4 Ways Accounts Receivable Technology Saves Time and Money
What are accounts receivable?
Accounts receivable is the balance of money owed to companies for goods and services. Oftentimes AR refers to goods and services initially provided on credit, with the expectation that debts will be repaid within a set period of time, usually weeks.
Why is it important to track accounts receivable?
By staying on top of payments due, company leaders can rely on this expected cash inflow to sustain and grow their businesses. CEOs can plan and use outstanding receivables to improve cash flow, reduce debts or reinvest in the business.
This is especially valuable for small businesses, given 82% of them fail due to poor cash flow management and a weak understanding of how cash flow affects their business, according to a U.S. Bank study.
What is accounts receivable technology?
Accounts receivable technology refers to the software and digital tools that enable companies to more efficiently track and collect money owed to them. AR technology allows companies to easily see outstanding bills, send and receive digital invoices, and seamlessly incorporate AR data into general accounting technologies.
By integrating processes for invoicing and billing to the cloud, companies can reduce redundancies, shift grueling workloads to artificial intelligence and automate processes. This effort ultimately saves businesses time and money.
How Accounts Receivable Technology Saves Time and Money
Rather than relying on cumbersome paper billing and manual collection, technology enables companies to streamline and automate accounting processes. By using accounts receivable technology, CEOs can ensure that:
Payments are coming in as expected and on time
No receivables are falling through the cracks
Money is automatically deposited into company accounts
Once a company has adopted cloud-based AR tech, they’ll begin seeing a number of benefits. Notably, they’ll save time and money, which allows business leaders to better utilize company resources and improve cash flow management.
Here Are Three Specific Ways AR Technology Helps Companies Thrive:
Streamlines accounting processes
One of the most useful aspects of accounts receivable technology is that it enables processes to be digitized and automated. After an initial set-up where a company can customize templates with their logos and other signage, customized invoice templates can be saved and recycled. Companies can then schedule one-time and recurring invoices, creating repeatable workflows.
Further, companies can utilize a variety of accounts receivable and general accounting technologies to bring all financial data together in one place. Many AR platforms, such as Bill.com, automatically sync with general accounting technologies, such as QuickBooks. This keeps the entire business in cooperation and streamlines the flow of financial data.
Reduces grueling and time-consuming tasks
Historically, a company had to pay someone to open paper bills, send paper
invoices, and follow up manually when a debtor was late to pay. By using accounts receivable technology, these laborious tasks are eliminated, freeing up company resources for other important obligations and initiatives.
Additionally, by linking with other accounting technologies, the general ledger is automatically updated with the most up-to-date information about cash flow. Accounting technology can pull-in historical data to inform financial reporting, budgeting and forecasting, empowering CEOs to make more informed decisions about where to spend company resources.
Frees CEOs to focus on strengths to accelerate business growth
By placing some accounting responsibilities on technology, CEOs regain valuable time. Many CEOs aren’t well-versed in accounting processes and can get caught up trying to manage essential financial obligations on their own. By delegating accounting to technology and financial experts, business leaders can focus on their strengths and other core business activities.
Most financial professionals already know AR technology well
Many small businesses don’t have the budgets to build-out entire finance and
accounting departments. Fortunately, Fractional Accountants can
be hired on an as-needed basis for a variety of accounting tasks. By working with a trusted outsourcing company, such as The A Team, CEOs can access professionals with experience using a variety of accounting technologies. They can provide initial migrations and ongoing management services.
Top Accounts Receivable Technology We Recommend:
Bill.com: a best-in-class accounts receivable technology that enables the automation of billing, invoicing and payments.
QuickBooks: a powerful general accounting platform that communicates with Bill.com and other AR softwares to streamline processes.
Expensify: an expense management app and software that enables businesses to seamlessly track spending and reimburse employees.
AvidXchange: an accounts payable software that digitizes and automates the bill-pay process.
The A Team Can Help You Get Started
Accounts receivable technology can help companies streamline the accounting process and give small businesses better insights into cash flow, an important metric for startup success. The A Team’s dynamic team of financial professionals have extensive experience working with trusted accounting software. Our experts can manage the initial setup of account integrations, customize technology to meet your businesses unique requirements, and provide further consulting and management services. Contact us today for a free consultation.
