Do you want to improve your cash flow? Do more with less? Reduce your Days Sale Outstanding? Increase the efficiency of your organization’s accounts receivable function? Most AR processes have significant room for improvement — imagine how much more your employees could do if some of the manual tasks were automated.
Unfortunately, the limitations of most accounting and ERP systems mean that efficiency improvements are incremental at best when you’re operating within just one system. If you truly want to put your accounts receivable function to work for your business, you likely need to integrate additional software to get all the functionality you need and to share data across systems in the best way possible.
The Benefits of Accounts Receivable Integrations
AR integrations are important because they enable automation. You can’t automate your AR — and gain all the associated benefits, like saving time and money and reducing errors — unless you integrate with the right systems to sync with your invoices, emails, contacts and more.
But automation in AR is about more than just efficiency. Traditionally, accounts receivable processes are shockingly manual, and you can reach an early point of diminishing returns, where it’s not worth the time and effort to manually chase after those invoices that remain unpaid. Automating your accounts receivable is about streamlining the follow-up process to overcome those diminishing returns.
There’s one catch: automation only delivers those benefits if you have the right accounts receivable integrations. And to capture their full potential, you need them to be two-way integrations.
With AR automation and bilateral integrations, you can:
- Automatically send invoices
- Automatically send reminder emails
- Automatically receive payments (both one-time and recurring)
- Automatically generate reports
Otherwise, you’re limited in just how much you can automate, because you’re operating within one siloed system — you can’t send automatic emails if your accounting system isn’t linked to your email application.
Not All Integrations Are Created Equal
The best integrations should function as a two-way sync of information between your accounting system and the software that updates automatically. And they shouldn’t require you to change your workflow.
With a full two-way integration, you’ll be able to integrate all the data and systems that need to communicate with AR, such as:
- Work orders in your ERP
- Up-to-date contact info in your CRM
- Communications in your email application
- Invoices in your accounting system
You can use these integrations to create all the automation rules you want, pushing data back and forth or enabling automatic syncs between different systems. That way, when an account pays an outstanding invoice, your ERP and contact record reflect that and that account should be automatically removed from the reminder email recipient list — without any manual work.
Best of all, you won’t need to change your existing processes to take advantage of these features. You can keep your lockbox in your accounting system, and you’ll just see that data reflected in other systems without having to reenter it. You can send automated emails and still receive responses to your inbox like any other email, because it’s all done via an integration to your email provider.
Ideally, these integrations will treat your accounting system as the sole source of truth. For instance, if the contact record in your CRM says none of the balance has been paid, but Quickbooks or Xero says that half the invoice is paid, the accounting system’s data should override and automatically update the CRM.
Beware of One-Way Accounts Receivable Integrations
Many third-party systems and ERPs advertise an integration with the systems you use — Quickbooks, Xero, Sage Intacct. But most simply pull data one way, leaving your team to manually record update in the other system.
Here’s an example. If an invoice gets paid, your accounting system must be updated directly, and then someone needs to record it in your ERP. That creates a new invoice that isn’t linked to the original — they won’t update each other, and you’ll have to manually copy everything over.
In other words, these integrations function more as a data import, because they don’t link data from one system to another. They often create more work than they actually save: you might spend additional time reconciling the two systems or even change your entire process to account for the one-way data flow.
How Can I Improve My Accounts Receivable Process with Integrations?
Ultimately, your accounts receivable integrations should exist to improve your AR process and enable truly effective automation. To do that, you need the right AR automation platform that helps you bring all your integrations together the right way.
One Central Hub for Accounts Receivable Integrations
With BlueSnap AR Automation, you can transform your accounts receivable and reinvent traditional processes like quote-to-cash.
Whether you work in Quickbooks or Sage Intacct, Salesforce or HubSpot, Gmail or Outlook, you can integrate with BlueSnap AR Automation to unite your data. Best of all, these two-way integrations are pre-built, making setup easy.
The tool also unites payment processing with accounts receivable management so customers can pay your invoices easily and automatically, without having to mail checks. And with automated email reminders, invoices get paid quicker to reduce your Days Sale Outstanding.
Essentially, our AR automation tool functions as a third-party hub that integrates and automates all your systems for the ideal state of AR.
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Accounts Receivable FAQ
Looking for more information on the fundamentals of AR? Check out these frequently asked questions:
What is accounts receivable?
Accounts receivable is the process or department that manages money owed to you by clients and customers. This is in contrast to accounts payable, which represents money you owe to vendors.
Typically, AR is primarily concerned with invoice management. An invoice essentially functions as a line of credit to your customer, indicating how much is owed and when it’s due. Your AR process tracks where that credit is issued, how much is owed, when the money is due back, etc.
It’s important to have a solid AR process to keep a steady cash flow and ensure that your business is paid promptly for its services. AR ensures that invoices are sent out to the right person and paid back in a timely fashion.
What is the accounts receivable process?
At its simplest, the accounts receivable process consists of:
- Sending invoices
- Following up with customers
- Receiving payments
- Updating accounts
First, you send invoices out regularly as customers purchase goods and services (this typically starts in an accounting system like Quickbooks, which helps you track invoices).
You then generate an aging report that shows the status of each invoice, including how long each has been outstanding. You download that to a program like Excel, often starting with the biggest invoices still outstanding, and investigate the backstory of each invoice. This can mean combing through emails, CRMs and accounting programs to confirm that the invoice was sent, whether the customer has responded, how often you’ve reached out and so on.
From there, you follow up with customers as needed via email, phone or mail to remind them their invoice is past due. This is often manual.
You then receive a payment, typically in the form of a mailed check, and you check the balance against the amount due.
Last, you update your accounts in various systems to reflect the payment. This includes inputting the payment amount and date into your accounting system, ERP, CRM and more. You might also add notes into one of those programs on the health of the account.
Crucially, the vast majority of this traditional (and common) approach is manual.