Automating accounts receivable: Take the work out of getting paid
Accelerate your business's collections with an automated accounting system.
As a business owner, one of your primary goals is to make your company profitable, and that starts with getting paid by customers.
Doug Sleeter, founder of The Sleeter Group, helps small businesses and accountants identify tools that work best to generate higher profits. "Being short on cash is one thing," he says. "Automating your accounts receivable process to get cash that's owed to you is another."
Here's what to consider when selecting automated accounts receivable software.
Look for electronic invoicing
Whether you're considering accounting software that includes solutions to manage payments from clients, or specific accounts receivable software, look for an offering that features electronic invoicing.
Electronic invoicing can reduce the potential back and forth with a client. When a payment is due, the software automatically sends your client an invoice. When it is overdue, the client gets an overdue notice. The software tracks and manages your accounts receivables as well, giving you the option to set up recurring invoices for your clients.
"With this software, I know when you're going to pay me," Sleeter says.
Know what the monthly subscription and fees cover
Most accounts receivable solutions are available on a monthly subscription basis, with the option to pay an additional fee for add-ons like project management tools, data entry, and tracking. Before choosing a solution, understand what's part of your software package and what's considered an add-on. If you already have an accounting software, ensure the add-ons will automatically integrate with it — and with any other software programs you use.
Pick a system that gives your customers different ways to pay
You can encourage timely payments by offering more than one payment option. Standard payment options like check and credit card payments are available with most software. You may also consider a solution that allows solutions like PayPal or Visa Checkout for customers to pay using their existing accounts.
Select tools that enable cash monitoring
Beyond electronic invoicing and invoice management, choose an automated accounts receivable software that enables cash monitoring of such elements as expenses and payments. That way, you can view how much money you have on hand, what bills you owe, and how much money is owed to you.
"I wouldn't run my business without a cash monitoring option," Sleeter says. "I can see my cash position and my cash forecasting."
Take advantage of free trials
Sleeter suggests taking advantage of any free trials to become familiar with various software offerings and their features before settling on one.
Prioritize features based on the individual needs of your business. "None of them do everything," Sleeter says. "Think through your business processes that need a solution."