Effective accounts receivable (AR) managers understand that fostering strong relationships with customers
is an essential tool in getting paid. Those strong relationships require a personal touch.
So, when some think about automating their processes, they have concerns about how platforms and tools designed to create greater AR efficiency may feel impersonal and undermine those relationships.
However, the reality is that automating AR systems can be an important tool in building stronger ties with your customers and creating a new level of communication and convenience that improves their experience. As more customers demand improved service, automated AR is crucial to meeting the needs of busy customers and winning their trust.
In the B2B sector, just 33% of businesses offer their customers the ability to pay online.
Automated AR allows you to streamline and accelerate your processes, from invoicing to dealing with customer questions and concerns, to getting paid. By automating routine tasks such as sending reminder email messages, you’ve not only given customers the convenience they demand, you’ve also freed up employee time that can be better spent on more valuable tasks, like fostering those all-important relationships and resolving the payment issues that do need a human touch.
Building Relationships Through Automation
When you dive into the specifics of how AR automation can better your business, the benefits quickly become clear.
Adopting an automation platform can save time and money while delivering the experience that
customers truly want.
Consider this Harvard Business Review article outlining 30 things customers really value. Author Eric Almquist, a partner with management consulting firm Bain & Company, points to his firm’s research findings that companies that offer these benefits tend to have greater customer loyalty than those that don’t. AR automation delivers on a number of fronts, including:
Organizing data & processes
Connecting with customers
Providing an online platform where customers can pay their bills electronically at any time expands your collections
process to a 24-hour operation, ensuring that customers can make payments at any time when it’s most convenient for them.
How does that help you? Let’s say you have a customer who is a small business owner working on her bookkeeping in the evening because she was too busy to get to it that day. You’ve just made her experience better by being there at her convenience. If you offer early payment discounts, an automated reminder might let her know that today is the last day to pay and take advantage of the discount. Instead of waiting until she’s back in the office the next day to write a check, she can pay her bill immediately online. You get your money faster, and you’ve made her feel great about saving her business some money. Or, you may have reminded her that she has a question about the last order that came from your company. She can log on to the dashboard and submit her question or comment at any time from virtually any device.
Choosing Your Automated Functions
Certainly, not all AR functions can or should be automated. The benefit of many platforms is
that you can choose the tasks to be handled through the platform and those that your team will manage personally.
The best AR solutions allow you to automate the functions you choose. Think about where human interaction matters — and where it doesn’t. Some areas that are often effectively automated include:
CUSTOMIZED INVOICE DELIVERY. Your customers may be getting paper invoices, PDFs via email, or requests for online payment through supplier portals, p-cards, or business commerce networks. So many varied formats may slow down their processes. Let your customers choose the invoice method that works for them — without any effort on your part. They can simply log on and choose from various options to make invoicing more convenient for them.
PAYMENT REMINDERS. Whether it’s a reminder about an overdue payment or a prompt to help customers remember to take advantage of early payment discounts, an automated AR solution can deliver the appropriate email message with no involvement from your staff. Best of all, you help customers stay on top of their payments to avoid penalties and manage their expenses to avoid unexpected variances.
ONLINE ACCOUNT ACCESS. With a robust online portal that allows customers to log in to their accounts at any time and from any location, your business delivers an added measure of convenience. Online account access gives them the ability to take control of their profile data and access account information, whether they need to check on upcoming invoices or round up a year’s worth of invoicing information at tax time.
CUSTOMER SUPPORT. Sometimes, customers hold off on paying a bill because they have a question or problem and never get around to reaching out to your company. They may not have the necessary information handy to answer questions when your AR manager calls to follow up on the overdue invoice. An automated platform allows customers to send questions and concerns directly to your company, where they can be routed to the appropriate person at any time. Issues are resolved sooner, clearing the way for payment.
72% of people prefer an online self-service option over phone and email support.
Benefits for Your Customers — and Your Business
By allowing your customers to choose the invoice formats that work best for them, reminding them of important payment milestones, and delivering anytime, anywhere account access, you help them run their businesses more effectively. That is essential for strengthening relationships and is mutually beneficial. Automation delivers a host of additional benefits as well, including:
IMPROVED COST SAVINGS. According to 2014 research from The Accounts Receivable Network, every dollar you track down costs between 4 and 25 cents in collection activities. The more automation you have implemented, the lower your cost. Automated systems also save customers money by reminding them to take advantage of discounts, automatically apply credits and avoid late charges and interest by making timely payments.
REINFORCED BRANDING. Automated AR platforms allow you to customize interfaces with your branding, share key messaging with your customers, and even create and distribute special offers. All of this reinforces your brand promise and communication with your customers, strengthening relationships.
STREAMLINED COMMUNICATIONS. With automated systems, it’s easy for customers to communicate with you conveniently at any time, ensuring that their questions or disputes are routed to the person who can most effectively address them. When they need information, they simply log on to their account and get it.
BETTER REPORTING AND ANALYTICS. Automated platforms harness information you need to run your business better, too. AR representatives can confidently engage with long-term customers with the most up-to-date information, while your team can quickly identify dispute causes and spot patterns or issues that are repeatedly delaying payment and need to be corrected. If a customer has an issue, you can identify and address it before it jeopardizes your relationship. In addition, you have easy access to the data you need to track receivables data, measure response time, set new goals and improve overall customer satisfaction.
STAFF OPTIMIZATION. Because your AR team members are freed from so many tasks, they are available to devote their time to the activities that offer better return on the investment.
Every $1.00 you track down costs between 4 and 25 cents in collection activities.