As technology continues to evolve, a managed service provider (MSP) needs accounting automation to streamline a slow or disorganized accounts receivable (AR) process that wastes time and money and confuses customers.
Automation is an effective way for MSPs to simplify and improve accounts receivable while helping ensure customers pay on time, all the time, leading to increased revenue and reduced costs. It’s a platform MSPs are familiar with considering they often rely on Professional Services Automation (PSA) to help run their business.
AR automation is essential for B2B companies across an array of industries. But here are five ways it can be a boon for MSPs:
Keeping up with the tech industry is impossible if you don’t have the capital to purchase additional, modernized equipment or add knowledgeable employees to your team.
Through features such as AutoPay, and by accepting many methods of payment, AR automation makes it easier than ever for customers to pay their bills on time while reducing an MSP’s DSO (Days Sales Outstanding). DSO measures how long it takes a company to receive payments, and according to a study conducted by PYMNTS and American Express, a manual AR process can slow collection by as much as 67 percent.
The quicker an MSP gets paid, the quicker those funds are funneled back into the business. That way, MSPs can use these funds to upgrade their own technology and better serve their customers.
MSPs provide customers with more time to focus on their business by handling their complex IT infrastructure.
AR automation provides MSPs with a similar benefit by automatically preparing and sending customer invoices, processing payments, and sending out notifications and alerts. With time-consuming accounting tasks now executed automatically, employees can focus on more strategic work and worry less about stuffing envelopes or chasing down delinquent payments.
MSPs help customers by strengthening their cybersecurity. They understand how devastating a breach can be to a company’s bottom line and reputation.
Automating AR is a much safer way of collecting payments. It’s completely digital and eliminates the risk of check fraud. The Federal Reserve Bank of Boston found that approximately 680,000 banks issued reports of check fraud in 2022 and that check fraud is expected to hit $24 billion in losses in 2023.
Rather than relying on flimsy folders packed into bulky cabinets or multiple files spread across different servers or computers, AR automation saves a customer’s payment data in one secure tokenized platform that restricts visibility, ensuring only the right people have access
Leaning on manual labor to execute the AR process can result in errors, whether it’s a typo on an invoice or billing the wrong customer for the wrong good or service. These mistakes won’t just tack more time onto an MSP’s DSO, but they also create disputes with customers and do long-term damage to the brand’s reputation.
AR automation takes user error out of the equation by automatically performing tasks that are traditionally done by hand. This not only speeds up the process, but it lessens the chances of an MSP having to deal with corrections and phone calls from confused and unhappy customers. The software also comes equipped with collaboration tools that enhance communication to facilitate quick resolution of any billing issues or questions, enabling customers to make prompt payments.
And with real-time data such as payment tracking, MSPs are notified of delays from typically punctual customers, enabling them to reach out and show they care.
MSPs want to grow like any other business. However, expanding at an exponential rate can exhaust a company’s financial team, especially one that processes everything manually.
Using AR automation means payment histories, invoices, and receipts are all prepared and stored digitally, so there’s no need to add space or staff, even as your customer base continues to expand. The capacity is limitless. AR automation grows as an MSP grows and be scaled easily and at any time.
AR automation is a booming market, especially among B2B companies looking to improve cash flow. MSPs not using AR automation are sure to find themselves at a competitive disadvantage.
The first automated payment platform purpose-built for B2B companies like MSPs, Bill360 automates the complicated AR process and enables businesses to accelerate the transition from paper to auto-routed invoices and embedded payment acceptance in a single, secure software application. Bill360 syncs to your current accounting system in fewer than 30 minutes and even with training, you can be using it in under an hour.
Schedule a demo and discover how Bill360 can put your MSP on the fast track to growth.