What is Automated Accounts Receivable/Payable?
December 27, 2021
December 27, 2021
Most business owners recognize the importance of receiving and sending payments on time for business operations. The slow and tedious processes of payments, customer invoicing and other transactions take time and effort away from a company’s cash flow.
Accounts payable and receivable automation solutions are useful tools that will facilitate and streamline these tasks as well as understand the financial health of your company.
What is Automated AR/AP and how Does it Work?
Accounts receivable and payable automation is the process of automating repetitive tasks such as capturing, validating, converting, and releasing data from your incoming or outgoing purchase orders into your accounting system.
With AR automation, documents can be issued in electronic or paper format, as you require,
A benefit of automating accounts receivable and payable is that any company can reduce overhead by saving time in the process of capturing, extracting, and converting data.
Automation eliminates manual data extraction and conversion as follows:
- The AR/PR vendor receives the paper and digital invoices.
- Invoices are scanned and converted using OCR technology.
- Invoices are validated and checked for errors.
- When the data is ready to use, it is delivered via EDI or a file upload.
When Should you use Automated AR/AP in Your Business?
Considering an AR/AP automation service for your business should not be an issue. If you want to optimize business operations with respect to financials, using an automation system is the best option.
With the advent of electronic invoicing requirements and the different requirements that each country has, the invoicing process quickly becomes complex.
In addition to improving and streamlining processes within the company, you can also increase the accuracy of invoices and this will generate great confidence to your customers and suppliers.
Why Would I Want to use Automated AR/AP in my Business
Automated AR/AP technology can be very helpful to your business. One of the main reasons why you should use it is to make processes much faster with fewer errors. Most importantly, it will give you and your team a mental break.
You will also have more accurate invoices, digital records, more efficient and happier employees, reduced costs, faster payments, time savings, better customer service, significant reduction of process errors.
What are the Benefits of Using an Automated System Like This for my Company?
In addition to streamlining your accounts payable and receivable processes, it will help you comply with local invoicing legislation and distribute all invoices to your customers electronically.
Optimize Workflow and Security
Reducing the time spent on repetitive tasks will make your workflow much more efficient. The team will be able to save time and focus on other activities such as tracking overdue payments and forecasting cash flow for business growth.
Meet Legal Requirements
The implementation of electronic invoicing in different parts of the world has become an indispensable requirement to comply with. An automated AR/AP system will allow you to send and receive digital invoices regardless of the technological skills of your customers and suppliers.
Increase Accuracy and Good Customer Service
The trust of your customers and suppliers is a fundamental aspect for the smooth running and growth of the company. The better your customer service is, the easier the flow of payments will be. That’s why reducing billing errors will make the process less tedious and build the trust of the people who play an important role in your business.
Which AR/AP system is the best?
There are various accounting solutions that help small businesses manage accounts receivable and payable. Depending on the type of industry, number of employees and other factors is the software you can choose. However, here are the best AR/ AP systems for your business.
- Bill.com: Users can capture invoices, approve payments and monitor all company transactions.
- Plooto: An online payment system that allows businesses and freelancers to streamline and automate the way they send and collect payments.
- FreshBooks Allows users to easily manage key processes, from converting receipts into expense files to tracking billable hours.