- \n
- Efficient accounts receivable management helps maintain a stable cash flow, as errors or delays in collecting dues can put a company’s financial health at risk.<\/li>\n\n\n\n
- Implementing automation for accounts receivable offers significant benefits by streamlining tasks like invoicing, payment tracking, and reporting, thereby enhancing operational efficiency and financial control.<\/li>\n\n\n\n
- You can leverage various software (like Synder, Sage Intacct, Zoho Books, QuickBooks, Xero, and more) to automate these tasks effectively.<\/li>\n<\/ul>\n\n\n\n
\n\n\n\n<\/p>\n\n\n\n
Contents:<\/b><\/h2><\/p>\n
1. A look at accounts receivable<\/a><\/p>\n
2. Automated accounts receivable: what it is and why you might need it to up your game<\/a><\/p>\n
- \n
- What does AR management take?<\/a><\/li>\n
- What part of accounts receivable can you automate?<\/a><\/li>\n<\/ul>\n
3. Accounts receivable automation software you might want to consider<\/a><\/p>\n
- \n
- #1 – Synder<\/a><\/li>\n
- #2 – Sage Intacct<\/a><\/li>\n
- #3 – Zoho Books<\/a><\/li>\n
- #4 – QuickBooks<\/a><\/li>\n
- #5 – Xero<\/a><\/li>\n<\/ul>\n
4. How does AR work \u2013 an example of Synder<\/a><\/p>\n
- \n
- Creating and sending invoices<\/a><\/li>\n
- Payment collection: Applying payments to invoices<\/a><\/li>\n
- Sending payment reminders<\/a><\/li>\n
- Beyond automating AR: What else can Synder do?<\/a><\/li>\n<\/ul>\n
5. The future of accounts receivable automation<\/a><\/p>\n
6. Final words on AR automation<\/a><\/p>\n\n\n\n
<\/p>\n\n\n\n
A look at accounts receivable<\/strong><\/span><\/h2>\n\n\n\n
Accounts receivable (AR) are money customers owe a company for things they bought on credit. These play a significant role in keeping a company’s <\/em>cash flow<\/em><\/a> stable. <\/em><\/p>\n\n\n\n
In simple terms, AR promises future cash – they’re a kind of IOUs waiting to be paid. A business must handle these IOUs well, ensuring they turn into actual cash on time.<\/p>\n\n\n\n
As you can see, managing AR is all about finding the right balance. <\/p>\n\n\n\n
On the one hand, giving customers credit can boost sales. But on the other hand, the company needs to collect that cash to keep things running smoothly. So, handling AR to preserve the balance between the two helps a company manage its short-term money needs and keep its finances healthy.<\/p>\n\n\n\n
Maintaining this balance might include setting clear credit terms to specify how much credit is extended and when payments are expected. Keeping an eye on customers’ ability to pay is very important to avoid potential problems. Sending out invoices promptly and following up on overdue payments also help keep accounts receivable in check. There are more, and we’ll tackle some further.<\/p>\n\n\n\n
<\/p>\n\n\n
\n![\"AR](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/accounts-receivable-cycle-1024x576.png\")
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How does the accounting cycle work?<\/p>\n\n\n\n
- \n
- The accounts receivable cycle begins when a company sells goods or services and issues an invoice detailing what to pay for and when it’s due.\u00a0<\/li>\n\n\n\n
- The customer receives the invoice, and as time passes, the company monitors the accounts receivable aging, ensuring not to miss the due date. If you don’t get payment by the due date, you can send a payment reminder to the customer. When payment is received, it’s applied to the corresponding invoice in the company’s records, thus closing it.\u00a0<\/li>\n\n\n\n
- Next, you reconcile with bank statements and generate reports to analyze collection performance and outstanding balances.<\/li>\n<\/ul>\n\n\n\n
This way, a company can avoid the risks of late payments or customers who can’t pay and is more likely to have a steady cash flow, run smoothly, and stay successful in the long run.
