Reducing Costs And Improving Efficiency In The Accounts Receivable Department

By Author: Donald Nason
Total Articles: 48
Comment this article

The accounts receivable (AR) department is a crucial part of any business and the majority of the time they face similar problems as the accounts payable (AP) department, such as high costs in processing documents and delayed payments.
Introducing an automated solution can be used in AR to streamline payment processing; as the solution provides instant access to all documents, including: sales invoices, customer orders, credits, statements, POD documents, picking lists etc.
The solution will significantly shorten the average debtor day and minimise the number of credit notes that need to be sent.
So how does an automated solution such as this work? The solution will be able to capture and archive all AR related documents, and creates a central repository from which all documents can be retrieved. The solution will capture documents in all different formats: paper, fax, email, PDF, word, excel and computer generated documents. This will make the whole process a lot more efficient and reduce the amount of time and cost it takes to process a document.
In a recent survey by Esker, called How to Achieve ...
... 100% Electronic AR Invoicing, they found that the elimination of manual processes can cut operating costs by up to 80%. According to Esker, for those AR departments that don’t have an automated solution it takes four minutes to handle a document, two days for transit time and costs $5 to send an invoice; all this adds up to a lot time and money.
Investing in an automated solution will reduce these amounts significantly as well as achieving the following benefits:
• Improved cash flow
• Improved control of key business process
• Reduced average debtor days – faster customer payments
• Enhanced customer relationships
• Reduced operational costs, i.e. time spent searching for invoices and other documents
• Reduced telephone costs – info available instantly meaning there is no need to call back customers
• Minimised customer queries – self service customer portal
Benefits such as these will not only help to improve the efficiency of the AR department, but it will also help to improve customer relationships. With all the details instantly to hand, the finance team can respond to queries immediately without having to locate documents and call them back. Any document stored can be faxed or emailed to the customer, removing the reason to duplicate an invoice and ensuring you are paid on time.
When investing in an automated solution for your AR department you can expect to reduce document handling time by up to 96% according to Esker, this means your AR team will have a lot more time to spend on more strategic tasks. Esker also believes that businesses can see between 40 – 80% reduction cost in sending billing documents and as much as 90% reduction in billing errors and returns. Overall the AR department will become more efficient and the business as a whole will save a lot of money which can be used in other areas of the business.
Businesses that invest in an automated accounts receivable solution, along with a supplier invoice processing solution can gain the benefits of a fully automated P2P system. To find out more about Documation’s AR solution or our supplier Invoice Management Solution please visit our website www.documation.co.uk or email info@documation.co.uk.