The current global environment has turned ordinary business on its head, forcing companies to come up with creative solutions to adapt to the rapidly evolving and uncertain economic climate. For those businesses that rely on a manual collections process, this puts a wrench in an already tedious and time-consuming undertaking.

With remote work expected to remain the new normal for the foreseeable future, it will be especially trying for these organizations to maintain business continuity within their current processes. Luckily, solutions like AR automation can help to eliminate the mundane tasks that tie up your finance team, enabling a more streamlined collections experience that ensures continuity for your business.

The Current State of Collections

Consider a day in the life of a Credit and Collections Manager today. They are required to check several accounting systems and their ERP for updates on customers’ standing. Credit managers will oftentimes need to manually input or manipulate this data into different reports for internal purposes, before cross-referencing it with their ERP and accounting systems, perform follow-ups with clients, all while tracking these interactions in a separate CRM tool.

Considering all of this effort, there are three main challenges that a manual collections process brings with it:

1. Manual Work
   Simply put, a manual collections process is far too labor intensive; there are too many systems involved, which ultimately means time that could have been put towards other value-added work is wasted managing those separate systems.
2. Out of Date Data
   Once your credit and collections team pulls data from your accounting systems, it immediately becomes out of date. Most standard accounting systems are not equipped to provide a live feed of data, so any payments made throughout the day will not be reflected until the next time that data is pulled.
3. No Prioritization
   Manual collections makes prioritizing collections efforts – beyond total amount owing or recency – near impossible. As a result, the team is unable to focus their time where it would make the biggest impact to the business.

How Automation Can Streamline Collections

There is a better approach to this process and it all begins with automation.

• Zero-Touch Collections
  Leveraging AR automation will enable your business to generate automated reminders for your customers that are based on your desired level of interaction with them. You will be able to easily target customers before they become overdue, and eliminate time spent chasing them down.
• Real-Time Communications and Dispute Management
  AR automation gives your customers an easy-to-use portal for communicating with your collections team, allowing them to better manage disputes or answer questions as they arise.
• Internal Follow-Up/Notifications
  With automation, your collections team will receive timely notifications and reminders that will empower your team to work smarter, not harder.
• Audit Trail
  Having a clean audit trail that lists all interactions with customers in a centralized view is key for finance teams. Automated collections delivers an up-to-date view of your interactions with your customers.
• Actionable Insights
  By leveraging automation, your finance team will gain clear insight into where to direct their immediate attention and intervention, while the software handles the rest.
• CRM for Accountants
  Automated collections tools give finance teams a CRM (Customer Relationship Management) platform for accounts receivable. All team members will have a universal method for tracking their interactions with customers and record notes for anything that may require attention.

Task-based vs. Exceptions-based Collections

An important benefit of automating collections is the ability to move from task-based collections to exceptions-based collections. Task-based collections management is the traditional collections approach in which credit and collections teams spend their days working through exhaustive ‘to-do’ lists, including: manually investigate historical data for debts and bills, send emails to customers when they are XX days past due, process payments and refunds, update account status records, resolve billing issues, and so on. With exceptions-based collections management, automation does the bulk of the work so that you and your team only need to step in when human interaction is absolutely required to get the job done.

If you’d like to learn more about how your business can streamline its collections with AR automation, please contact us directly and we’ll be happy to answer any questions you have.