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Accounts Receivable Automation Software Vendor Questions

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Choosing accounts receivable automation software can be overwhelming–especially when you survey all the options that are on the market today. 

You may have already perused different websites, talked to colleagues and even attended a few webinars. And you still find yourself in limbo. How do you whittle down the list of vendors that you want to take the next step with and set up a demo?

Or you may have only just recently decided that adding AR automation software is a priority. And even though you understand it’s a critical purchasing decision, you really don’t look forward to wasting time weeding through all the many choices out there.

Either way, it’s helpful if you start out your research with a standardized list of questions to guide you in your decision process.That way you can know exactly what to look for and compare vendors point by point. You’ll want to keep in mind the specific tools your finance team needs to gain efficiency and boost productivity. And some of their wants too.

Using the right accounts receivable automation software makes a night and day difference for those who work with it every day and also for the business as a whole. So it’s crucial to zero in on the ideal solution to get the most value and highest rate of return on your investment.

There’s no better time to get started, so here’s that list. It begins with broader questions to help you get a clear understanding of the problems you’re trying to solve with a software solution.Then the next set of questions will touch on specific features you should look for.

What does my AR team really need?

This is really a question for you to answer before you start looking at vendors. Because your collections team are the folks who will actually be using the software on a daily basis, it’s important to talk to them first. Ask them to identify the top challenges that need to be addressed in order to drive up collections. Drill down and really understand the issues they deal with. What’s the most difficult, time-consuming and/or frustrating part of their job? What tech tools do they believe would make their job easier? Finally, are there other internal stakeholders that should weigh in on this needs analysis?

Do we have a collections strategy? If so, does this solution support it?

Obviously, the overarching goal is to collect as much of your receivables as possible. But there are nuances of a well-defined collections strategy to factor in. They support your business values and goals. And believe it or not, if you take the time to investigate thoroughly you will find unique features in different AR automation software solutions that will align with your strategy more closely than others.

What if customer retention is a key business goal? Then you’d want to make sure the solution you end up with does more than simply send out payment reminders. In addition to invoices, it should give you other options for communicating with customers that will foster strong relationships.

Conversely, if your focus is solely on increasing payments, the best software is one built around this basic goal. In that case you’ll want the software to invoice, send reminders, offer payment options and track paid vs. unpaid invoices.

Does the vendor focus on a specific industry or business size?

You’ll probably notice that although there are plenty of AR software options designed for just about any market, there are some vendors that cater to specific sectors. Others may market only to enterprise level organizations. Since finding one that fits your business best is so important, here’s a subset of questions to further guide you:

  • What kind of experience does the vendor have with my services, products, industry or businesses of similar size?
  • When it comes to regulations that affect the way I do business, does the vendor have a solid understanding of them or do they seem unaware in this area?
  • Will the AR automated solution work seamlessly with my existing systems of record and other IT requirements?

Does the software address compliance and legal standards that impact my business?

There are strict regulations regarding collections and data management for a number of industries and locations. In the United States, businesses in the sectors of health, insurance, law and accounting are required to follow these rules or risk having to pay hefty fines.

Accounting and collections, for example, may have different guidelines depending on whether the customers are individuals or business entities. There’s a handful of consumer laws that define the way a business can collect from struggling debtors. 

The fine you would have to pay for violating these consumer laws could actually be more than the debt you would collect, so make sure a vendor you’re considering is aware of regulations that your business must follow.

Does the vendor offer a demo and a sufficient trial period?

Big decisions such as deciding on AR automation software need not be final. Most vendors will be happy to set up a demo so you can see exactly how the software works. This gives you a chance to test a variety of products over time. Use a set of KPIs to keep the evaluation process more objective:

  • Accounts receivable aging
  • Average days delinquent
  • Average collection period
  • Day sales outstanding
  • Receivables turnover ratio
  • Total amount recovered

The answers to the above questions should narrow your search. You’ll now be able to eliminate some vendors while others will make your contenders list. Continue your research by finding out the answers to this next set of questions which focus more specifically on common features of AR automation software:

Does the solution leverage machine learning (ML) and/or artificial intelligence (AI)?

ML and AI are technologies that allow computer systems to think, make judgments and perform tasks like humans.  By choosing AI-enabled accounts receivable automation software, you will benefit from its ability to identify risky accounts, optimize payments and provide more accurate cash forecasts. 

Does the software provide a single view of cash positions in real-time?

Any software you’re considering should allow you to see cash positions in real-time. This is important for improved cash management and forecasting. But look for a solution that displays all the information you want in a single screen.

Does the software include a customer self-serve portal?

This feature will give your customers more control and visibility. They can easily view and pay their invoices without having to connect with one of your team members or mail a check. This added layer of convenience improves customer service as well as your DSO and DBT.

What integrations are available?

Make sure the software includes seamless integrations with your ERP/accounting system, banks and payment channels. Having these connections built-in saves your IT resources and allows you to go live with your new software much faster.

Does the AR software reconcile accounts automatically?

You want the most efficiency you can find in a solution, right? You want to reduce manual inputs and improve accuracy. Then don’t settle for AR automation software that doesn’t reconcile your customer accounts and your own bank accounts. This feature is essential for the most up-to-date cash positions. 

How intuitive is the interface?

This is something you get an immediate gut feeling about. Screens should appear clean and uncluttered and flow in a way that makes sense to you. 

How much flexibility is built-in?

Do you currently do business globally or plan to in the future? Does your business have a number of separate entities? If so, you’ll need to track cash flow in multiple ways. Look for a vendor who offers a scalable solution that provides cash flow insights across different currencies, systems, banks, companies, departments and projects.

What components are customizable?

Can you choose the timescale of your forecasts? Can you customize alerts that go out to your customers? Will you be able to set up automatic segmentation of cash transactions and assign them to meaningful categories? These are all important items to check out.

How’s the customer support?

In terms of training and troubleshooting, you’ll want to get the details. Find out exactly how each kind of support is delivered. Also make note of how responsive the vendor is and if they’re style of communication is a good match for you and your team.

Payference: An AR Automation Software Vendor Worth a Look

The benefits of automated accounts receivable system are truly transformative–especially if the software leverages ML and AI.  Real-time visibility into current and future cash positions provide what you need for improved cash management, forecasting and other key decisions. Automated workflows decrease manual effort, reduce errors, increase accuracy and improve cash flow.

Payference delivers all these benefits and more. Put Payference on your list of vendors to check out and reach out today.