Read more on accounts receivable:<\/em><\/strong>
<\/strong>
<\/strong>What Is Accounts Receivable: Understanding Your AR Accounts<\/em><\/a><\/p>\n\n\n\nAutomated accounts receivable<\/strong>: what it is and why you might need it to up your game<\/strong><\/span><\/h2>\n\n\n\n
As mentioned, managing AR puts a lot on your plate. The good news is that today technology can help you take a substantial portion out of it.<\/p>\n\n\n\n
What does <\/strong>AR<\/strong> <\/strong>management<\/strong> take?<\/strong><\/span><\/h3>\n\n\n\n
But let\u2019s take a moment to break down the major components of managing accounts receivable.<\/p>\n\n\n\n
<\/p>\n\n\n
\n![\"Ar](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/ar-management-components-1024x576.png\")
<\/figure><\/div>\n\n\n<\/p>\n\n\n\n
Credit policies and terms<\/strong><\/h4>\n\n\n\n
Establishing clear credit policies and terms, including credit limits and late payment interest rates, enables effective risk management. It helps in the future assessment of customer creditworthiness, sets repayment expectations, and ensures consistency in decision-making. Customer-wise, it outlines clear conditions for getting products or services on credit, the scope and term of repayments, reducing the likelihood of disputes or misunderstandings.<\/p>\n\n\n\n
Customer creditworthiness assessment<\/strong><\/h4>\n\n\n\n
Assessing customers’ creditworthiness might involve looking at how reliably they’ve paid in the past, their credit score, and how financially stable they are. This helps lower the chances of them not paying on time or not paying at all. Understanding these factors allows the company to make better decisions about who to extend credit to, ensuring smoother transactions and reducing the risk of financial losses due to late or missed payments.<\/p>\n\n\n\n
Invoicing and billing<\/strong><\/h4>\n\n\n\n
Timely and accurate invoicing is critical for effective management of accounts receivable. It\u2019s essential to send out invoices quickly after delivering goods or services. They should list the delivered items or services, their corresponding costs, the payment due date, and other important payment terms. This way, the company ensures customers understand what they need to pay for and by when. It can speed up the payment process and reduce the risk of payment delays.<\/p>\n\n\n\n
Collections process<\/strong><\/h4>\n\n\n\n
A solid collection process ensures that customers pay their invoices on time. This process involves a few key steps. The company might send reminders for overdue payments to prompt customers to pay. If reminders don’t work, they might follow up by phone and discuss payment arrangements. Sometimes, they might even negotiate with customers a plan for paying off what they owe in smaller chunks. All this allows you to get the owed money this or that way and keep your cash flow healthy.<\/p>\n\n\n\n
Cash application<\/strong><\/h4>\n\n\n\n
Matching customer payments with the corresponding invoices allows you to keep things in order with accounts receivable. This way, you have proper AR reconciliation, which means all the owed money is accounted for correctly. So, when a customer pays, you need to update the records to show which invoices have been paid and how much. You also have financial reports accurately reflecting this money, which is essential for understanding your financial position.<\/p>\n\n\n\n
Dispute resolution<\/strong><\/h4>\n\n\n\n
Dealing with any problems or disagreements customers might have about invoices quickly is a part of managing accounts receivable. By sorting out these issues fast, the company shows that it cares about its customers and their concerns. Plus, it helps keep the payment process moving smoothly, and this is positive for everyone involved.<\/p>\n\n\n\n
Reporting and analysis<\/strong><\/h4>\n\n\n\n
You might want to carefully monitor accounts receivable, checking things like aging reports. They show how long invoices have been outstanding and days sales outstanding (DSO), which measures how quickly customers pay their bills. Another wise approach is having and controlling your bad debt reserves set aside for payments that might not get collected. This monitoring, reporting, and analysis help you understand how well you manage your AR and pinpoint areas where things could be done better.<\/p>\n\n\n\n
As you can see, there\u2019s a lot to do.<\/p>\n\n\n\n
What part of<\/strong> accounts receivable<\/strong> can you automate?<\/strong><\/span><\/h3>\n\n\n\n
Accounts receivable automation involves the integration of technology and software solutions to automate various tasks associated with managing outstanding dues from customers. These tasks encompass the entire AR lifecycle, including generating invoices, sending reminders, tracking payments, and generating reports. <\/p>\n\n\n\n
Automation can put on autopilot many of what you used to do manually. But that\u2019s not only about saving time. There\u2019s more value in enabling businesses to significantly enhance their operational efficiency and achieve better financial control.
