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For any business to run efficiently, it needs to not only have a strong accounting management system but also have a keen understanding of it. At times, as a business, you make sales but are not paid immediately. This is known as accounts receivables. Accounts receivables are recorded as assets in the balance sheet and are treated as current assets. Accounts receivable management is extremely important from a business point of view. It is a measure of businesses’ liquidity and ability to meet short-term expenses without making additional cash flows. This involves making daily single or double entries, maintaining a ledger, invoicing, etc. Manually doing accounts receivable management is a cumbersome process and prone to errors. This is why it is important to automate your accounts receivable management by using accounts receivable automation software.
What is the Accounts Receivable Software?
Accounts receivable software helps in automating the entire process of accounts receivable management process and helps your business in generating invoices, sending financial statements, collect the pending payments, check the balances, deliver payment reports to your customer, etc.
Accounts receivable automation software is especially useful for bringing together the various teams using financial information, for using data to scale up your business and become more profitable.
List of Top Rated Accounts Receivable Software in 2023
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What are the features of Accounts Receivable Software?
The money management process of a business is extremely complicated. Many times payments are delayed because your customers don’t adhere to the set credit terms. In today’s times when almost all the functions of businesses are moving towards digitization, we cannot leave this process to manual paperwork.
Once you decide to invest in Accounts receivable automation software, before buying the software you need to have a careful understanding of its features.
There are various types of software available, all with different features. There are options of On-premise accounts receivable software, Software-as-a-service (SaaS) accounts receivable software, and Cloud hosted accounts receivable software.
We are listing some of the most important features that account receivable software must have:
› Customer statements:
Accounts receivable automation software will allow you to automate the process of entering the customer statements. This is very beneficial at the time of reporting to your internal management and to the customers about the status of the payments and informing them about their outstanding’s.
› Ledger of accounts receivables:
An important feature of accounts receivables software is that it should be able to update the list of your customers and their respective outstanding payments each month. Unless you keep a track of this reporting, you cannot manage the flow of cash properly.
› Listing of accounts receivables:
Another important feature of accounts receivables software is that it should be able to organize the process of your accounts receivables management on the basis of customers and date of payments due. The software should be able to customize the ranges and columns as per the needs of your business.
› Centralized database:
Your accounts receivables software must be able to store all your financial data in the form of a centralized database that makes it easy for relevant teams to track the information and reports whenever required.
What are the benefits of Accounts Receivable Automation Software?
Accounts receivable automation software has numerous benefits in making a business’ accounts receivable management process efficient and simple. We are listing some of the major benefits that this software brings to your business:
› Enhanced cash position for the business:
When your account receivable management process is automated, you know exactly where your payments are coming from and when are they coming. When this is clear, you understand the financial position of your business more clearly and are able to make sound and timely investment decisions.
› Improved business efficiency:
When you understand your cash position better, you can take better decision pertaining to your business. This automation not only helps you in letting you focus on the core business issues instead of the mundane day-to-day tasks. You can now focus on product innovation, hiring of quality people, expanding to newer markets, reaching to new customers, etc.). All this, in the long run, will help your business become more profitable and sustainable.
› Better management of accounts receivables:
Manually, it is a tedious task to keep a track of which customer is supposed to pay how much and reminding your debtors to make timely payments. It helps you in knowing in advance about the invoices that need to be sent so as to receive the payments on a timely basis.
› Reducing the length of the payment cycle:
When your payment processes are automated, you know when to raise an invoice and remind customers to pay. This avoids the delays which might cause the payments to get pushed behind.
› Reduction in costs:
Installing accounts receivable software helps you in saving costs of hiring a huge accounts team and spending on the various overheads that come with it. This leaves you with surplus money to let you focus on other functions of your business.
What is the cost of Accounts Receivables Software?
The cost of Accounts receivable software depends on many factors like the features that they have, how they are deployed, their availability in the market, the brand name of the developer authoring the software, etc.
With all the benefits that this software brings, it is certainly an intelligent investment. However, you should be careful about the type of software that should be purchased. This should be in tandem with the needs of your business.
We advise you to conduct proper due diligence before making this investment. You should not invest in low-quality software just to save some money.
Conclusion
With thousands of accounts receivables software brands available in the market today, we understand that making a choice can be overwhelming and confusing. We advise you to critically review all the alternatives available and ask for quotes from the shortlisted software providers.
A great way to understand the compatibility of your business with the software is to use the basic free version and see if the accounting teams are comfortable using the particular software or not.
