In today's fast-paced B2B environment, companies wanting to streamline their accounts receivable (AR) process must embrace accounting automation to increase efficiency, improve cash flow, and scale effectively.
Change can be challenging. But a heavy reliance on a manual AR process compromises security, hampers productivity, and makes it difficult to keep up with rapid customer growth.
This blog explains why.
DSO (Days Sales Outstanding) is a metric measuring how long it takes you to get paid for a good or service. The higher the DSO, the longer you have to wait for the money you’ve already earned. That prevents you from modernizing and growing your company while making it difficult to forecast and manage cash flow.
Late-paying customers aren’t always the main cause of a high DSO. The problem could be a slow AR process – especially if everything, from sending out payment alerts to invoice reconciliation, is done by hand. That is why companies relying on a manual AR process have a DSO that’s 30% higher than those using medium or high levels of automation.
Manual accounting eats away at your time and is prone to errors that lead to billing discrepancies, damaging the buyer-seller relationship and jeopardizing customer retention. When multiple team members handle different tasks, it becomes difficult to centralize data, making it nearly impossible to forecast cash flow and make well-informed financial decisions. Paper invoices and receipts can easily get lost or discarded, exposing both your business and your customers to financial risk.
The more time your employees spend on these repetitive chores, the less they spend on strategic projects or tending to the needs of your customers. Manual processes are also impossible to scale unless you hire more staff, which you may not have enough time and money to do. Not doing so puts you at risk of overwhelming your team.
AR automation gets your company paid faster by seamlessly preparing, sending, and reconciling invoices as soon as a project is complete, reducing DSO and strengthening cash flow. It also sends out payment reminders and alerts tailored to meet the needs of each specific customer while simplifying the payment experience through features such as buyer-controlled digital wallets, Pay Now, and AutoPay. Balances are paid by simply clicking a button. By enabling payments digitally through ACH (Automated Clearing House) and with credit cards, AR automation greatly reduces or even eliminates check usage and acceptance, and with it, the risk of fraud.
Through real-time data such as DSO monitoring and AR aging, as well as a granular breakdown into your customers’ payment methods, AR automation enables you to better forecast cash flow, analyze your processes, and remedy pain points by presenting this information in a clean dashboard that’s simple to navigate.
Going digital also saves the money spent on paper invoices, receipts, envelopes, and stamps while ensuring invoices are reconciled correctly. AR automation is completely scalable and grows as your company does, shielding your team from burnout and saving you the time and money it costs to train and hire new staff.
More than 30% of small to medium-sized companies not using automation cited cost and perceived difficulty as a reason.
That’s why we created Bill360. Built specifically for SMB B2B companies, Bill360 requires less than an hour of training and syncs with existing accounting software QuickBooks and Xero in minutes. Why waste time learning how to use complicated software? With Bill360, you can begin streamlining your AR process immediately.
Bill360 offers features you won’t find anywhere else like real-time DSO monitoring, secure, buyer-managed payment wallets and real-time customer communication tools.
See how Bill360 addresses the pain points specific to your B2B by creating your custom demo video.