Now, let\u2019s look at what automation can handle for you in a bit more detail.<\/p>\n\n\n\n<\/p>\n\n\n
\n![\"AR](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/parts-of-ar-you-can-automate.png\")
<\/figure><\/div>\n\n\n<\/p>\n\n\n\n
1. Invoicing <\/strong>automation<\/strong><\/h4>\n\n\n\n
Invoicing automation is probably the most significant aspect of automating accounts receivable (AR) processes, impacting the creation, sending, and processing of invoices using digital technologies. Digital invoicing replaces traditional paper-based invoicing with electronic methods. <\/p>\n\n\n\n
Technically, digital invoicing involves using software or online platforms to generate invoices. These invoices can be customized to include company branding and specific details about the products or services provided, prices, and payment terms. Once created, they can be sent directly to the customer’s email or accessible through an online portal. Customers can then review the invoice, make payments electronically, and, if needed, even set up automated recurring payments. Sometimes, automated invoicing includes applying payments to the corresponded invoices<\/a>, facilitating the process for you even more.<\/p>\n\n\n\n
What are the benefits of digital invoicing? Here\u2019s your answer:<\/p>\n\n\n\n
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- The biggest value of digital invoicing lies in its efficiency, accuracy, and convenience<\/strong>. Invoicing automation saves businesses time and resources that would otherwise be spent on manual tasks such as printing, mailing, and processing paper invoices. This improves operational efficiency and reduces the risk of errors or delays associated with manual data entry.<\/li>\n\n\n\n
- On top of that, automated invoicing speeds up payment processing<\/strong>, as customers can receive invoices instantly and make payments electronically (often via the payment link<\/a> included in the invoice).\u00a0<\/li>\n\n\n\n
- In addition to accelerating the cash flow for businesses, digital invoicing is environmentally friendly<\/strong>. It reduces paper usage and contributes to sustainability efforts.<\/li>\n<\/ul>\n\n\n\n
Read more about invoicing:<\/em><\/strong><\/p>\n\n\n\n
- \n
- Handling Invoice Management With Small Business Accounting Software<\/em><\/a><\/li>\n\n\n\n
- Invoicing Software for Small Business<\/em><\/a><\/li>\n<\/ul>\n\n\n\n
2. Automated payment reminders<\/strong><\/h4>\n\n\n\n
Payment reminders<\/a> help optimize the collections process and ensure customers pay on time. You can leverage technology to streamline this communication and reduce late payments by gently prompting customers with outstanding balances to settle their invoices promptly.<\/p>\n\n\n\n
Automating payment reminders involves using software to send notifications<\/a> to customers at predetermined intervals. You can personalize them with invoice details and relevant account information, which enhances the customer experience and conveys professionalism. Automation ensures consistency in sending reminders, regardless of staff availability. <\/p>\n\n\n\n
You can deliver these reminders through various channels, such as email, SMS, or automated voice calls, catering to customer preferences and increasing the chances of timely responses. Often, you can customize reminder schedules based on customer behavior, adjusting timing according to payment patterns.<\/p>\n\n\n\n
Automated payment reminders help businesses improve collections efficiency, strengthen cash flow, and enhance customer relationships.<\/p>\n\n\n\n
3. Automated<\/strong> data integration and reporting<\/strong><\/h4>\n\n\n\n
Data integration<\/a> and reporting are significant for accounts receivable automation, empowering businesses to efficiently manage financial processes and gain valuable insights into their receivables. <\/p>\n\n\n\n
Connecting financial data across diverse systems and generating comprehensive reports can enhance financial visibility, inform decision-making, and drive improved outcomes.<\/p>\n\n\n\n
Automated data integration involves synchronizing payment information with accounting software. It eliminates manual data entry and reduces errors. This integration provides accurate record-keeping, granting access to up-to-date financial data. It’s worth noting that many integration solutions allow for extracting payment and transaction data directly from various sources, minimizing the synchronization time and improving efficiency, allowing businesses to track key metrics such as receivables performance, payment trends, and aging analysis.<\/p>\n\n\n\n
These are key components of AR automation, integrating which into your business strategy empowers businesses to streamline their receivables processes, enhance customer interactions, and gain valuable insights for informed financial decision-making.<\/p>\n\n\n\n
Accounts receivable automation software you might want to consider<\/strong><\/span><\/h2>\n\n\n\n
Now, let’s look at the tools to help you automate your AR. It’s absolutely worth mentioning that there are many available. However, we’ll look more at accounting software that comprises AR automation functionality alongside other accounting features.<\/p>\n\n\n\n
#1 – Synder<\/strong><\/span><\/h3>\n\n\n\n
<\/p>\n\n\n
\n![\"Synder](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/synder-software-logo.png\")
<\/figure><\/div>\n\n\n<\/p>\n\n\n\n
Synder<\/a> is an accounting automation software designed to streamline financial processes for online businesses. <\/p>\n\n\n\n
It offers integration with 30+ systems, including ecommerce, payment, and accounting platforms, automated bank feeds, expense categorization, and reconciliation, helping maintain accurate financial records efficiently.<\/p>\n\n\n\n
With Synder, users can create and sync invoices with accounting, automatically close them upon payment, accurately categorize payments (including processing fees and taxes), and reconcile them with bank transactions. Also, you can set up overdue payment reminders and automated email notifications to customers (together with other custom workflows) using the Smart Rules<\/a> functionality.<\/p>\n\n\n\n
Altogether, it helps businesses have a clear and up-to-date view of their accounts receivable, allowing them to track and manage cash flow effectively.<\/p>\n\n\n\n
Get hands-on experience of using Synder during <\/em>a 15-day free trial <\/em><\/a>and <\/em>book a seat at our Weekly Public Demo<\/em><\/a> for a guided tour by our support team.<\/em><\/p>\n\n\n\n
#2 – Sage Intacct<\/strong><\/span><\/h3>\n\n\n\n
<\/p>\n\n\n
\n![\"Sage](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/logo-sage-intacct-1024x325.png\")
<\/figure><\/div>\n\n\n<\/p>\n\n\n\n
Sage<\/a> provides comprehensive accounting solutions for businesses of all sizes. With Sage Intacct, users can manage various financial tasks, including accounts receivable.<\/p>\n\n\n\n
Sage Intacct offers features such as creating and sending invoices, tracking payments, and automating reminders for overdue invoices. Additionally, Sage Intacct provides robust reporting and analytics capabilities, allowing businesses to monitor AR performance and identify areas for improvement. Sage Intacct’s AR management tools help streamline invoicing processes, track payments accurately, and ensure timely collections, ultimately improving cash flow management and financial visibility.<\/p>\n\n\n\n
#3 – Zoho Books<\/strong><\/span><\/h3>\n\n\n\n
<\/p>\n\n\n
\n![\"Zoho](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/logo-zoho-1.png\")
<\/figure><\/div>\n\n\n<\/p>\n\n\n\n
Zoho Books is a cloud-based accounting software offering a range of features for businesses, including accounts receivable (AR) management.<\/p>\n\n\n\n
With Zoho Books, users can create professional invoices, track payments, and send automated reminders for overdue invoices. Zoho Books integrates with various payment gateways, making it easy for customers to pay invoices online and facilitating faster payment processing. <\/p>\n\n\n\n
Besides, it provides customizable invoice templates and reporting tools to help businesses analyze AR performance and make informed decisions. Zoho Books also offers automated reminders for overdue invoices, reducing the risk of late payments. The software tracks payments in real time, providing businesses with accurate information on their AR status.<\/p>\n\n\n\n
#4 – QuickBooks<\/strong><\/span><\/h3>\n\n\n\n
<\/p>\n\n\n
\n![\"QuickBooks](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/qb-logo.png\")
<\/figure><\/div>\n\n\n<\/p>\n\n\n\n
QuickBooks<\/a> is a widely used accounting software with robust accounts receivable (AR) management features. You can create customized invoices, track payments, and set up automated reminders for overdue invoices.<\/p>\n\n\n\n
QuickBooks integrates with various third-party apps, allowing businesses to streamline invoicing processes and improve efficiency. Additionally, QuickBooks offers reporting tools to help businesses analyze AR performance and identify trends. With QuickBooks, businesses can efficiently manage AR processes, track payments accurately, and improve cash flow management.<\/p>\n\n\n\n
Read more about how <\/em>Accounts Receivable in QuickBooks<\/em><\/a>.<\/em><\/p>\n\n\n\n
#5 – Xero<\/strong><\/span><\/h3>\n\n\n\n
<\/p>\n\n\n
- Invoicing Software for Small Business<\/em><\/a><\/li>\n<\/ul>\n\n\n\n
- On top of that, automated invoicing speeds up payment processing<\/strong>, as customers can receive invoices instantly and make payments electronically (often via the payment link<\/a> included in the invoice).\u00a0<\/li>\n\n\n\n
- The biggest value of digital invoicing lies in its efficiency, accuracy, and convenience<\/strong>. Invoicing automation saves businesses time and resources that would otherwise be spent on manual tasks such as printing, mailing, and processing paper invoices. This improves operational efficiency and reduces the risk of errors or delays associated with manual data entry.<\/li>\n\n\n\n
- Payment collection: Applying payments to invoices<\/a><\/li>\n
- #2 – Sage Intacct<\/a><\/li>\n
- What part of accounts receivable can you automate?<\/a><\/li>\n<\/ul>\n
- What does AR management take?<\/a><\/li>\n
![\"Xero](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/logo-xero-1024x1024.png\"){kind=logo}
<\/figure><\/div>\n\n\n![\"AR](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/ar-automation-create-an-invoice-1024x362.png\")
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<\/figure><\/div>\n\n\n![\"AR](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/ar-automation-recurring-invoices-setup-1024x221.png\")
<\/figure><\/div>\n\n\n![\"AR](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/ar-automation-invoice-email-example.png\")
<\/figure><\/div>\n\n\n![\"AR](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/ar-automation-invoice-checkout-page.png\")
<\/figure><\/div>\n\n\n![\"AR](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2024\/04\/ar-automation-closing-paid-invoices-automatically.png\")
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