As finance professionals, you know that accurate financial forecasting is crucial for the success of any business. However, forecasting can be challenging, and even the slightest mistake can have significant consequences. This is why it’s vital to leverage every tool available to enhance the accuracy of financial forecasts. One such tool businesses are increasingly adopting is accounts receivable automation.
Accounts receivable automation uses technology to automate invoice creation, payment reminders, and collections – to name a few. By automating these processes, businesses can optimise their accounts receivable function, minimise errors, and boost the precision of their financial forecasts.
The benefits of AR automation for financial and budget forecasting
More accurate invoice creation
One of the key benefits of accounts receivable automation is the improvement of invoice accuracy. Automated systems can extract data from different sources, such as sales orders and purchase orders, generating invoices quickly and precisely. Eliminating manual data entry decreases the likelihood of errors, such as incorrect billing amounts or inaccurate customer details, which can result in disputes and delayed payments. Accurate invoices lead to accurate revenue projections and more precise financial forecasts.
Improved cash flow management
Accounts receivable automation can also assist in better cash flow management. Automated accounts receivable software can issue payment reminders and follow-ups to customers, decreasing the time it takes to receive payments. With an automated communication workflow, businesses can accurately anticipate their cash flow, a critical component of financial forecasting. A more predictable cash flow budget helps businesses make better decisions regarding investments, expenses, and other financial matters.
Reduced Bad Debt
Accounts receivable automation can also reduce bad debt, which is the debt that is unlikely to be paid. Automated systems can flag customers with a history of late payments or non-payment using business credit score data. Integrating credit monitoring with AR automation can help your business take appropriate action to recover the debt or limit their exposure to such customers. Businesses can strengthen their financial position by minimising bad debt and making more accurate forecasts.
Improve your financial forecasts with AR automation
In conclusion, accounts receivable automation is a crucial tool for enhancing the accuracy of financial forecasts. Businesses can minimise errors, optimise their cash flow management, and reduce bad debt by automating invoice creation, payment reminders, and collections.
As a finance professional, it’s your responsibility to ensure that your business leverage every available tool to generate the most precise financial forecasts possible.Learn more about accounts receivable automation and how it works for your unique business needs Speak with one of our AR experts today to learn about options for your business.