The accounts receivable (AR) is perhaps the most instrumental process for any organization. The reason behind it is that inappropriate AR management could result in distorted cash inflows, which could eventually impact the ROI of an organization. There are several challenges encountered by the employees due to improper AR management.
An independent research firm conducted a survey and found the top three challenges that include Days Sales Outstanding (DSO), AR staff productivity, and reducing portfolio risk. 87% of candidates faced the DSO challenge, while the other two challenges were encountered by 86 and 84% respectively.
If organizations invest in streamlining their AR process, these challenges could be eradicated in a short while. Automating the AR process will be the right step towards improving AR productivity. However, organizations must be wise in choosing the right process to automate based on their requirements and budgets.
How is RPA transforming the Accounts Receivable Process?
Robotic Process Automation is one such automation technology that primarily focuses on automating business tasks that are redundant and manual for employees. When employees perform these tasks daily, there are chances of high error-rate, reduced speed, and eventually a slower turnaround time. RPA can capture your business data to trigger responses based on a pre-defined workflow.
A study by Boston Group suggests that by 2020, automation will take control of over 25% of the business processes that are currently carried out manually.
Over the years now, the finance department in most organizations is known to be short-staffed and engrossed in work. Most often, this is because there is a lot of paperwork involved that goes along with collections, such as creating credit reports, creating invoices, and typing out emails to customers for payment reminders. By deploying robotic process automation, these manual tasks no longer need human intervention, allowing the employees to focus on more value-added tasks such as building healthy relationships with the customers, creating and building strategies within the department to streamline the processes and ensure smoother operational workflow.
So, what are the potential candidates for automation in the accounts receivable process? Below are some specific areas where RPA has come in handy for the accounts receivable department.
- Invoice creation
- Automating emails
- Invoice dispute transparency
- Credit score alerts
Let’s delve into one of our success stories where we have helped our customer automate their invoice creation process to ensure 0% error-rate and 100% faster business outcomes.
About Our Customer
Our customer is a publicly-traded global logistics company, providing freight forwarding, transportation, warehousing, and supply chain management services to businesses, governments, international institutions, and relief agencies worldwide. Their commercial arm manages the shipment and delivery of finished goods, parts, raw materials, and other cargo by sea, air, road, or a combination. They also provide warehousing and distribution services, along with services and technology that track and manage shipments and inventory.
The Predicaments in Invoicing
The challenges thrown at our customer’s finance department were myriad.
- Uniform invoice patterns
- Fielding customer inquiries about invoices
- Smooth transactions
- Receiving late payments
- Rising Days Sales Outstanding (DSO)
The finance department was engrossed in paperwork as they were receiving over 400 orders every day. Since our customer had vendors across the globe, all the vendors had a unique invoice pattern. The employees had to manually enter each purchase order in their Oracle system and create an invoice for each of them. After creating the invoices, the employees had to send out emails to the customers attaching the invoices. Eventually, the finance team had to maintain track of their customers’ outstanding invoices and forced to send payment reminders to avoid late payments. The customer was looking for a solution that could automate their invoice processing and emails to process the orders faster.
After evaluating their manual invoice process, Aspire collaborated with the customer to implement an end-to-end automation solution that simplified the invoice creation and avoided late payments from the customers.
The RPA bots were able to create receipts for all the purchase requests received from the customers and generated invoices for the receipts. The bots would run the invoices for bugs by matching them with payments in the purchase requests. Once the invoices were dispatched, emails were automated to send out payment reminders to the customers regularly to avoid late payments.
With Aspire’s robust framework, we helped our customer achieve more than $300K cost savings per year, warranting an overall savings of about $800K per year.
If you were skeptic about automating your AR process, we hope this blog gave you all the reasons to start your organization’s automation journey with Aspire.