11/17/2023 | News release | Distributed by Public on 11/17/2023 12:56
Accounts receivable solutions can automatically match invoices to purchase orders and can even automatically code invoices without a PO, among many other capabilities to help financial and accounting departments do their jobs more efficiently. In many cases, accounts receivable solutions can also accelerate cash flow and reduce fraud.
There's no doubt that electronic invoicing, known as e-invoicing and accounts payable solutions have taken off, thanks in part to sweeping changes in e-invoicing due to compliance requirements by government and tax authorities worldwide, and as more companies see the benefits of digitizing their operations. But look across many North American businesses today and you'll find less automation around the inbound cash flows of accounts receivable.
There is great potential for organizations to use accounts receivable (AR) automation software to achieve benefits such as improved cash flow, increased staff productivity and reduced fraud. The demand for AR automation is growing, however, as more companies realize its potential after adopting e-invoicing and accounts payable automation strategies.
If you are considering an AR automation solution, here are five best practices when it comes to key functionality offered by solution providers:
It's essential to eliminate data duplication, manual data entry and ensure accurate, up-to-date information. That's why creating e-invoices from ERP or accounting systems should be a given in any AR solution you select.
In short, seamless integration with ERP-generated invoices into your AR automation system provides enhanced efficiency and accuracy.
Invoice data needs to be automatically extracted from an ERP or accounting system and the invoice is converted to the preferred delivery format for your customers or partners. Seek capability to deliver invoices to customers in every format after the invoice is created. Electronic delivery is the standard in all its forms, and the payee needs to have the capability to accept and send invoices in various EDI standard formats as well as XML, PDF, CSV files, mail, etc.
In addition to payment in full for each invoice, depending on your business, type of customer or amount owed, you may want to set up communications to encourage customers to pay only partially or for multiple invoices at once. Automatic reminders before and after invoice due dates, and other courtesy reminders should also be included in the solution. Of course many customers are paying their invoices online today and cloud-based payment portals are convenient as are offering preferred payment options such as credit, debit, ACH and bank payments.
Before payments can be processed, efficient integration of the payment reconciliation processes is central to a good AR solution. The solution needs to connect each step in the invoice-to-cash process of invoicing and collection, making the linking of systems such as ERP, accounting and bank ledgers critical to ensure automatic payment matching to open invoices and proper posting of payments back to the ERP or other internal systems.
Today's AR solutions can accommodate and automate most payment reconciliation systems with external systems such as bank, credit card, cash and digital wallets, but the proliferation of types of online payment services and cryptocurrency have complicated payment reconciliation. Flags and controls to identify errors across systems and identify unpaid and past-due invoices should also be in place. The result is improved accuracy and transparency into receivables.
Reporting capabilities are crucial to any financial and accounting solution. The Generix AR solution has robust reporting, analytics and KPI capabilities for users to monitor the health of their accounts receivables. The solution uses comprehensive AR data, including days payable outstanding (DPO) and days sales outstanding (DSO)[MJ1] , and other information, giving AR and financial departments the information they require to generate pre-built or custom reports.
Staff can get the insights they need, for example, regarding cash flow forecasts, or identify areas of improvement. They can also identify customers which have outstanding invoice balances and take the appropriate action or set new controls or parameters on accounts.
At Generix Group North America, we provide a series of solutions to create efficiencies across your entire supply chain. Our solutions are in use around the world and our experience is second-to-none.
We invite you to contact us to learn more.
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