Accounts receivables are vital to ensuring cash flow and profitability while allowing you to manage all aspects of your operations better.
If you feel overwhelmed with managing accounts receivables (AR) for your business, you’re not alone. Every day, countless CFOs and accounts receivable managers like yourself face the problem of efficiently managing their AR balances, reconciling discrepancies, and collecting overdue payments on time.
The challenge is figuring out which process or system will help them manage their accounts receivable ledger in the most effective way possible. In this blog post, we’ll compare two popular options – Excel-based accounts receivable tracking spreadsheet vs automated Accounts Receivable (AR) systems and see how they stack up against your business needs.
How to track accounts receivable with an accounts receivables template
An accounts receivable collection template can help you track accounts receivables (AR or A/R). They provide an overview of your customers’ outstanding invoices. This information can help you assess your business’scashflow health and determine which customers may need additional attention in terms of payment collections.
Generally, an accounts receivable sheet will include columns for the customer’s name, the amount owed, and the due date for payment. Other columns might include notes about any particular conditions related to the invoice or payment, such as discounts offered or the next course of action.
Regular audits on account balances can help ensure accuracy in reporting on current assets – particularly if older entries have been removed from the original document but remain unpaid.
Accounts Receivable spreadheet template in Excel and Google Sheets free download
To help you get started with using spreadsheets in managing your accounts receivables, you can download our sample accounts receivable Excel template and Google Sheets templates for free.
The challenge of using spreadsheets in accounts receivables
While accounts receivable sheets can help manage your accounts receivables, they must be manually updated and reviewed regularly to ensure entries are accurate. Manual entries also make accounts receivable spreadsheets prone to errors and duplication.
You can solve these challenges in maintaining and using accounts receivable spreadsheets by adopting automation in your accounts receivable process.
Benefits of managing your accounts receivable with AR automation platform
Accounts Receivable automation is the process of automating the accounts receivable function of a business, which typically includes tasks such as invoicing, collections, and payments.
AR software can automate these processes by extracting data from purchase orders, invoices, and other documents; identifying customer information; and matching payments to invoices. AR automation helps businesses improve efficiency and better manage cash flow.
Let’s take a deep dive into the benefits of managing accounts receivable with AR automation:
1. Streamline accounts receivable workflows
More than record-keeping, an accounts receivable automation software helps the overall efficiency of your collections process. For example, aside from tracking your outstanding invoices, AR software can automatically send payment reminders to customers before and when invoices become overdue. Comprehensive AR automation platforms also integrate a payment portal that your customers can easily access from their invoices reminders to further improve your speed of collections.
Automation software also deals with dynamic data, updated in real-time that provide faster and more comprehensive insights into a customer’s credit score. With credit and payment behaviour data, you can decide on the best course of action in dealing with overdue invoices.
2. Reduce inaccuracies
Automating data entries eliminates manual errors and allows for a more accurate accounts receivable ledger. Accounts receivable software is designed to handle large amounts of data and automatically calculate balances and totals, reducing the risk of errors.
An accounts receivable software helps you store all customer data in one place, reducing the risk of duplication. It also enables you to get the payment as quickly as possible by minimising disputes caused by errors.
3. Syncs with your accounting software for auto-reconciliation
Accounts receivable software can be integrated with other systems, such as accounting software, to provide a more comprehensive view of the business. Syncing your AR software with your accounting software not only ensures one source of truth for your accounts receivable data, but also allows you to automate the reconciliation process. Automatic payment write backs to your accounting system saves your business time, allowing you to focus on key activities that can grow the business.
4. Data security
Accounts receivable software is designed to protect sensitive financial data and is typically more secure than a spreadsheet. You can even set different levels of access with your team to ensure safety and accountability. AR automation platforms are also regularly updated to guarantee that you stay compliant with regulatory changes.
5. Improve the customer experience
Accounts receivable automation can be invaluable in helping companies provide exceptional customer service.
AR automation platform can help accurately invoice customers promptly and reduce the prevalence of mistakes due to human error. This efficiency translates into a better customer experience. The accessibility of invoice data through online payment platforms also improves the customer payment experience by providing transparent data and making it easier for customers to make payments.
Enhanced speed and accuracy also increases overall satisfaction as customers will no longer have to worry about dealing with inaccurate billing information or tedious disputes for overcharges.
Manage your accounts receivables better with AR Automation
Efficiently managing your accounts receivable is crucial to improve your business cashflow and to reduce late payments. Overall, an AR automation software is a more efficient, accurate, and secure way to manage your accounts receivables than using spreadsheets alone. It’s a win-win solution that gets you paid on time and improves your customer’s experience.
AR automation software can help you manage your cashflow, so you can focus on what you do best – growing your business. Speak with one of our AR experts today to learn about options for your business.