7 Reasons Not to Fear Accounts Receivable Automation

Oct 8th 2015
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While businesses and accountants alike see the need for and benefits of accounts receivable automation, they still have reservations about making the switch from the manual processes they've always known to an automated solution.

Accounts receivable automation is not new, yet it has become increasingly popular in recent years as more businesses and accounting firms realize the value of an optimized A/R management process.

We've talked with hundreds of accounting professionals, credit managers, controllers, collectors, and IT managers about their hesitation to automate, and we've found they all typically share the same fears. Interestingly enough, we've also found that after doing a little research, businesses realize that their fears were primarily based on misconceptions, not facts.

As such, we've put together a list of seven common fears about A/R automation and why it's really not that scary after all.

1. Fear of Change

Making the move from manual processes to automated ones is indeed going to change the way you manage invoices; but not completely. The actual processes being worked through are going to remain the same, the only difference is that the software will be doing the work for you. While it's chugging away at your most time-consuming and tedious tasks, you can handle those that require a more personal touch.

2. Loss of Control

Many businesses and advisors fear that by putting automated workflow engine behind the A/R process, they'll be giving up control of how the process is handled. But that is simply not the case. The software is designed to leave room for both automation and human interaction, giving you complete control over what the system does and when it does it. In fact, many people find that they have more control with automation than without it.

3. Complex Implementation and Use

An automation system sounds complicated, but implementation is painless when you consider the time and effort it takes to implement other business systems, such as ERP. Further, it requires minimal involvement from your IT department. Using the system, while it will take some getting used to and end-user training, is easy. Especially when you compare it to the long and arduous manual processes you're likely using today that require you to jump in and out of various programs, spreadsheets, screens, and reports.

4. Fear of the Cloud

The fact is, many of today's A/R automation tools do run in the cloud, and while more businesses and firms are embracing cloud software, others are still wary to make the switch. That fear may have been well-justified when cloud computing first came onto the business software scene, but there really is no reason to fear it today. The thing is, there are just as many examples of cloud security breaches as there are for premise-based business systems being compromised. The trick is finding a partner that cares as much about your data security and control as you do. If you're still not ready, there are systems out there that can be run in the cloud or on-premise, so don't let your apprehension about the cloud keep you from the benefits of A/R automation.

5. Software Expense

We're not here to tell you that implementing the system will be free or cheap, but you'll be shocked at how affordable it can be. The key is finding a vendor that offers different versions of their software at different price points so you have options based on your needs and your budget. You must also consider the many ways the software will help you save money. For example, reducing late invoices and bad debt write-offs; no longer needing to hire an additional employee to keep up with overwhelming manual processes; and savings on small items that add up over time, such as the cost of manual printing and mailing invoices or notices.

6. The Fallout

While users may be wary of the automation at first, they come around when they realize that the point of automation is not to replace human involvement, but to enhance it and allow them to work better, faster, and smarter. Just be sure they know why the change is happening, how it impacts their daily activities, the problems it will solve, and how it will benefit them as individuals.

When it comes to your customer's reaction to automation, you'd be surprised at how making the change can actually improve customer satisfaction and make a company easier to work with. For example, with automated emails, the lines of communication are more open, giving your customer a fast and easy way to ask questions or bring up concerns about an invoice.

7. Fear of Failure

“What if I go through all of this and it doesn't help me reach my goals?” I'm sure the thought has crossed your mind, and while it may be a valid question, there are many studies out there to help you quell your worries.

For example, industry analysts Paystream Advisors found that companies that utilize A/R management software recognize such benefits as:

  • 20 percent reduction in Days Sales Outstanding
  • 25 percent reduction in past-due receivables
  • 15 to 25 percent reduction in bad-debt reserves.
  • ROI in as little as two months

Conclusion

In the end, the need for automation is evidence that a business has grown to the point that they need a better way to manage all of their invoices. This is good news and hopefully you see now that it's really not as scary as you once thought.

There is a lot more to talk about when it comes to myths and misconceptions about automation, but what do you think? Do you still have reservations about automating A/R functions? The above is only an excerpt from a larger guide on the topic that can be accessed here.

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