Best practices for automating accounts receivable.

Automating accounts receivable (AR) can significantly enhance your company’s cash flow and operational efficiency. To maximize these benefits, consider the following best practices:

Utilize software that automates over 95% of cash application transactions. This approach streamlines the AR process and reduces Days Sales Outstanding (DSO). Automated systems match remittances against open invoices and bank statements, ensuring faster and more accurate processing.

Adopt sophisticated automation tools to enhance collections efficiency. These systems help prioritize and streamline daily activities, allowing your team to focus on high-priority tasks. Features like intelligent payment forecasting and automated dunning letters can further improve collection efforts.

Automate over 85% of your deductions to recover significant revenue often lost in manual processes. An efficient deductions management system can adapt to various bank files or remittance formats and route deductions for prompt review and approval.

Ensure your AR automation tools integrate smoothly with your existing Enterprise Resource Planning (ERP) system. This integration facilitates automatic updates to the accounts payable subledger and general ledger postings, maintaining data consistency across platforms.

Automate up to 95% of bank reconciliation data using sophisticated matching rules. This practice reduces manual workload and increases accuracy in financial records. Automated bank reconciliation ensures that discrepancies are identified and addressed promptly.

Regularly track KPIs such as DSO, collection effectiveness index, and dispute resolution time. Monitoring these metrics provides insights into the efficiency of your AR processes and highlights areas needing improvement.

Invest in ongoing training programs to keep your team updated on the latest AR automation tools and best practices. A well-trained staff can effectively manage automated systems and respond adeptly to exceptions or issues that may arise.

By implementing these best practices, your organization can achieve a more efficient and effective process, automating accounts receivable and leading to improved cash flow and overall financial health.

Speak with Cashbook to find out how we can help you – Book a Demo or Contact Us for more information.

The Cashbook software is an excellent enhancement to the LX package. The product is very nice and easy to use with actions being very similar across the whole of the product. Global payments is especially smart with bank reconciliations and statement uploads being a useful timesaving tool. The reports provide all the necessary data you would need in a very clean format.

Julie Barker
Finance Manager, Camloc