AR managers are skilled personnel who are responsible for running accounts receivable activities accurately and efficiently. If you are an AR manager, you can almost view yourself as the backbone of your company’s AR operations providing end-to-end support for all the financial transactions٫ daily.
While AR managers are expected to run daily operations smoothly and keep the cash flowing, most would agree that their jobs sometimes become tedious. This mainly happens because most of the time, instead of focusing on important tasks, they end up spending a high volume of time on low-level tasks. As an AR manager, if you feel the same, then you need to find a modern-day solution that could easily optimize the daily functioning of AR teams and key operations to ensure business growth and profitability.
AR Manager + Automation: A necessity in the current landscape
From being a buzzword to being a reality, automation has come a long way. AR managers are leveraging technology to streamline AR functions and improve cash flow. With advancements in technology, AR managers were able to achieve exponential improvement in performance, including a strong reduction of DSO and elimination of bad debt. If you are looking for solutions that can easily integrate with your ERP and help you automate your AR manual processes, then at HighRadius we suggest a scalable solution such as RadiusOne to get you started in that direction.
Let’s delve into 5 challenges every AR managers should know about and how leveraging automation could help them:
Reason 1: Sending Invoices manually is time-consuming and error-prone
As an AR manager, if you still depend on paper-based invoices, you leave your team strangled with unnecessary manual efforts and put your business in a disadvantageous position. That’s because creating and sending invoices manually can eat up a lot of time every day leaving very little to no time for an analyst to focus on other high-value functions. Moreover, customers should be billed exactly what they owe to you, hence making sure of the invoice accuracy could be a long-drawn task.
To avoid looking unprofessional and save your team from the hectic manual process, you need to make sure that accurate invoices are reaching the correct customers on time.
How can Automation help?
With RadiusOne e-invoicing solution you can automate the delivery of invoices and account statements through email or push the information into popular SMB accounting software including Quickbooks and Xero. You can save the cost of creating thousands of paper invoices and help save working capital for other essential business functions. Moreover, you can easily track the invoice delivery, and in case of any dispute, you can quickly identify the problem and resolve it at the earliest.
Reason 2: Delinquent Accounts are inevitable
Customers can be difficult sometimes. Even if you have good invoice management policies and practices, you will still end up with some customers paying late. On an average analysts spend more than 2 hours daily identifying risky customers who are likely to default on their payments. And another 2-3 hours get wasted in writing and sending reminder letters to the customers to make them aware that they have missed their payment due date.
Some customers can be tricky and for them, analysts mostly need to make calls to pursue them to make their payments. To drive effective collection calls, analysts end up spending another couple of hours gathering information such as account details, past correspondences, and failed promises made by customers if any. As an AR manager, you can automate almost all of these manual processes and give a great deal of time back to your team.
How can automation help?
With RadiusOne Collections solution you can configure the collector’s dashboard with account-level actions and prioritize their worklist daily. For delinquent accounts, you can automate the dunning process with an easy-to-create correspondence template. You can easily send and track en masse collections correspondence to scale collections outreach. For difficult customers, the solution provides a VOIP calling feature that allows collectors to call customers directly from the solution and gives centralized access to collaboration history to avoid the hassle of collecting account information before making a call.
Reason 3: Getting paid is not as easy as it looks
Customers generally do not pay according to your invoices, rather they prefer to pay according to their records. If there is a mismatch between your invoice details and their internal records, they will hold back on the payment until that gets resolved.
Another reason, customers might be delaying payments could be as simple as not having the payment mode of their choice. If your current payment methods do not align with your customer’s choice, you are bound to encounter problems. As an AR manager, if you find your team spending hours chasing customers for payments, you need to think about easier ways to get paid.
How can automation help?
With RadiusOne AR Suite, you can help your customers access and manage invoices and accounts statements through a self-service portal. Your customers will easily be able to create disputes and make payments according to their preferred mode of payment including ACH and credit cards with just a few clicks. Alternatively, with the RadiusOne solution, you can also enable a ‘Pay Now’ option embedded in your dunning emails and guide your customers to a guest page where they can also choose their preferred payment format and make the payment even faster.
Reason 4: Ineffective Credit Management can break your business
Most AR teams are unaware of what credit information to collect from new customers before onboarding and extending credit to them. Without complete and valid information, scoring customers can put your business at risk. Credit management teams spend up to two hours every day gathering credit information, manually putting them into the system, and evaluating the credit terms in most mid-sized businesses.
Moreover, the absence of a credit scoring model and centralized credit information makes it harder for analysts and managers to make informed credit decisions. As an AR manager, you need to find ways to access credit data easily to fast-track the credit approval process and onboard customers faster with ease.
How can automation help?
With RadiusOne Credit Solution you get access to online credit application templates with all the essential fields required to capture complete and valid credit information. The solution also comes with a credit scoring model with built-in credit data and algorithms to help you auto-assign credit risk, category, and score for your customers. You can also Standardize workflows for credit management to ensure that important credit decisions such as credit approval and periodic credit reviews are approved through the right hierarchy.
Reason 5: Cash reconciliation at an invoice level is a resource-intensive process
Just knowing which customer has paid is not enough. As an AR manager, you need to know invoice level details and map every payment with its respective invoice. And at present, if you are manually reconciling your cash then you are wasting a lot of time on something that can be easily automated. For most mid-sized businesses, cash reconciliation is a slow and tedious process. Capturing remittance information and matching with invoices is not only a time-consuming process but can also drain an AR team’s resources leaving them less time to focus on other high-value activities.
As an Ar manager, you need to find ways to reduce manual intervention for invoice matching and easy capturing remittance data to help your team focus on other important daily tasks.
How can automation help?
With RadiusOne cash reconciliation solution, you can automate remittance capture across diverse sources and formats including emails, check stubs, and web portals. With AI-enabled data capture, you can automate invoice matching with customers and identify short payments.
Moreover, you can also auto-link payments with remittances without any manual intervention and errors. This could easily free up analysts’ time and everyday focus on other critical tasks such as credit and collections.
How can you get started?
As an AR manager of a mid-sized company, here are few things you can do to help your company optimize AR processes:
- Make a consolidated list of all the manual and time-consuming tasks your team goes through every day
- Discuss how you could automate all the manual tasks with your team and higher management
- Make a list of features necessary for the automation
- Evaluate various solutions that can help you with the automation
- Invest and measure ROI for long term growth
At HighRadius, we have been helping our mid-market customers in this regard. Want to learn more. You can reach out to us or get a free demo now!