Automation Potential in: Accounts Receivable
low Potential to Automate:
Issue Statements
Medium Potential to automate:
Manage customer collections, Escalating disputes
High potential to automate
Manage cash applications, Conduct aging and bad debt analysis, Create and manage reports
today's Challenges
Accounts Receivable is a great example of an area where on the surface the processes can appear simple, but are in fact more complex and time consuming than many would imagine. Most accounting departments rely on outdated, ad hoc processes to get their work done. They’re often understaffed and overworked and need to do a number of low-level manual tasks that lead to employee burnout and low morale.
Automation Impact Evaluation
Cash Application
Cash Application for example is simply applying incoming payments in invoices, but with the diverse range of formats in which payment may be taken and single invoices may contain multiple different orders can be quite time consuming and is therefore a great candidate for automation where the matching of data can be done almost instantly. RPA (Robotic Process Automation) can interact between email and an ERP or accounting software in order to automatically update due debts and payments made. Doing this in real time gives your business an accurate forecast and the technology can also create and manage reports allowing your team to react quickly to customers who are late on payment.
Issue Statements
99% of existing accounting systems will have this feature inbuilt and so although this could be automated, there is a very low chance of getting a return on investment from doing so.
Conduct aging and bad debt analysis
Aging debtor analysis as basis for impairment loss assessment is probably the methodology most familiar in the accounting industry. the issue is today that this information is carried out 30+ days later and so isn’t as effective. Automation can be used to leverage real-time aging reports, freeing up more time for your team to focus on collections.
Escalating disputes
As a general rule of thumb, the longer a dispute is open the less likely it will be paid in full. RPA can instantly prioritise accounts in dispute and notify employees. Above and beyond this automation can be used for the analysis of payments to identify accounts/lines that are more likely to come into dispute, cross reference with credit ratings and may provide advanced warning where a company may now be in financial difficulty.
case Study
Proservartner worked alongside a higher education company who were frustrated with the high error rate and cost associated with their manual accounts receivable processes.
The organisation were spending a massive 1030 hours each month on the cash application process as a small AP team needed to log into multiple sources to obtain remittance information. They then needed to retype this information into their accounting system, which is where a number of human errors were occurring. The AP team felt pressured to carry out a large amount of manual work in a short amount of time, whilst ensuring no errors and felt they were in a no-win situation without a different solution.
Proservartner were able to streamline a number of their processes by creating a central archive which stored all remittances. We then created a bot using RPA (Robotic Process Automation) which retrieved remittances and extracted the relevant information. Automation was then utilised for the matching up of invoices and payments.
The organisation was able to save a massive 1030 hours each month, with a monthly saving of over £11,300. After seeing the impact that RPA could have and how bots were customised to their exact needs, the company has decided to expand their automation efforts moving forward.