Consider creating a flowchart if you're looking for ways to improve your accounts receivable process. An accounts receivable flowchart visually represents the collection process, highlighting areas of inefficiency and opportunities for automation.
Accounts receivable flowcharts are excellent for helping accounts receivable departments to visualize their processes. They often help pinpoint which areas are ripe for automation or improvement.
Not only can they effectively keep your team on the same page and train new employees, but they can also help you see areas of inefficiency.
The larger the organization, the more complex the accounts receivable flowchart becomes. Each business unit has different processes. This makes accounts receivable management, invoice tracking, and payments more demanding.
The accounting and finance departments' main activities are similar, but their approach to collections differs. They use different systems (ERP and CRM) and have unique priorities and problems with customer relationships.
Besides, most AR departments find that flowcharts illustrate a non-linear process, adding complexity to its operation.
An accounts receivable flowchart documents and summarizes each step throughout the collection process. It clarifies to employees and managers what tasks are needed at each stage to ensure the company gets timely payments.
When you see an accounts receivable flowchart, it's clear that even a single invoice can follow a non-linear path and involve many people and organizations. The process grows in complexity as more suppliers are added to the process. Directions can be more easily sorted out and managed using this tool.
Technology's strength is automating repetitive, manual processes, which is abundant in AR departments. Many solutions automate collections but must be integrated to avoid data re-entry within larger systems.
Automation takes on repetitive tasks to computers, which are more efficient and less error-prone than humans. Besides, it lets your team focus on more challenging and meaningful work, improving morale and retention. This helps reduce operational costs, gain efficiency, scale to growth, improve cash flow, and reduce AR turnover days.
Some improvements found through many accounts receivable flowcharts include more efficient invoice payment methods. Consider the following areas:
The faster you collect customer payments, the shorter your DSO will be. This will improve your cash flow. One way to do this is by offering multiple payment options to ease payment submission.
Paystand lets you incorporate a "Pay Now" button into electronic invoices and payment reminder emails. When customers click, they're taken to a screen that lets them pay by credit card, electronic funds transfer, or ACH. This short process means customers can pay as soon as they see the invoice. There's no need to open an envelope, manually process the invoice, cut a paper check, and mail it, which takes time and labor.
Managing flexible and varied payment options is easy with AR automation software. Most organizations charge late fees for payments made outside 30 or 60 days, but you can also incentivize early payments. For example, you can discount current or future invoices for early payments.
Automation software provides a channel for your staff or AR outsourcing to communicate with customers with payment problems. Easy and transparent communications can ease a potentially tricky process if they need more time or have a dispute.
Keeping track of this can be challenging once invoices, disputes, or other roadblocks are processed. Reconciling payments as they come can be a heavily manual process. By automating it, reconciling can be immediate and real-time for better decision-making.
Having all the details for a potential audit can be nerve-racking for accounting professionals. The right solution can automatically generate an audit trail without painstaking customer notes. It can record all customer interactions, helping you resolve and document disputes. You'll also have an accurate record of credit terms, agreements, payment deadlines, or fee structures.
Paystand can automate your AR process, simplifying your flowchart and eliminating manual tasks. Free up hours for higher-level tasks, cut human errors, reduce late payments, and drop fees with Paystand's bank-to-bank network. It also accepts legacy payments such as ACH, credit/debit, wires, EFT transfers, virtual cards, and checks.
Here are some ways Paystand can streamline your accounts receivable process flowchart:
With an accounts receivable flowchart, you can visualize how your existing processes work. Now, finding ready-for-automation spots and process improvement becomes much easier with solutions like Paystand. Contact us today for more information on streamlining your accounts receivable process flowchart.