Account Receivables Software is the Solution!
To run a business at its maximum efficiency, you have to manage two things well- Time and Money. However, when they both work together they can pose a bigger challenge, such as the DSO ratio, which can’t be handled properly unless you take measures like an Account Receivables Software.
DSO, which stands for Days Sales Outstanding is a measure of the average number of days it takes you to collect invoices payment when a sale is made. Naturally, you would want it to be as low as possible. However, the truth is that irrespective of how long have you been in the distribution and dealership business; it’s usually a herculean task to keep the collections process under control.
Why is it hard to improve DSO even today?
The main reason behind high DSO is that the invoicing and collections processes are quite manual in nature. Even when you are using a spreadsheet program or an ERP solution like Tally, you have to feed the sales data into the software program manually. What’s more, when you have to check for the payment processing and collections, you have to go through the files, once again “manually.”
If there are corrections to be made in the invoices payment (overdraft, advance invoices payment, deduction due to defective products), erroneous costs or taxes applied, etc. then it’s another problem to handle.
Some other common reasons behind poor DSO include:
- Multi-step payment process that leads to a delay of 4-5 days
- High transaction fees that are levied on the traditional payment methods act as a deterrent
- Ineffective tracing methods for credit card payments, credit notes and discounts
- Misplacement of invoices, wrong tax calculations
How can Account Receivables Software solve the problem?
Forget about long waiting periods, cash crunches, and payment nightmares. An Account Receivables Software is the perfect add-on for your current ERP programs that can give them a wdhole new meaning by improving their functionality and simplifying the overall AR process.
The following are some of the ways an Account Receivables Software can considerably drop your DSO and improve cash flow:
Intelligent Payment Reminders
Is your team spending previous work time on following up with your clients? Are you unhappy that despite your best efforts you are still troubled by late payments? If your answer to these questions is in affirmative, then a new-age Account Receivables Software has something to cheer you up.
AR automation comes with the much-needed “Intelligent Payment reminders” which not only automate the whole process of reminding your clients about the pending invoices but also gives you a slew of tools that give you a high level of control over your cash flow.
You can easily set up the intelligent invoices payment reminders for your various clients, each with their customized message, schedule them to be delivered before, on, or after the payment deadline, and check the customer balance status from the dashboard easily and conveniently. Since the invoices payment reminders are sent automatically, the DSO comes down gradually.
The Account Receivables Software comes with an intuitive and easy-to-use client dashboard that will make you think “why didn’t anyone else think of this?”.
Simply put, a client dashboard is a place where you can create and access all the accounts of your clients that contain the details of their past payments, current invoices, customer balance, payment status, tax calculations, reconciliation status, etc. in real time. This makes it a lot easier to manage them all and make calculated decisions to lower the DSO.
Multiple Payment Options
A lot of your clients want to pay on time, but the sheer inconvenience leads to delays. You can fix this problem with an Account Receivables Software that not only offers multiple payment options but those too at extremely small transaction charges.
Easy Credit Facility
Clients are delaying payments because they don’t have enough funds? Well, you are not the only distributor/dealer to face this problem. In fact, it’s one of the most common reasons behind high DSO. That said, Account Receivables Software has the solution for this as well.
With an automated cloud-based accounts receivable software, you also get the facility of “easy credit,” an option for a business to get a small loan at an affordable interest rate. This does not only help them but you as well, as they can clear the invoice with some portion of the loan and use the remaining for their own business requirements.
You can’t control everything in this world, but you shouldn’t keep from controlling the things that you can. DSO now falls under the second category which is why there is no reason why you should let late payments result in deferred revenue. Set up a reliable automated receivable software today and see for yourself why it’s such a novel and productive tool that you would be hard-pressed to ever let go of it!