Automated Collections | B2B Finance Glossary

Aug 3, 2023 by Zazil Martinez

What are Automated Collections?

Automated collections are the process of automating a finance organization’s AR department so that team members don’t need to focus time and attention on monotonous tasks and so that the organization can move from paper-heavy processes to a fully digitized cash cycle. Automated collections also ensure that sending invoices and collecting revenue is put on autopilot.

Automated collections help finance teams integrate every aspect of their AR department with the company’s trusted ERP system by removing the need for a paper-based AR department.


How Do Automated Collections Work?

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 automated collections software specifically helps when it comes to streamlining AR departments:

  • Scheduled payments. Automated collections make it possible to allow your customers to schedule their payments to your business in advance. They can also help your customers set up weekly, monthly, or annual payments or even set up payments on a custom schedule. This helps finance teams better predict cash flow because they know when scheduled payments are coming in.
  • Autopay. Automated collections can allow customers to pay for goods and services using fund-on-file tokenization automatically. This functionality allows payments to come in much quicker, so AR departments are no longer subject to long DSO periods.
  • Recurring payments. Automated collections also enable recurring payments – the ability for customers to pay for goods and services they purchase regularly automatically. This helps greatly when it comes to collecting revenue in a timely manner and also speeding up time to cash.


How Can Automated Collections Help Finance Teams?

Even though digital payments are growing in popularity, today, 40% of all B2B payments are still made via paper check. Automated collections 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 – another function of automated collections – makes it possible for payments to be immediately applied against invoices without human intervention. Here’s how automated collections enhance the reconciliation process:

  1. Automated collections make it so you can apply for payments automatically to invoices with immediate reconciliation
  2. They allow your finance team to settle and record transactions directly within your ERP system
  3. Automated collections also help your team save valuable time so they can put their focus where it matters: on strategic projects
  4. Finally, automated collections can help you create email invoices that are embedded with “pay now” links so that your customers can quickly and easily make payments

Automated collections 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:

  • Fund-on-file tokenization allows your AR department to authorize customer payments quickly
  • 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 payments 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 Automated Collections Today

Paystand offers automated collections for your AR team and makes it possible to speed up your time-to-cash and reduce DSO by as much as 60%. We also help companies save up to 50% on the cost of receivables, provide them with the ability to offer zero-fee payment options to their customers, and offer 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.

If you’re ready to upgrade your finance organization and get started with automated collections, you can schedule a time to speak with one of our sales experts here.