The corporate finance back office is the backbone of any business, and yet, it’s been slow to adapt to changing technology and innovation. The back offices are made up of numerous departments, each of which handles vastly different tasks daily.
It’s been a challenge to apply new technology to these departments. That’s a part of the reason for the relative sluggishness of digital transformation in accounting and finance. Fortunately, the tide is turning. More and more teams are looking to implement new finance automation and accounting automation technology to streamline and support these teams’ tasks.Take the AR department—accounts receivable automation means everyday tasks that took up most of a collector’s day can be reduced to a few clicks of a button. With advances in artificial intelligence (AI) and automation, a new era has arrived to transform how teams handle collections.
Want to learn more about how AR automation can benefit your team? Let’s dive into the essentials of AI and automation in accounts receivable.
Traditional Collections: A Tedious Task
Accounts Receivable teams are responsible for handling many different vital business tasks, but manual, tedious tasks sometimes make up the bulk of their work. The results from our Automation in ERP and the Finance Back Office Survey showed that Accounts Receivable was one of the most manual back-office processes.
Record keeping can often translate to hours spent inputting data into systems and updating old records. It can get old pretty quickly. It also requires a keen eye to notice trends and discrepancies in the data collected.
Communication can also be a challenge—whether it’s sending a fifth follow-up to a client with an outstanding bill or creating and sending out receipts for paid transactions, the consistent back-and-forth that can eat up valuable time. Our survey shows that repetitive follow-ups and lack of responsiveness were some of the most tedious challenges faced by AR teams.
The Power of Automation in Accounts Receivable
The truth is that Accounts Receivable is overdue for an upgrade. It’s time for a more streamlined and efficient process to enable collectors to handle other high-value duties like maintaining the billing system, creating reports, and investigating any irregularities. There’s a lot to do, and Accounts Receivable teams must have the tools to do their jobs efficiently and maximize their time. That’s where automation comes in.
Automation, or in this case, “bots,” can simplify and streamline the collection process for Accounts Receivable teams. Utilizing innovative technology such as Natural Language Processing (NLP) and machine learning can create workflows that support efforts to maximize output.
Account Classification and Predictions
Account classification is crucial for prioritizing. Automated account classification means collection specialists can categorize their outreach based on intelligent insights from several payer types—fast payers, slow payers, at-risk accounts, strategic accounts, government agencies, and resellers—and ensure up-to-date information to make Collections workflows faster.
Your team will know who pays late or early, and everything in between. Automated accounts receivable software can also handle predictive remittance forecasting. Your team will automatically know which customers are likely to make late payments or no payments at all, so they’ll be better prepared to implement the right incentives and strategy.
Intelligent Communication
Sending and receiving correspondence is a fundamental feature of any collections process. It’s essential to get it right, but it’s also imperative to ensure that your team can do it efficiently.
By applying automation, all customers can receive targeted correspondence with the right tone and content to strengthen customer relationships and help your business collect payments on time. The bi-directional correspondence automation works in conjunction with the payer classification so that all payers receive the most relevant messages.
Automated Metrics
Understanding where a customer is in the payment process can enable an Accounts Receivable team to send out the right correspondence and prepare for payments as they arrive. Better yet, when payment tracking is automated, the team receives real-time updates without having to stay in constant communication with customers.
In addition to payment tracking, automated systems track collection metrics that a team can use to gain valuable insights and recognize trends, including Days Sales Outstanding (DSO).
How to Implement Accounts Receivable Automation
The future of finance and accounting lies in leveraging innovative technologies to support various tasks and duties. These technologies help reduce time spent on repetitive tasks and boost productivity, ultimately improving Days Sales Outstanding (DSO).
Your team won’t be burdened with the constant repetition of tasks that takes both time and significant effort to complete. Now, they don’t have to worry about how they’ll word their next letter to a late-paying client. These processes will be streamlined and handled without their input to focus on higher-level tasks that can move the needle for the business.
Automation is the future. Right now, it’s a matter of getting in early and reaping the benefits. Using new technologies might seem daunting, but the level of support they provide to the back office is unmatched.
Auditoria provides Accounts Receivables departments with real-time visibility to predictive remittance forecasting to understand the accounts likely to be late in making payments or potentially delinquent. Using powerful SmartFlow Skills, Auditoria can dynamically prioritize how work is completed, with two-way automated correspondence automation, automatic logging of correspondence touchpoints, and built-in tonality based on the client type. Automated Intelligent Analytics provides key collections metrics, including dynamic Days Sales Outstanding (DSO) calculations, risk indicators on accounts, and more.
See a demo today to learn how Auditoria's SmartCollections can transform your finance back office.