The top three benefits of automated Accounts Receivable

Long process photo technique showing blurred lights from cars on highway, with city behind at night | The Top Three Benefits of Automated Accounts Receivable

Looking to Streamline Your Accounts Receivable? Go Digital.

Have you ever considered how much cash may be tied up in your balance sheet, or what this might mean for your business? While most organisations do have “formal accounts receivable policies that dictate when to bill, how much to bill and when to collect,” as Deloitte explains, many don’t “enforce those policies effectively — or even adopt the right processes at all,” leaving them walking “a cash flow tightrope.” 

And cash flow isn’t the only concern for companies that still rely on outdated, manual accounts receivable (AR) processes.

Across the world, lack of visibility, tightening regulatory mandates, expanding security threats, and varying distribution channels and invoice formats are increasing supply chain disruption, late payments, profit leakage, non-compliance and fraud. In fact, paper processes can cost upwards of 200% more than electronic invoicing, according to the The Institute of Finance & Management (IOFM).

Therefore, “it is no wonder almost 60 percent of businesses are dissatisfied with their receivables processes.” 

So, what’s the best way to shorten long order-to-cash (OTC) cycles, unburden yourself from compliance and security risks, solve spend management issues, maximise cash flow, and position your organisation for world-class status? 

Automate your AR, and begin your digital transformation.

Why You Should Automate Accounts Receivable

Change can be intimidating, especially when it involves implementing new technologies or breaking free of old processes, but the benefits of automated accounts receivable are well worth any initial discomfort.

Infographic: Processes and Optimisation Opportunities for Invoice and Bill Issuers | The Top Three Benefits of Automated Accounts Receivable

1. Speed and Efficiency

Without digitisation, the typical AR invoicing process takes 50 to 72 days per invoice, and includes the following steps:

  1. Receive statement of sale
  2. Create customer invoice
    1. Ensure clarity of information
    2. Ensure completeness of information
    3. Ensure proper numbering
  3. Print customer invoice
  4. Mail or email customer invoice
  5. Track invoice and manually confirm receipt 
  6. Receive payment
  7. Record deposit
  8. Print AR report

Plus, if there are discrepancies, or the customer pays late or fails to pay, there’s a back-and-forth prior to any approval.

With an automated solution, you submit your invoice in a preferred format, and it’s immediately processed, translated, enriched and validated, delivered directly to your buyers anywhere in the world, and then archived to meet regulatory requirements; the entire automated process takes mere minutes to complete.

According to Billentis, a typical AR employee can process between 7,500 and 30,000 paper invoices per year, compared to more than 125,000 electronic invoices, for up to 17 times greater efficiency.  

Why? Simplicity, consistency and visibility. 

Imagine having all your invoice data in one place, and being able to analyse in seconds any aspect of your accounts receivable process.

With automated invoice processing you can improve the accuracy of each invoice, your uniformity across invoices, your process control, reporting, accountability, transparency, and archiving.

Closeup of businessman's hands typing on laptop, with analytics on the screen, and glasses and mobile phone to the side on the desk | The Top Three Benefits of Automated Accounts Receivable

2. Cost Savings, Cash Flow and Cash Forecasting

With a traditional, paper-based accounts receivable process, AR employees spend significant time laboring over each invoice, responding to customer enquiries, handling exceptions, and recording data, extending the OTC cycle by up to 90 days per invoice. 

AR automation streamlines and expedites the whole process, freeing up your accounting and finance departments to focus more on value-add tasks, and increasing the working capital you need to decrease debt, lower costs, invest in innovation, fund growth, and outperform your competitors. 

Indeed, while “it may require more than 50 mouse clicks to process a single sales order in a manual environment,” with an automated system it can take a single click

With reduced expenditures on labor, printing and mailing overhead, as well as fines and fees, automating AR can save approximately seven euros per invoice, or 60% to 80%, generating even greater liquidity.

Furthermore, real-time dashboards, ad hoc reports, and other automated tools provide transparency across the AR process, allowing you to instantly access critical data — like delivery status, amount owed, payment due dates and paper performance over time — that enables cash forecasting and delivers key insights on opportunities for improvement.

In essence, you can turn a back-office function into a driver of strategic decision-making.

Woman at white board pointing to yellow and pink sticky notes, with coworkers with laptops at a conference table in the foreground | The Top Three Benefits of Automated Accounts Receivable

3. Security and Compliance

Paper- and email-based AR processes are susceptible to data breaches, phishing attacks, fraudulent invoicing, and GDPR non-compliance, along with the resulting financial losses, and businesses across the world are facing new kinds of security risks and invoice fraud every day.

Automated accounts receivable, on the other hand, sends 100% your outbound invoices electronically through a single provider, regardless of the invoice delivery method or the customer’s industry, size, technical prowess, or geographical region.

Everchanging, location-specific regulatory mandates make compliance complicated for companies that try to manage local relationships and connections on their own; e-invoicing, on the other hand, enables real-time (or near real-time) electronic submission of original documents and invoice data to authorities, ensuring tax compliance, legal security and cost reductions between 37% and 39%.

Go Digital Today

Are you ready to transition from paper pushing to digital transformation, and garner maximum value from your invoices?

PCB circuit board of electronic device | The Top Three Benefits of Automated Accounts Receivable

Automate Your Accounts Receivable

With Total AR from Tungsten Network, you’re 100% digitised from day one, allowing you to release cash to the balance sheet and gain business agility.

We simplify and streamline your entire accounts receivable process, from invoice delivery to payment submission, increasing productivity and saving you and your customers time and money.

Total AR provides:

  • Guaranteed invoice delivery
  • Faster payments
  • Increased cash flow
  • End-to-end process visibility
  • Complete compliance with government mandates
  • Secure and compliant archiving
  • Improved customer relationships
  • Less exception handling
  • No re-keying into systems and portals
  • No added IT integration costs
  • Ability to optimise collection, disputes, and cash allocations

Learn more about Total AR