Why automation is key for effective accounts receivable management Businesses waste countless hours each year trying to keep track of and chase their receivables. Meanwhile, they could be saving upwards of 15 hours per week with accounts receivables automation.
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n business, it can feel like a constant race against the clock. The last thing anyone needs is to have to chase up late customer payments. The reality is; however, an increasing number of businesses are finding themselves in this position now more than ever. The true lost cost in all of this? Wasted time. Businesses can recoup this lost time by simply automating their accounts receivables. Here’s both the why and the how. When a business provides goods or a service to a customer, but does not ask for immediate payment, this is classed as accounts receivables. It is money that customers owe to a business for goods and services already provided. The money is expected to be paid at a set date in the future, and therefore accountants include it as an asset on the business’s balance sheet. The good vs the bad of accounts receivables The truth: most businesses don’t expect to ever reclaim 100% of these monies. So why do it? Ultimately, it shows that the business was able to obtain
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orders, and successfully deliver them to a customer. Fundamentals for a successful business When the customers are regular and reliable, there is a benefit from selling goods and services on credit, as it acts as a steady income. Businesses can invoice these customers periodically, reducing costs of processing small transactions, and knowing the invoices will be paid. Some other good reasons to sell goods or services on credit are: • Customers are more likely to buy from you if they do not feel obligated to pay upfront • They can be considered as assets which are valuable for business viability • It accounts for items sold (but not yet paid for) on the balance sheet Why can it become a problem? Simply… unreliable customers who don’t pay. Businesses will need to absorb the loss of defaults and therefore need to assume that there will always be a certain amount not received. They need to account for this. When selling to a customer, despite what they say, there is
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Sonia Dorais, Chief Executive Officer, Chaser With nearly 20 years of experience working in fastgrowing businesses, Sonia is the CEO & CMO of Chaser. Prior to this role, Sonia led the growth of numerous fintechs in both Canada and the UK that specialised in the digitisation and automation of finance and accounting tasks and functions.
no way of knowing if they can (or will) truly pay. Having too many outstanding invoices in the accounts receivable looks like a troubled cash flow. These payments need to clear on time to be an asset. There’s always a risk providing goods and services before payment…it just depends whether it is considered worth it in the long run. Automating your accounts receivables As you can imagine, all of the above takes up countless hours of manually chasing receivables. This is why at Chaser, we aligned ourselves to solving the problem of late payments for businesses through automatic and intelligent email chasers. To date, Chaser has helped users chase over £3 billion in overdue invoices, without losing the human touch. How does it work and what are the benefits? The system works by streamlining all of a business’s chasing activity into a centralised hub. This means they can see every outstanding invoice in one, central location and avoids the risk of chasing too frequently, not at all, or even
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