automation. Plooto seamlessly integrates with Xero, NetSuite, and Quickbooks to make reconciling painless.

Get more time to focus on what's important try Plooto today β€” begin a 30-day trial

Reap the benefits of AR automation today β€” for free

Get started with a 30-day free trial of Plooto and unlock the power β€” and all the benefits that come with β€” of accounts receivable automation.

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