Transportation companies are constantly in need of cash flow to deal with rising fuel costs, wages, maintenance, and other immediate financial obligation. On top of managing cash flow in the ever-changing industry, billing, tracking accounts, minimizing bad debt and maximizing collections still need to be done and are often time consuming and a challenging process.
At the end of the day you want to get paid so you can be profitable, which is why collecting on accounts receivables quickly and effectively is critical in your business. However, getting paid is easier said then done.
The Challenge in Getting Paid Using a Manual Process
Transportation businesses are said to have some of the slowest paying accounts receivables in any industry. And that doesn’t help getting your cash flow to be fluid and flowing. There is a considerable amount of time spent tracking, managing and balancing accounts to ensure that all receivables are collected on time.
In a typical accounts receivables and collections process in a transportation industry, an AR clerk waits for documents to be returned by driver, then the clerk has to manually create invoices for distribution to customers, supporting documents are attached to printed invoices, emailed or physically mailed and then the package is scanned and filed away for recording keeping.
The invoice then sits with the customers for a period of time – sometimes up 60+ days before paying. A clerk has to then manually follow up by sending several reminder emails to customers that payment is due. It becomes a constant cycle to get payments in.
Often problems arise when customers pay late, don’t pay at all, go bankrupt, or dispute charges that stall payment. When these things happen, and they do, using process automation and document management software can help to minimize loss, speed up the collection process and resolution.
Why Should You Use an AR Automation System?
Replacing these manual processes with an automated account receivables and collections system will streamline the business processes of the billing and collections department and allow your team to be more efficient.
Using an automated AR solutions allows your team to:
- Capture invoices in any number of different ways such as through monitoring a central inbox, saving a PDF from Outlook, dragging and dropping a PDF into a shared folder, fax, physical mail etc.
- Improve invoice processing efficiencies and reduce human errors where documents can be provided to the right billing personnel, in the right format, at the right time
- Store invoices within your document management system so that they are accessible by staff anywhere and at anytime
- Send reminder emails request payment can be automatically generated and distributed with all the supporting documents to customers
How Will Using an Receivables System Benefit You?
By using an automated accounts receivables process, your organization can:
- Reduce costs and tasks associated with producing and mailing of invoices by automating labor-intensive portions of the billing cycle
- Reduce Days Sales Outstanding (DSO) and increase cash flow
- Increase management visibility over the status of outstanding receivables
- Reduce payment delays and improve cash conversion cycles
- Improve the efficiency and results of your collections team
Watch our recent webinar, Synergize Lunch & Learn – Getting Paid: Unlock the Hidden Value in Your Receivables to learn first hand how automating your accounts receivables can help your business.
Founded in 1995 and headquartered in Markham, Ontario, Microdea is a fast growing document management and automation software company serving hundreds of customers in the transportation and logistics industry, including truckload and LTL carriers, private fleets, brokers and 3PLs.