Busting the myths: 3 misconceptions that could stop you taking advantage of AR automation in 2024
Don’t let doomsayers deter your organisation from deriving the very real benefits that automating the revenue collection and management process can generate.
Are you aware of the well-warranted hype about accounts receivable automation but remain reluctant to introduce it into your enterprise? You and thousands of other decision-makers around the country.
More than a quarter of businesses have no plans to adopt accounts receivable automation software any time soon, according to latest BlackLine research.
Almost a third continue to use manual reports and spreadsheets and 70 per cent disseminate invoices to customers via email.
Over 40 per cent rely on ad hoc collection methods when accounts come overdue, including the labour-intensive practice of having AR employees contact delinquent debtors directly, and 35 per cent perform only rudimentary data analysis using legacy accounting software.
Unpacking the AR automation advantage
That’s despite the growing body of evidence that AR automation can streamline operations, reduce costs and boost cash flow significantly.
Implemented smartly, automation technology can reduce manual processing by 85 per cent, reduce day sales outstanding by between five and 10 days, and slash aged debt by over 30 per cent, on average.
Moreover, businesses that adopt automation enjoy an extraordinary additional benefit – unprecedented, up-to-the minute visibility into the payment patterns and behaviours of each and every customer on their books.
Being in possession of these insights enables them to optimise their credit policies and terms to minimise the risk posed by bad debts.
Addressing the inertia
So, in the face of these obvious advantages, why have Australian businesses been so reluctant, to date, to proceed with automation?
False assumptions are the short answer. Here are three of the most common ones that continue to hold businesses like yours back.
Our ERP payment processing solution is as good as it gets
The ERP is the backbone of the finance department, in every enterprise of sufficient size to warrant one. Historically, the payment processing capabilities within these solutions have served businesses well enough, but is that good enough?
In today’s times, the answer is no – at least not if your organisation puts a value on scalability and sustainability.
To achieve both, without growing your headcount, you need to harness the power of automation technology to supercharge efficiency and productivity across the revenue management lifecycle.
Our people don’t want it and won’t use it
Change isn’t always easy, particularly for employees who are set in their ways and feel relaxed and comfortable when they’re doing things just as they’ve always been done.
Concern that their AR teams will resist the introduction of transformative technology and become stressed and destabilised if it’s implemented has held many leaders back from proceeding with automation initiatives.
Very often, however, their fears are unwarranted. BlackLine research shows that while 18 per cent of organisations are strongly resistant to change and prefer manual processes, 43 per cent are open to discussion.
Demonstrate the benefits – less repetitive, ‘grunt’ work, more time to focus on value added, strategic tasks and the improved morale that invariably ensues – and employees, more often than not, are happy to get on board.
Integration and implementation would be expensive and disruptive
Unfortunately, there’s no magic wand when it comes to transformation. Every initiative requires an investment in time and resources, and few are completed without a single blip.
But persisting with outdated processes and practices is not without its costs either. Almost a third of AR departments acknowledge that they spend too much time reworking errors and prioritising tasks, while 24 per cent say lack of visibility makes managing AR challenging, according to BlackLine research.
It’s therefore little surprise to learn that the percentage of overdue accounts sits at between five and 10 per cent, for more than a third of businesses.
When AR processes are automated, those inefficiencies can be eliminated. Automated collections processes take the hard work and hassle out of chasing debts and AR are notified digitally when invoices require their attention.
Yes, there will inevitably be a few teething troubles, a learning curve and a need for comprehensive team training if you decide to make the switch.
But work with a best of breed technology vendor and a well credentialled implementation partner and they’ll support you through the process as promptly and painlessly as possible.
Towards a stronger future
In today’s times, boosting efficiency, cutting costs and optimising cash flow are pressing imperatives for organisations of all stripes. Harnessing the power of AR automation can help your business achieve those ends.
If misconceptions about what that transformation process might entail have made you reluctant to act, it’s past time to start reaping the returns.
Rosie Cairnes, regional vice president, BlackLine.
