Do Gaps & Issues In AR Management Really Trouble You?

Consider the following scenarios:

1. YOUR AR TEAMS HAVE TO STRUGGLE THROUGH SEVERAL MANUAL PROCESSES, SUCH AS SENDING OUT REMINDERS AND DUNNING LETTERS BUILT ON EXCEL AND OUTLOOK.

In conventional AR Management Systems, sending out manual reminders to customers about overdue payments and sending out dunning letters are highly dependent on human intervention. The things that helps your AR Teams follow this process are Excel sheets, mails on Outlook, and calendars on your computer. Just imagine the impact if human error in this manual process misses out on either an important set of bills or reminders.

2. YOUR AR TEAMS ARE INCREASINGLY DEALING WITH INCOMING REQUESTS FOR STATEMENTS, INVOICES, AND DOCUMENTATION.

3. YOUR AR TEAMS ARE CHASING DOWN DATA TO GET AN ACCURATE AND 360O VIEW OF YOUR OPEN RECEIVABLES.

In managing the AR process, most AR Teams employ a highly disorganized set of systems, such as spreadsheets, reports and other software applications. This implies that communicating with customers becomes highly laborious as it involves using several channels, including phone, email and WhatsApp. Moreover, since the documentation pertaining to invoices is spread across siloed systems, it makes the required information hard to find. This makes the tracking of collections extremely challenging. And your AR Teams have to spend a lot of time collecting information, the time they could have utilized to provide customer service and other value-added tasks. This is one of the major reasons for communication failure and necessitates intervention by senior management to resolve issues.

4. YOUR AR TEAMS, BECAUSE OF LARGELY DEPENDING ON HIGHLY MANUAL WORK, DEAL WITH FREQUENT ERRORS IN INVOICE NUMBERS, INVOICE VALUE ETC.

Manual handling of invoices and documentation related to invoice generation increase the likelihood of errors, such as calculation mistakes, attaching documentation etc. This leads to payment discrepancies, customer confusion, time-consuming manual collections, and most importantly customer dissatisfaction. The risk of such human errors implies that the accuracy of financial records gets compromised and the compounding effect creates additional administrative burdens.

5. YOUR AR TEAMS KNOW AND REALIZE THAT THERE EXISTS A SERIOUS LACK OF COMMUNICATION ACROSS STAKEHOLDERS.

While handling open receivables, manual communication methods (phone calls, emails, WhatsApp messages) are frequently used, and this could result in delayed communication, forgotten follow-ups, and issues in monitoring client interactions. This makes maintenance of a continuous communication flow, answering customer enquiries, and sending out payment reminders a tedious task. Moreover, with all internal stakeholders working in siloes and in the absence of a single source of truth or platform, communication between internal stakeholders gets severely hampered.

6. YOU ARE NOT ABLE TO ACCEPT DIGITAL PAYMENTS SEAMLESSLY. p class="p-text9">Inability to accept safe method of electronic payment because of a lack of payment processing technology or because of restrictive cash application processes that compel your business to use cheques, is a major disservice to not only your customers, but also to your AR Team. This implies that your customers are unable to utilize the convenience of making digital payment options, and your AR Teams are forced to spend time on laborious manual cheque processing.

7. YOUR AR TEAMS AND YOUR SENIOR FINANCE PERSONNEL DO NOT HAVE COMPLETE VISIBILITY OF YOUR OPEN RECEIVABLES.

p class="p-text9">Without having complete visibility of your open receivables, your AR Teams are unable to keep track of each invoice’s status, spot past-due receivables, and also provide timely information when it comes to tracking AR KPIs. This results in ineffective & inefficient financial planning, cash flow forecasting, and most importantly strategic decision-making.

