Beginner’s Guide to Understand Accounts Receivable Software

Accounts Receivable (AR) software tracks all the money related to your business and makes your account management efficiency better. This includes cash flow and money owed to you for the service and products provided. This money is generally owed by your customers for purchases or products taken on credit which is paid after taking the benefits of the services provided. An accounts receivable software keeps data in a centralized location with up to date and accurate information to help manage client payments and interest rates.

Using the correct AR Software as per the business’s needs helps in improving DSO by maintaining a healthy cash flow. Sets timetable for beginning the collection activities, alerting for the late payment and solving disputes, etc.

Since it is an automated service that takes less time to collect, segment, and generates data, the invoice print task becomes more efficient, reaching out to the customers in lesser time with accurate information and hence making more cash available to the business by decreasing the average time customers take to pay.

Basic Features:

Accounts payable receivable software can be downloaded and installed on your system directly and provides various features that help in making your account management butter smooth.

Some key features include:

1. AR record creation to track customer payment data
2. Customer database management like name, contact details, payment options preferred, and local address
3. Aging reports showing outstanding payment days
4. Invoice creation which documents information like biller’s name, how much amount is due and by what date, service tax, payment options, and late payment charges
5. These accounts receivable collection tools provide a dynamic workflow where the attention is focused upon such clients who need more frequent calling or mailings with occasional involvement of senior employees
6. Early payment discounts improve customer satisfaction and bond with the company.

Advantages:

1. Improves Customer Credit Management

Although most companies don’t think it that way but choosing the right AR Software for your accounts receivable process automation will help in creating a record of all the payments received from the clients, making a data short-term extended credit by you. To explain it in more easy language, the factors bank considers before making a loan, the way they determine who is creditworthy and who isn’t.

They also help in calculating and assessing a set of processes involved in carrying out the credit issues to the customers, their application, and performing interest calculations when needed. Saving you a lot of time in examining the spreadsheet and figuring out the payments, their overdue dates, and charged interest.

2. Improves Financial Position

Cash management is the key to success in any kind of business and understanding the current and projected financial position of your organization not only helps in making more profit, and better financial investments but is also the base of further strategies and decisions to be taken out which is the smartest way of doing business.

This has been made easy and accurate by the type of Account Receivable (AR) software used by the organization. It is important to carry out questions like who are your clients? Who owe you money and what amount? What is your recovery system and interest rates and finally the biggest question, what is your expected cash flow?

3. Improves Cash Flow

Operating and managing cash flow needs extreme care to carry out successful operations. In an organization where you need to extend credit to creditworthy customers so that they can enjoy your services, having a reliable method is a necessity. Not only is this, keeping a tab on unpaid customer invoices equally important. Better cash flow ensures better financial positions and improvement in decision-making abilities for the organization. You must opt for efficient bookkeeping methods.

Accounts receivable automation softwareis mostly designed in such a way that ensures keeping the customer credit on a check and assured payments on a timely basis. Since it is about carrying out the financial decisions of your organization, it is important to invest the right amount of time and research in choosing the correct software based on the size scale of your business.

4. Improves Customer Relation

So far, we have talked about choosing the right software, their key features, how do they help in carrying out tasks efficiently and providing the best results, but what about the customer relation and satisfaction?

The Account Receivable (AR) Software use sorting and filtering capabilities that track the previous and current data behavior of your clients, their payment history, creditworthy customers based on good standing or with late payments of their bills. With such ease in functionality, the workflow becomes smooth and your client gets delivered with fast, accurate information and services making you stand out from your competitors in the market.