Have you ever wondered why SaaS companies face constant revenue losses? Or why do their SaaS operations need better accounts receivable management as they are not using accounts receivable tracking software?
According to statistics on Accounts Receivable Automation Software:
“SaaS businesses lose approximately 9% of their monthly revenue due to failed payments. To prevent this revenue leakage, implementing an effective dunning management system is essential.”
Gone are the days when SaaS businesses relied heavily on spreadsheets for internal operations. Particularly in finance departments, managing accounts receivable (AR) often involves aging spreadsheets and repetitive dunning campaigns.
Well, this is the main challenge that every SaaS-oriented business faces. Whether your company is a start-up or a billion-dollar annual revenue generator, it all depends on how efficiently you manage your accounts receivable processes.
Now, how can we fully automate accounts receivables processes? Automation is the fastest-growing area of technology investment. No one has given a thought to accounts receivable tracking software that can perform real-time tracking, which is SaaS. While the subscription model of many SaaS companies alleviates some traditional AR pain points, it doesn’t eliminate the need for effective AR management. The high volume of transactions and smaller ticket sizes inherent in the SaaS model present a unique challenge that can’t be efficiently managed with outdated, manual methods.
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Why is an Accounts Receivable Process Essential for SaaS?
“Days Sales Outstanding (DSO)” is an essential term for SaaS companies. It measures how slowly or quickly companies get paid for the SaaS they sell on credit. Typically, SaaS companies have longer days of sales outstanding (DSO) than other businesses, meaning they must wait longer to receive payment for their services. However, implementing accounts receivable tracking software helps them achieve this process. This software can significantly impact how things run through accounts receivable tracking software. In this post, we’ll cover; Benefits of Real-Time Account Receivable Tracking in SaaSHow can businesses effectively track accounts receivable using methods and software?
Managing accounts receivable is very important for SaaS businesses as their revenue largely depends on selling software as a service they provide as a subscription on credit. Managing thousands of subscriptions every day is a whole task, and if that is managed manually with old conventional methods. It might produce delays, errors, and unwanted hurdles in the way of smooth accounts receivables. On the contrary, what if businesses can track accounts receivable by combining automation tools and structured methods? That will be helpful, right?What does an Accounts Receivable Tracking Software do?
An automated, efficient, functional, and result-generating accounts receivable tracking software will help your organization perform many tasks, including automating invoicing, payment reminders, and dunning processes, reducing the reliance on manual spreadsheets. One of the accounts receivable tracking software’s prominent features is real-time tracking, allowing businesses to monitor outstanding payments, customer payment histories, and aging receivables.How Real-Time Accounts Receivable Tracking Software Benefits SaaS
Enhances Cash Flow Management
An applicable accounts receivable tracking software performs multiple tasks that are impossible to handle manually. This software helps you make more informed decisions. First, it automates the invoicing-generating process right after the subscription. Second, it enables automatic payment reminders to set the timeline. Third, it speeds up the payment cycle by allowing you to track and control everything. Managing cash flow with accounts receivable tracking software helps SaaS businesses identify bottlenecks for overdue payments and perform routine follow-ups, eventually reducing the time it takes to collect outstanding receivables. Accounts receivable management software also enables companies to forecast cash flow more accurately. It helps speed up the processes of preparing and sending invoices, minimize manual errors, and optimize the collections process. Consequently, accounts receivable management software ensures a steady cash inflow, improving overall liquidity and financial stability by automizing cash flow management.Stronger Client Engagement & Customer Relation
Every company demands to have stronger client engagement & customer relationships. This might be affected by the time-consuming work of collecting late or failed payments. This also affects your relationship with customers and their retention with the SaaS you provide. Finding a win-win situation for both parties should work best, but how can customer relations management be improved? Building long-term client relationships that are sustainable helps build customer relationships. Accounts receivable tracking software helps SaaS companies automate customer support experiences with seamless integration. It also gives your team the authority to focus on every customer with equal attention and develops high-touch interaction. Another highlighted feature provided by some accounts receivable tracking software platforms is the First Party Collection for improving the customer experience and giving authority to collect with the brand. They can sign up for this approach to secure their brand integrity. These platforms help them use their debt recovery resources, utilize their system like theirs, and provide customized solutions. This approach also reduces reliance on third-party collections services, gaining more control over customer interactions (and saving money).Efficient Invoice Management and Collections
The efficient accounts receivable tracking software helps with invoice management and debt collection processes. It automates the entire workflow of follow-up, payment, reminders, and collection processes. This software prioritizes overdue accounts and streamlines communication with debtors, increasing the likelihood of prompt payments. Accounts receivable tracking software uses an omnichannel approach, sending emails, letters, and text messages. Hence, by reducing manual intervention and providing real-time insights into outstanding balances, the software accelerates the collections process and improves cash flow.
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Increased Operational Efficiency
Considering automation with accounts receivable tracking software helps improve operational efficiency. This software provides endless opportunities to solve accounts receivable mandate challenges like manual data entry, complex billing models, high transaction volumes, churn management, and more.
Automatic account receivable tracking software helps overcome these challenges by providing simplified billing models, efficient transaction management, seamless integration, and scalable solutions. AR automation lends itself well to a process-based design and offers opportunities to refine and improve financial operations with timely, actionable performance data.
Scalability & Growth
Attracting and retaining new customers is becoming extremely difficult for many companies as saturation has increased in every industry. Bringing intelligent automation to your organization can help you scale for growth without adding headcount by making the most of your valuable resources. Automating financial processes eliminates repetitive, unfulfilling manual tasks and frees your AR team to focus on strategic revenue-generating work.
Scalability and growth are essential parameters for any SaaS business’s success. Accounts receivable tracking software helps eliminate challenges that might block the company’s scalability and growth.
Better Financial Insights & Reporting
Managing a company’s finances is never easy, but it can be particularly difficult in a recession. It is essential to prioritize the organization-wide search for new efficiency and cost savings. Using accounts receivable monitoring software can simplify manual processes, saving money by lowering the requirement for a large workforce.
Furthermore, this program offers thorough reporting and timely insights, enabling you to stay up to date on all financial activities and make facts-based decisions.
Compliance and Risk Management
The account receivable tracking software also helps compliance and risk management by automating adherence to accounting standards and regulatory requirements. It helps maintain detailed audit trails of all transactions, simplifying internal and external audits. The software ensures top-notch data security measures to protect sensitive financial information from unauthorized access and breaches.
Real-time monitoring provides visibility into accounts receivable activities, quickly identifying and resolving potential compliance or risk issues. Customizable alerts and notifications for compliance deadlines, overdue accounts, and policy breaches further ensure timely action and adherence.
How about CollectCo Accounts Receivable Tracking Software
If your SaaS company wants to improve efficiency, productivity, and optimization across all accounts receivable processes, CollectCo is here to help.
CollectCo is an automatic, intelligent platform that allows SaaS and other industries to manage their accounts receivable processes with automation. Adopting automation creates the conditions for long-term success by saving time, cutting expenses, and improving the overall customer experience. CollectCo offers revolutionary SaaS collections software to increase productivity, decrease past-due accounts, and streamline debt recovery activities. It has flexible plans and pricing that fit every company’s budget.
CollectCo’s automated systems enable better client interactions, more effective workflows, and quicker payments.
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