Table of Contents
- What are automated collections?
- How do you automate a payment collection?
- What is an automated collection system?
- How can an automated collection system help finance teams?
- How your business can get started with an automated collection system
Key Takeaways
- Automated collections streamline the AR department by digitizing processes, reducing manual tasks, and enhancing efficiency.
- B2B payment software automates key AR functions like scheduled, autopay, and recurring payments, accelerating revenue collection.
- Automating debt collection reduces costs and boosts efficiency through tools like automated reminders, payment plans, and predictive analytics.
- Automated Collection Systems (ACS) improve invoice generation, payment processing, reminders, and collection management while offering valuable analytics.
- ACS benefits include reduced manual work, increased efficiency, improved cash flow, enhanced customer experience, and real-time visibility.
In today's fast-paced business landscape, accounts receivable management can quickly become a bottleneck if reliant on manual processes. That's where an automated collection system transforms how finance teams handle everything from invoicing to payment reconciliation. By shifting to a fully digitized process, businesses can create a smoother experience for the company and its customers. Additionally, automatic bill pay ensures that payments are made seamlessly without constant oversight.
Ready to take your collections process to the next level? Dive deeper into how automation can revolutionize your AR department by streamlining workflows, boosting efficiency, and reducing delays. Keep reading to discover how automated collection systems can help your business thrive.
What Are Automated Collections?
Automated collections automate a finance organization’s AR department’s processes so team members don’t focus time and attention on monotonous tasks. This allows the organization to move from paper-heavy processes to a fully digitized cash cycle. Automated collections also ensure that invoices and revenue are sent on autopilot.
Automated collections help finance teams integrate every aspect of their AR department with the company’s trusted ERP system, eliminating the need for a paper-based department.
How Do You Automate a Payment Collection?
Automated collections are deployed through B2B payments software and are used to take the burden of hand-operated tasks off of finance teams. By leveraging SaaS, automated collections move most AR functions from manual to digital, making payment collections more efficient. Here’s how an automated collection system software helps when it comes to streamlining AR departments:
- Scheduled payments. Automated collection systems let customers schedule payments in advance, helping finance teams predict cash flow.
- Autopay. Customers can pay using tokenization, which speeds up payments and reduces DSO periods for AR departments.
- Recurring payments. Automated collection systems allow recurring payments for regular purchases, facilitating timely revenue collection and accelerating time to cash.
How Do You Automate Debt Collection?
Automating debt collection can help streamline the process while reducing costs and improving efficiency. Follow these steps to automate debt collection:
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Implement debt collection software: Invest in specialized software that tracks accounts, sends reminders, and processes payments.
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Set up automated reminders: Schedule reminders and notifications to be sent to debtors regularly. These reminders can include personalized messages and payment options.
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Offer online payment options: Integrate online payment gateways with your debt collection software, allowing debtors to make payments conveniently and securely.
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Use predictive analytics: These help assess debtors' likelihood of repayment, guide collection strategies, and help focus resources on accounts with higher chances of recovery.
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Automate payment plans: Set up automated payment plans that allow debtors to make regular, manageable payments over a specified period.
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Offer self-service options: Provide debtors with a portal to access account information, view statements, and make payments.
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Monitor and adjust strategies: Continuously monitor the effectiveness of your automated debt collection strategies and make necessary adjustments based on results.
What is an Automated Collection System?
An Automated collection system (ACS) streamlines and enhances the process of collecting payments, receivables, and other financial obligations. These systems leverage automation and digital tools to facilitate efficient and secure transactions between businesses and customers. Automated collection systems’ key components include:
- Invoice generation: ACS systems digitize invoicing, allowing businesses to customize and send invoices electronically.
- Payment processing: ACS platforms provide various payment options, such as online portals, credit card processing, and direct debit. Customers can pay through their preferred channels.
- Reminders and notifications: ACS systems send automated reminders and notifications to customers when payments are due or overdue.
- Collection management: ACS tools provide features such as dunning letters, escalation processes, and personalized collection strategies to manage outstanding receivables effectively.
- Reporting and analytics: ACS systems generate comprehensive reports and analytics that provide insights into payment patterns, customer behaviors, and collection performance.
Automated Collection Systems Benefits
- Reduced manual work: By automating repetitive tasks, ACS systems significantly reduce the manual effort required in traditional collection processes, freeing up staff for more strategic initiatives.
- Increased efficiency: ACS streamlines the collection process, enabling businesses to process more invoices and payments quickly.
- Improved cash flow: Automated collection systems expedite the payment process, leading to faster cash flow and improved working capital management.
- Enhanced customer experience: ACS offers customers a convenient and secure payment experience, fostering positive relationships and increasing customer satisfaction.
- Real-time visibility: ACS provides real-time visibility into invoice collection status, allowing businesses to track progress and take proactive measures if necessary.
How Can an Automated Collection System Help Finance Teams?
Even though digital payments are growing in popularity, today, 40% of all B2B payments are still made via paper check. Automated collection systems remove the need for check payments, so your finance team will never have to open an envelope and match payments to invoices again.
Automated reconciliation in collection systems enables instant payment application to invoices without manual intervention, enhancing the reconciliation process.
Automated collection systems also enable managing receivables remotely from anywhere in the world. By eliminating the need for paper-based processes, automated collections optimize business continuity in the following ways:
- Funds-on-file tokenization speeds up customer payment authorization.
- Virtual terminals tied to automated collections software can help your accounting team enter customer payment information on their behalf, making it easier than ever to set up recurring payments
- A centralized location for all of your receivables makes it much simpler to manage the entire payment process from a single place
Automated collections also offer the following benefits:
- Flexible invoicing
- Reduced payment friction
- Improved AR efficiency
- Customizable collections plans
- Instant payment verification
- One-click payment options
- Reduced fraud and chargebacks
How Your Business Can Get Started With an Automated Collection System
Paystand offers automated collections for your AR team, speeding up your time-to-cash and reducing DSO by as much as 60%. We also help companies save up to 50% on the cost of receivables, allowing them to offer zero-fee payment options to their customers and flat-rate payment plans that reduce costs and increase margins.
Our automated collections and receivables can effortlessly integrate with every major ERP system, which means your payment information can be found in the same place as your other crucial business data, such as your CRM and supply chain information. We also make it possible to send invoices with embedded payment links, auto-reconcile transactions directly into your record system, and use smart data to attach key invoice information to every payment.
Download our free eBook, The Ultimate Guide to Late Payments, to learn more about how Paystand can help you overcome the challenges of late payments and improve your cash flow.