Accounts Receivable Process: 6 Challenges and How Acumatica Can Help

A healthy cash flow rate is essential for any business to thrive and outdo competitors. Sufficient liquidity allows you to cover the costs of running your company, pay debts, and allocate resources to areas that will ensure the growth of your enterprise. Unfortunately, maintaining cash inflows can be challenging for many companies and is one of the leading causes of the collapse of startup businesses.

Luckily, adopting an ERP system is one of the easiest ways to remedy the low inflow of money. Acumatica offers AR management software that can help you streamline your business operations and increase the amount of money you receive regularly.

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This post discusses common AR-related problems and a suitable solution from Acumatica for the situation.

Let’s get started!

1.   Foreign Currency Payments

One of the challenges that arise in the Accounts Receivable process is paying invoices in foreign currency. This can be problematic when there isn’t a way to track accurate balances when the client pays the bill in a different currency than the one used in the calculations. As a result, it can be difficult to realize whether you are making gains or losses as you convert the cash from one currency to another.

You can make this step smoother by using the Acumatica software, which automatically translates the currency to your default unit. At the same time, if there is a balance, the record will be kept in both the foreign currency and your base currency for maximum clarity. This will make it easier to determine whether the payment in the foreign currency matches the invoice you sent. 

2.   Uncollectible Debts

Sometimes, business owners offer unlimited credit limits to their customers, making it hard to maintain enough liquidity to handle regular operational tasks. This is because there isn’t a system in place that can determine when the credits you offer overwhelm your expenses.

With the Acumatica AR management software, you can set a credit limit amount to issue a warning or block an invoicing process. As a result, you won’t go overboard in offering credits to your customers, which could lead to increased exposure to uncollectible debts.

The software could also issue persistent messages for the accounts that are past due in paying their invoices. This helps ensure your business stays liquid enough to handle your incoming bills and necessities, which helps you retain a smooth operation.

3.   Billing Mistakes

When working with a manual billing system, billing mistakes can arise every so often. This is because your employees are susceptible to human error, especially when there is a large customer base. When customers get overcharged or incorrectly taxed in their invoices, they can withhold payment until the issue is resolved.

Unfortunately, this can reduce your cash inflow and cause problems for your enterprise. While a one-time billing error isn’t that big of a deal, there is a higher risk involved if there are frequent mistakes in the invoicing process.

You can avoid such scenarios with some help from Acumatica since our software allows you to calculate and deliver accurate invoices automatically. In addition, these records will be saved on your system, allowing you to audit or refer to the transactions in the future. With reduced billing errors, your customers can make on-time payments that will help keep your business afloat.

4.   Late Invoicing

Another common challenge in the Accounts Receivable process is the late delivery of invoices. Different companies have different payment schedules, which could be monthly or twice a month, depending on your agreement.

When your invoicing schedule doesn’t align with the payment window of a customer, they could complain that they didn’t have enough time to handle the invoice. As a result, you’ll need to provide additional time for them to make the payment which could affect your cash flow and ability to run a smooth business.

It might not be possible to synchronize your invoicing system to your customer’s preferred payment window all the time. Nevertheless, with the Acumatica AR management software, you can run a smooth billing operation even for recurring charges. Furthermore, you can send the invoice or statement early enough for the customer to handle it on time with a competent billing schedule.

Without payment delays, you’ll have enough cash to handle your daily operations without compromising your relationship with the customer. Acumatica offers overdue charges calculation to determine the amount of money you charge customers who make late payments. This function helps raise your collection rate, providing more liquidity for your business.

5.   A Slow Rate of Matching Invoices

Matching payments to invoices is one of the most time, and energy-consuming tasks the Accounts Receivable team handles. The manual sorting of this information requires a lot of effort and could lead to mismatches, making it harder to track the cash flow and data correctly. You need to know which customer paid what amount of money for every transaction that takes place.

Acumatica can help you make the process of matching payments to invoices automatic to reduce the strain on your AR department. It does this by applying the payments starting with the oldest statements to the most recent. As a result, you can void any payments that are incorrectly applied or reverse affected balances.

This system will ensure you can match invoices in a systematic way that guarantees you receive the payments you need at the right time.

6.   Unauthorized Account Access

The security of the customer account information and balance is another area where you could encounter problems. It’s crucial to have a safe system to ensure that unauthorized personnel can’t access the account unsupervised. While it’s essential to nurture a trusting environment with your staff, you shouldn’t leave anything to chance.

If every member of your organization can view and modify account information, it’ll be hard to determine discrepancies, and you could incur losses without knowing. That’s why you need a security system that restricts access to sensitive data linked to customer accounts.

The Acumatica AR management software will enable you to select the individuals whose responsibilities require them to examine the accounts of different customers. This will reduce the chances of unlawful modification of account data which can reduce your liquidity.

We Can Resolve Your AR Challenges Today!

Handling your Accounts Receivable process manually can wreak havoc on your finances. That’s why the best way to ensure a smooth inflow of cash is to incorporate an AR management system in your business.

Let Acumatica streamline your AR process, and we’ll provide a timely solution for all your challenges.  With our Acumatica software, you can improve your revenue and handle operating costs without breaking a sweat. So reach out to our Cloud 9 ERP Solutions team, and receive the help you need today.

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