All businesses want to increase their cash flow rate, but sometimes cash flow delays come from within the company itself. Time-consuming manual processes and an Accounts Receivables (AR) staff that may be in the dark for some critical information can all be connected to a slow AR process.
Common Challenges with Accounts Receivables
Billing Errors. No customer likes being overcharged and no company likes to undercharge. Billing errors lead to customers withholding payments and reaching out to customer support teams to rectify the issue. Not only does it delay the flow of cash, but it adds an additional burden on another department within the company. Occasional mistakes are one thing, but a company experiencing frequent billing errors indicates real problems.
Invoicing Delays. Invoice times vary for different types of businesses. For example, a software as a service (SaaS) provider would bill on regularly scheduled intervals, where a wholesaler might invoice customers when goods are shipped out. Although these invoicing timeframes differ, the billing process still revolves around certain dates within the fulfillment process. The longer it takes for an invoice to be sent out after these dates, the longer it will take for a company to be paid.
Inconsistent Collections. In a perfect world, customers would immediately pay their invoices due. Sometimes it requires a reminder, but in the worst-case, it has to be escalated to a collections agency. This presents an obvious issue for a company's cash flow and creates extra work when constant follow-up is required. Not only does this slow down cash flow, but a company's days sales outstanding metrics are also affected by this as well.
Struggling with some areas of AR is not uncommon for many companies. Before a problem can be fixed, one has to understand the cause. If a company's accounts receivables are faltering, manual processes and disconnected systems are likely culprits. To effectively and efficiently do their job, AR staff need information from other departments, which often requires working with multiple systems or spreadsheets. The net effect of having to search around for this data, go from department to department or system to system, is a poor cash flow for a business.
NetSuite and Accounts Receivables
Implementing software like NetSuite to assist with the receivables of a business helps improve overall cash flow by eliminating the time-consuming manual processes and giving AR staff the access they need to critical information across the company. Accurate and timely invoicing would be a direct result of this that could get rid of the guesswork when it comes to improving cash flow.
From billing customers to managing payments, NetSuite automates the entire AR process. Intelligent workflows identify completed orders and automatically convert them into invoices to reduce any possible chance for delay within the company. NetSuite can also handle automated credit card billing, upon authorization, to remove almost all manual processes within an AR department. With the ability to integrate AR with the NetSuite general ledger (GL), journal entries are automatically created with all AR events and posted to the GL.
Combining shared data and automated workflows saves time, minimizes errors, and increases the overall efficiency of accounts receivables. The overall result is fewer billing issues, increased collections, and improved cash flow. Click below to learn more about how NetSuite automation can further assist companies.