You must be living under the rock if you didn’t know the rising importance of AR and AP management gaining mainstream attention for successful business growth.
Managing your AR and AP in a systematic manner is one of the prime concerns for all business types. An efficiently managed account leads to steady cash flow and a much better scope of growth. But if it’s so important, then most of the businesses must be handling it quite actively? Isn’t that the scenario?
In today’s time, most of the startups are spending a bounty upon skilled resources to handle their AP and AR in a systematic manner. But despite spending so much on account management, the final result is mostly a nervous face in front of an unbalanced account sheet wondering about how to strike a balance between account payables and account receivables.
Take this, 60 percent of small-business owners and entrepreneurs feel they are not very knowledgeable about accounting and finance (Small Business Report – Accounting). Putting in manual labor and hours of effort won’t fetch you satisfactory results. What you really need is to innovate your business perspective and be inclusive of new advancements in technology.
AR and AP automation is gaining momentum for effective account management. More than 64.4% of small-business owners and startups are now switching over accounting software to keep a track of their account’s well being.
Here are the Top 4 Expert Hacks to ease your AR and AP Management for your Startup
1. Easy Customization of AR and AP management
Non-customization of resources is one of the biggest roadblocks for every business. Sticking to traditional ways holds a lot of value in general life, but in business, things are often played a little differently. Holding on to a traditional method of account management creates a lot of issues for your accountant often leading to problematic conclusions.
We are not boasting, but we are just letting you know that according to the Aberdeen Group, with minimal automation, it may take up to 16.3 days to process a single invoice. Manual accounts payable management is not only tedious but also hampers your staff’s productivity. Investing so much of your precious time into creating just a single invoice leads to time mismanagement and decreases the marginal utility of the resources meant to be spent on other projects.
Customization of your accounts simplifies your overall process. Customization allows you to mold your existing accounting software as per your own set of requirements. It simply integrates into your existing CRM and ERP systems for fluent functioning. It also helps you to manage your staff and expenses for an efficient workflow.
It not only adds to your overall efficiency but also leads to better productivity and adds to ease of doing. Customization also makes your whole business process transparent and immune to manual errors thus enhancing your results and cashflow.
2. Sort your Purchase Order Management
Most of the enterprises end up spending too much of their valuable resources in managing their purchase orders. Inferring insightful data from your paper PO is often a kerfuffle between the two opposing data entries. Wondering why?
Recording your purchase on a sheet of paper has an inherent flaw of wrong data entry. Since the induction is manual, it becomes prone to double data entry, mismanaged data, incomplete entry and much more!
Don’t believe us? Did you know around 3.6% of invoices manually entered include an error caused by data entry? This may seem minor loss but it gains an important pedestal when there are several purchase orders which need to be prepared on a daily basis.
Facilitating the whole process of PO management is the key to strike a balance between your balance sheets. An accounts receivable software automatically inducts your PO which further allows careful matching with your inventory leading to sending the exact payable amount as mentioned in your accounting sheet. All this culminates into well maintained balanced sheets and steady cash flow.
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3. Pace up your Invoice Approval
Maintaining a smooth functioning within your business verticals is imperative for continued business success. Defining specific roles to every individual along with assigning tasks is one of the most valuable characteristics of a successful startup or enterprise.
Working in a business is similar to the working of your body. When all the parts work in unison, it leads to lesser efforts and much more productivity. But what will happen, if we take out one part from the whole system, wouldn’t your activity and ease of doing things get hampered? This is what happens when there is no defined workflow within a business which leads to decreased productivity and severed workflow.
Good management of AP and AR comprises of an effective and harmonious collaboration of employees. You can manage your accounts by defining your invoice approval process and the duties assigned to every individual. With automation, you can keep track of your invoicing process along with acute tracking on inbound and outbound cash allowing easy accounts payable management.
4. Make Your Expense Management a Smooth Sail
As the wise old saying goes, “even a small leak can sink the ship”. It’s not a hidden fact that expense management is as much important as handling clients or looking for entrepreneurial opportunities. Expense management is much more than balanced sheets and accurate account statements.
In order to manage your expenses, you have to focus on the root source which is your account payable and receivable. Untimely payments and inaccurate invoices are one of the biggest roadblocks for all startups and enterprises. Delayed payments ultimately lead to discontinuous cashflow.
As per the studies, 58% had needed to pay late payment charges to suppliers. No wonder what all could have done with this amount of money!. Apart from this, startups and enterprises also fall prey to incorrect estimates leading to limited financial vision thus hampering their client’s accounts as well as their own finances.
With automated custom billing software for AR and AP management, you can keep a track of your expenses in real-time along with custom reports for efficient financial forecasting. In this way, you can cater to multiple clients from one platform and make your AR and AP management a smooth sail.
Handling humongous accounts with daily entries and a keen sense of observation is something that bothers almost every business type. Be it a startup, enterprise, or even a multinational company, facing a cash crunch is something that everybody wishes to avoid.
The business is transitioning and driving towards a much holistic development route which allows them to induce innovation into their business models and keep a steady growth rate. Since revenue is the major driving factor for any business type, it becomes imperative to handle it wisely. Custom invoicing software bridges the gap by presenting single window solutions to all your expense related worries.
The above-mentioned tips are based on the years of experience in watching the business succeed and fail up close. The world is moving towards technology-driven automation. Thus customizing your AP and AR management is your key to steady growth and fluent cashflow. Always remember, every business needs to be nurtured with care and supply it with all that is necessary.