SSON Report:

Automating Accounts Receivable

AR is made up of numerous elements that are integral to its performance. The systems, processes and professionals dedicated to AR ensure that payments are collected on time, every time, and without mistake.

At a high level, AR is critical because it controls cash flow. Optimising AR ensures that sales translate seamlessly into collections – considering the current climate.

So it’s all the more surprising that accounts receivable is still relegated to the “back office.” Poor AR practices not only suck productivity from a business, but also produce a ripple effect that touches many aspects of an enterprise.

Direct consequences of poor AR management include:

• Missed payments: Enterprise customers forget or neglect to pay their bills, and the lack of a reliable accounts receivable process in place means the gaps in incoming revenue are overlooked.
• Unsent invoices: An accounting system allows invoices to be automated, but the process needs to be audited regularly to ensure these are sent out on time, based on your agreements/contracts.
• And of course… Lack of cash flow: What would happen if you found yourself unable to pay your overhead, meet payroll, or take advantage of a business opportunity when it presents itself? These are all critical consequences of failing to manage accounts receivable.

Any one of these missteps can cause far-reaching issues for even successful and profitable businesses, so implementing a stringent and reliable methodology is key.