Accounts Receivable is abbreviated as AR and it can be described as the due amount that customers will pay to the company for the services they have used or goods they have purchased. If you fail to maintain the accounts receivable (AR) then it will help in the growth of the business. Failing to collect the accounts receivable at the right time will act as a hinder to the success of the company. All business owners should consider the hiring of experienced accounting staff and installing AR management software.
Here, in this blog post, we are going to discuss various benefits of improving AR management:
1. Improve Cash Position of Your Company
All companies who extend credit to the customers should collect the due amount before the due date. If you fail to collect the due amount from your customers then your company will run into dry spells. The dry spell is a situation in which you owe more than what you are really taking in. By following appropriate techniques for AR collection, sending reminders to the customers, quickly sending e-invoices, and utilizing the best techniques will encourage your customers to pay quickly. By implementing the advanced AR management techniques, you can easily improve the AR collection process. Ultimately, it leads to a good cash position for the company. You should consider accounts receivable software integration with the backend system of your company to improve AR management.
2. Good Control Over Working Capital
Working capital indicates the progress of the company. So it becomes important to ensure that the working capital of the company keeps growing. By improving the accounts receivable management process, you can see the direct impact on the working capital. Then the working capital of your company will also start improving. In simple terms, the improved AR system will help in significantly the working capital of your company. Also, it helps in making wise strategic investment decisions.
3. Save Your Precious Time
Without proper AR collection techniques, most customers do not make payments at the right time. The business owners have to send reminder emails after the due date, contact the customers on phone calls and sometimes they have to take help of collection agencies. Advanced AR management techniques not just save precious time, but also help in reducing disputes with customers. For instance, AR integration for QuickBooks can help in speeding up the AR collection process and save your precious time.
4. Effective Customer Communication
All business owners should look out for different ways for improving the AR management process. They should consider the installation of the latest technology account receivable management software. The software helps in improving the communication link with your customers. You can review the account information, send and receive invoices, create mail merge docs, create emails, and log phone calls on just one screen. One of the best things is that this information will be stored in the database for future reference. By installing the latest accounts receivable technologies such as AR management software, you can serve your customers in a better way.
5. Better Customer Service
Mostly, customers want to make payment before the deadline, and often delay payments are not their fault. Sometimes, delays in sending invoices lead to a delayed collection of payment. In some cases, the wrong invoice leads to the delayed payment. Delay in sending invoices or sending wring invoices leave a bad impact on customers. Your customers will be frustrated and agitated after receiving the wrong invoice. All these issues can be prevented by implementing an effective AR management system.
6. Reduce Cost Of Administration
This is the digital era and sending invoices through post or fax is outdated. You should send the e-invoices to your customers through email. The automatic accounting software can automatically send the e-invoices to your customers immediately after rendering services or offering products to your customers. Automated AR software like Troveworks Quickbooks integration app help in generating and sending invoices automatically to customers. If it is possible to send e-invoices automatically then why should you pay for printing invoices, packing, and posting them? In addition to this, you can also save paper and go green.
7. Reduce Sale To Payment Cycle
If a manufacturer makes a sale, then they incur the cost of labor and inventory for the fulfillment of any order. If any company in the service sector gets approval for any new project, then they spend money on expensive resources to offer their services. The main objective of a successful business is to get paid quickly so that they can pay to the vendors, suppliers, employees, etc. By improving the AR management system and installing accounts receivable technologies, it is possible to reduce the Sale to Payment cycle. Ultimately, the business starts growing.