8. YOUR BUSINESS FACES INCONSISTENT COLLECTIONS.

Inconsistent collections because of existing gaps in the Working Capital Value Chain is a serious cause of concern. According to a study, businesses that priorities manual collection methods spend 30% more time to follow-up on past-due payments than those businesses that employ automated systems.
Conventional AR Management Systems make the collections operations highly reactive and are unscalable as your business grows as you need to largely depend on AR Teams to send out collection notices and/ or information. Moreover, in the absence of a centralized system to monitor customer payment, your AR Teams, not only have to inadvertently make more efforts and spend more time than required, but also face embarrassment that could lead to customer dissatisfaction when they fail to reconcile received payments against a set of invoices. Further, if you have more past-due payments than your AR Teams can reasonably handle, your AR Teams are forced to focus their outreach on critical invoices and this could result in loss of cash flow.

9. YOUR CUSTOMERS ARE HIGHLY DISSATISFIED. p class="p-text9">Customer dissatisfaction is, often, a direct consequence of using manual conventional AR Management Processes. It could also result from your communication, as your AR Teams send out generic emails because there is so much to do when it comes to collections.

10. MISAPPLICATION OF PAYMENTS IS A REGULAR CONCERN.

Received cash is considered as zero until your AR Teams formally record a received payment in the system. So it’s crucial that your AR Teams process incoming payments promptly and accurately.

Conventional or traditional cash application processes compel your business to hire many full-time accounting specialists to process received payments. They spend a lot of time focusing on received payments, which could have been utilized to identify and fix several underlying causes.

11. YOUR AR TEAMS HAVE TO DEAL WITH MANUAL RECONCILIATION OF FINANCIAL STATEMENTS.

Time constraints, repetitive manual tasks, and large data volumes only add to the woes of manual reconciliation. Moreover, this manual process is prone to errors – transposition errors, data-entry errors, and oversight of discrepancies.

12. YOUR FINANCE TEAM FACE A SEVERE SCALABILITY ISSUE OF THE AR MANAGEMENT PROCESS.

Your existing AR Management System isn’t scalable enough is not able to keep up with the increasing needs when your business grows. This limitation impedes overall business expansion and results in data management issues, inefficient & not-so-productive processes and increased error rate.

13. YOUR AR TEAMS HAVE TO DEAL WITH NON-INTUITIVE ERP USER INTERFACES. p class="p-text9">Your existing ERP System with intricate and confusing user interfaces can greatly impede the AR Management Process. This inefficiency, frequently, leads to longer employee training periods, highly ineffective operations, and greater risk of financial management errors. All this has a detrimental impact, not only on overall productivity, but also on business agility.

If the above scenarios seem familiar and they really trouble your AR Teams, you need AR Automation to transform your AR Management Process. You can connect with us to see how an AR Automation Software, such as Inebura can help transform your entire AR Process by making it more productive and efficient. You can visit our website www.inebura.com or write to sandeep@inebura.com to book a demo.

ABOUT INEBURA:

Inebura, a cutting-edge SaaS platform to manage your Accounts Receivables, helps you stay on top of your collections process, ensures consistent cash flow and lowers bad debts. It comes API ready, SFTP-ready and also comes preloaded with multiple customizable dashboards, innumerable functional modules, and customizable templatized AR inputs. Further, it also has an Email-integrated Dispute Tracker Module, Customized Screens for Customers, Pre-loaded Schedulers, WhatsApp & Email Templates, and One-click Bulk Reconciliation of Invoices. It can seamlessly integrate with your existing ERP and easily help you take complete control of your receivables, lower the cost of funds, ensure a healthy working capital situation and much more.

Inebura comes from the pioneers of B2B AR Management in India – TanServ Business Process Pvt. Ltd. – and is a result of their 12+ years of experience in managing AR for many Fortune 500 companies.

Author

Sudarshan Banerjee

Inebura , Head of Product

Sudarshan Banerjee is a Product, Process and Automation professional. His areas of interest include Sales Force Automation Tools, Sales Process Construction, Data Science, Data Analytics, Statutory Audit and Compliance, Project Management and Change Management.

He has over 19+ years of experience in Business Development, Sales, Process Planning, Business Strategy and Product Development spanning across various domains namely ITeS, FMCG,Financial Services, Travel& E-com.

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