Enterprises that adopt manual Accounts Receivable usually are forced to spend major share of time in manually pulling together information, and managing collections. As a result, the most important aspect of Accounts Receivable i.e. customer communications (follow-ups and customer service) get only 15% of their time and this directly impacts the receivable collection.

Automating the accounts receivable can help business automates these manual tasks and streamline entire process to improve efficiency and productivity of your team and ultimately improve the collections. However accounts receivable is no magic wand that can disappear all the current AR problems. A solid groundwork has to be performed before the said automation – to identify the core problems and time consuming tasks to seek help of right AR automation tools and execution is performed with right strategy to ensure the goals of the enterprise are flawlessly met.

If you are an enterprise that is wondering the right way to go about your AR automation, then this blog is for you. Here we give a 4step process we usually leverage at Back Office Accountants that can pave way for saved time and improved AR performance with automation. Read on:

1. Study and review your business model: Accounts Receivable is a life blood for every business. However the steps in each AR process vary, so does the revenue model, timeline, and even problems that are encountered along the line. The best thing any business can do to kick-start its AR automation is to review their current Receivable models.

Track all the steps from the moment of purchase to the final delivery of the order. Notice the payment methods, timelines and other inherent billing issues to discover new opportunities that can minimize the friction and smoothen the billing and payment process. This step sheds light on key issues in the process and helps you lay a strong foundation to build a customized AR process.

2. Design standard AR workflows: Now that you have reviewed your AR process and got deeply acquainted with the process start with defining and design business workflows. Analyze you current operations by reviewing the internal and external touchpoints in the current AP workflow.  Look out for personnel involved, systems needed, and departments that play a role and the timelines of each process. This will help you understand the bottlenecks which can be simple avoided for better and faster by designing simple and seamless workflows that suit your AR operations.

3. Eliminate friction & simplify workflows: Simplify your workflows by eliminating necessary steps in the AR process. For example, some of the key optimizations Back Office Accountantshas performed for one of our clients include:

  1. Employing an e-invoicing system for seamless delivery of invoice information and payments links directly in e-mails (without triggering spam).
  2. Reducing the payment friction for faster payments from the clients.
  3. Leverage different types of payment methods with early bird discounts.
  4. Set standard credit management and collection policies and procedures.
  5. Enabling an effective aging process by identifying, organizing and ranking outstanding payments for effective follow-up and collection.

4. Integrate and automate: Getting done all the foundation work gives you all the necessary optimizations that are needed for building a seamless AR.  Get the right tools on board to automate the manual tasks and processes to increase the efficiency. Today’s AR automation software can help you build a centralized platform with customized functions and reporting capabilities that simplifies communication and secure access to the required information – everything can be performed with simple dashboards that simplifies AR management.

Though we have simplified the processing 4 steps in this blog, Accounts Receivable automation is an extensive process especially when it is to be customized to meet specific cash flow goals of the business. Not only the business must be equipped with adequate resources, it must leverage the right AR professional experiences in designing and executing AR automation perfectly. If you are an enterprise with limited resources then it is important to seek consultation from remote accounting firms specializing in Accounts Receivable Services.

Back Office Accountants Best Remote Accounting Firm for Accounts Receivable Services:

As one of the leading remote accounting firms in the business, Back Office Accountants has been providing Accounts Receivable Services for years now. Leveraging our expertise in Accounts Receivable we can design and build a streamlined process from the ground up. Leveraging our advanced stack of automation tools, we then execute it to perfection to save your time while helping you reach your cash flow goals.

If you are an enterprise that is looking to leverage automated accounts receivable but are short of sufficient resources or expertise you can consider to outsource accounts receivable services to Back Office Accountants for improved cash flow, accounting efficiency & productivity. You can find more information about our accounts receivable services here: