7 Automation Hacks Every AR & AP Managers Must Know


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As automation revolutionizes financial services, AR & AP Managers are embracing streamlined management of their financial processes, encompassing both Accounts Payable and Accounts Receivable. In this discourse, we unveil seven essential hacks to optimize these functions. From simplifying data entry to the complexities of invoice coding and vendor payments, automation presents a spectrum of opportunities for Accounts Payable. Similarly, automation accelerates invoice generation, facilitates payment reminders, enhances customer management, and streamlines payment reconciliation and verification for Accounts Receivable. Join us as we delve into the myriad benefits of automating payables and receivables.

Benefits of AP automation for AR & AP Managers:

Efficiency of the process

Since the accounts payable process is getting automated, the entire payment process becomes smooth and efficient leaving no room for error. The time-consuming and tedious job of checking and verifying the legitimacy of each invoice is taken care of by the automated processes, and thanks to automation, all your accountant is left with is to check the errors, if any, spotted by the system! There definitely arises a question of security with all these automated and intelligent solutions. The answer is no; the faster process does not trade off security and keeps the business going better than ever!

Increased productivity of the employees

The speed automated accounts payable brings into the business is incredible and reflects on the business’s workflow. What usually takes weeks for the finance team and account manager(AR managers or AP managers) to complete is accelerated by Automation, spending less time on the mundane job and focusing on meaningful planning, forecasting, and organizing budgets.

Organized Collaboration

With the help of the new age intelligent automation of accounts payable and account receivables, the manual coordination between AR & AP managers and the employees responsible for invoice verification across various platforms is converted into one single platform, ensuring transparent collaboration from one single dashboard, leading to fewer disputes and better working conditions.

Better accuracy and digitization

As AR & AP managers, keeping track of huge piles of transactions, financial information, and invoices is error-prone. The automation brings in accuracy as it rectifies all the errors that possibly can be made by manual procedures of invoice routing. As the traditional financial service system is moving from paperwork to electronic and digitization, it essentially reduces the risk of fraud and provides better navigation through different financial verticals.

Benefits of AR automation for business:

Saves your invaluable Time (Save Time or Save Money, it’s the same.)

The saying which goes by “Time is money” holds true, especially in business. An automated AR system reduces the time spent by the finance handlers (AR & AP managers) on mundane tasks, such as sending out recurring invoices manually. The time and collaborative effort of the AR & AP managers and the employees can be shifted to something productive and value-added.

Receive faster payments (The sooner, the better!)

Since invoice automation is faster, the business can receive money faster. The automated reminder significantly reduces the number of defaulters. Workflow management becomes much more efficient, and with an acknowledgment of healthy financial status, the business can proceed with other things such as buying more stocks, hiring employees, etc.

Decreasing the cost of processing payments(Business Payments, a lot quicker and simpler)

The satisfaction of receiving money far surpasses that of processing it. It takes a lot of time, including reviewing the amount, transferring the money into different accounts if needed, maintaining these records in the ledger, and much more. AR automation can significantly integrate all these time-consuming tasks, processing tasks within a few simple steps, saving processing costs, and making business payments quicker and simpler.

Reduce Errors (Help employees work better)

Preparing, processing, and reconciling the accounts receivable is a tedious task for any finance member, especially if there are heaps of invoices and payments to be dealt with. Whenever manual work is involved, the chances of error also increase. Humans might miss out or overlook an error due to work fatigue. Automation reduces the chance of errors, giving employees their focus, time, and energy to be utilized in rectifying errors if there are any, hence the non-value-adding attributes are not coming on the way of your business.

You might also be interested in: Account Payable Automation: All you need to know!

7 Automation hacks every AR & AP managers must know:

Automation is the key to streamlining accounts payable (AP) and accounts receivable (AR) processes, improving efficiency, reducing errors, and enhancing visibility into financial operations.

Here are seven actionable automation hacks for AR & AP managers to implement right away:

1. Automate Invoice Routing and Approval Workflows:

We all know that the manual invoice routing and approval processes are time-consuming for AR & AP managers and are prone to delays. Hence, what you can do would be to start off by Choosing an invoice automation software based on your business requirements. Next up would be to Configure approval workflows based on predefined rules, departments, or dollar thresholds. Lastly, ensure that you Integrate with your accounting system for seamless data exchange. This would eventually result in Accelerated approval cycles, reduced processing time, enhanced compliance, and improved audit trails.

2. Utilize Electronic Payments for Faster Settlements

Undoubtedly, manual check processing slows down payment cycles and increases costs for AR & AP managers. The solution for this would be to set up ACH or electronic funds transfer (EFT) payments through your bank or payment provider. With the increasing trend of digitization, it’s preferable to encourage vendors to provide electronic payment details. The electronic payment system will automate payment scheduling and set reminders. The above reengineering is going to accelerate payment processing, reduce transaction costs, strengthen vendor relationships, and, most importantly, improve cash flow management,

3. Leverage Data Analytics for Improved Cash Flow Forecasting

Inaccurate cash flow forecasts can lead to severe cash shortages or excess reserves. Hence utilizing accounting software with built-in cash flow forecasting tools or integrating with specialized forecasting solutions. It makes the job of AR & AP managers a lot more hassle-free by analyzing historical data and trends to predict future cash flows. It also automates the generation of cash flow reports and alerts for potential cash shortfalls or surpluses. Ultimately, it provides the business with better-informed financial decisions, optimized working capital management, and improved financial stability.

4. Implement Automated Reminders for Overdue Invoices

Tracking and following up on overdue invoices manually is time-consuming and leads to delayed payments. To tackle this, Businesses can use accounting software with built-in invoice tracking and reminder features. The steps for establishing automation include setting up automated email reminders for overdue invoices at predefined intervals, followed by customized reminder templates and escalation processes. The benefits reflected on the business are reduced Days Sales Outstanding (DSO), improved cash flow, strengthened customer relationships, and minimized late payment penalties.

5. Integrate Purchase Order (PO) Systems with Invoicing

Matching invoices with corresponding purchase orders and receipts manually is error-prone. Integrating your accounting system with your procurement or ERP system and Configuring automated matching rules based on Purchase Order numbers, quantities, and prices will make the invoice routing process more efficient. This also enables notifications for discrepancies or exceptions. However, this simple integration can streamline invoice reconciliation, reduce processing costs, improve accuracy, and enhance vendor satisfaction.

6. Automate Expense Report Processing

Manual entries and approval of expense reports are time-consuming and error-prone for AR & AP managers. The solution for this is to implement an expense management system based on your business requirements. This automation enables employees to submit expenses digitally via the web or mobile app. The automation can be followed up by configuring approval workflows based on company policies. It brings in faster reimbursement cycles, reduced administrative burden, improved compliance with expense policies, and enhanced visibility into travel and entertainment spending.

7. Utilize Robotic Process Automation (RPA) for Repetitive Tasks:

The repetitive manual tasks such as data entry and reconciliation consume valuable time, resources, and effort. The cure to this is to identify repetitive tasks suitable for automation, such as data entry from emails or invoices, going further the business needs to select an RPA tool and develop and deploy bots to automate tasks across AP/AR processes. The Business can realize increased productivity, reduced human error, scalability, and reallocation of staff to higher-value activities with proper automation of these processes.

Automation is a game-changer for AR & AP managers, enabling faster processing, improved accuracy, and better decision-making. Implementing these automation hacks can yield immediate benefits, but for even greater efficiency gains, consider exploring comprehensive automation solutions tailored to your organization’s specific needs.

Explore OPEN’s comprehensive automation solutions to unlock further efficiency gains and transform your AP/AR operations! Contact us today to schedule a demo and learn more about how our tailored automation solutions for accounts payable and accounts receivable can drive tangible results for your business.

Watch the latest CFO’s POV edition to learn more about automation from a CFO’s viewpoint –

Unlock the power of automation with OPEN and elevate your financial processes to new heights. Explore our automation resources for AR & AP managers below.

AP Automation: https://register.open.money/accounts-payable-automation/ 
AR Automation: https://register.open.money/accounts-receivables-automation/
AP Automation ebook: https://register.open.money/automate-accounts-payable-ebook

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