The True Costs of Relying on Manual Accounts Receivable


Your finance department has been using the same manual Accounts Receivable (AR) processes, aging spreadsheets, and dunning campaigns for years. And basically, it works: Your invoices eventually go out every month, you attempt to keep track of customer past-due accounts, the collections team works hard to get old invoices paid, and you produce a month-end cash flow statement reflecting all of the business cash inflows and outflows. As CFO, this makes you think: Why fix what’s not broken?

But that’s the wrong question to ask. Instead, consider what this manual accounts receivable setup is costing your company given the savings that can be generated by today’s automated accounts receivable tools. In the age of Artificial Intelligence, they can be the “driver of differentiation that not only increases productivity, but also boosts growth,” according to Deloitte.

So, how much is manual Accounts Receivable costing you?

Manual Accounts Receivable Processes Take More People More Time to Do Less Work

If you don’t get this month’s invoices out or start this week’s dunning campaigns, there won’t be as much cash flowing into your company as there could be. With a manual accounts receivable system, it takes team members and time to get such essential tasks done. This leaves less in your staffing budget and work day for everything else, especially business strategy, which is a key function of today’s finance organization.

Automated accounts receivable flips that dynamic. It takes over the most time-consuming aspects of AR tasks, such as sending invoices, customizing dunning emails, and collecting on and reconciling accounts. This frees up your staff and your time to focus on growing the business.

People Make Errors and Have Opinions

It can’t be helped. Humans are fallible. The mundane, repetitive nature of many accounts receivable tasks can make this worse. And whether intentional or not, inherent human bias can produce skewed predictions about when to expect customer payments or when to press harder (or easier) for payment. Not only do such errors and biases in manual AR delay and possibly diminish incoming cash, but they also take time to fix.

In addition to cutting the time it takes to complete manual AR processes, the end result is far more accurate. And because they’re embedded with AI, Accounts Receivable automation has the ability to learn what collection practices and dunning messages work best for each customer.

Manual Accounts Receivable Limits Growth

The need for more staff, and the high potential for human error, impact the cost side of the equation. What about the revenue side? With manual accounts Receivable, you’re always looking backward, which means you’re not catching important trends and ultimately missing out on opportunities to grow. But automated accounts receivable focuses forward, which Deloitte says can help you drive strategic business decisions.

It’s Never Been So Efficient to Bring in Your Receivables

There’s no need for it to cost so much money to bring in more cash for your business. If you’re ready to conduct your own cost/benefit analysis of automated accounts receivable, reach out to Tesorio today to see how much you can cut costs and speed up your AR processes.