It’s no secret that many businesses are set in their ways. These companies have relied on the same technologies, strategies, and procedures for years.
These systems have been working well enough that decision-makers haven’t yet decided to overhaul their systems to increase efficiency, productivity, and profitability.
For example, many companies have used the same approach to accounts receivable for quite some time. Each month, they rely on legacy AR systems to keep track of payments, bill customers, and process payments.
These systems can certainly handle the work, but accounting departments that use them simply can’t be as efficient as they could be if, instead, they would migrate to a modern accounting automation solution that leveraged innovative technology to streamline the entire collections process.
While companies that are still relying on legacy AR systems might not be in danger of going out of business tomorrow, there are a number of unnecessary challenges they’re forced to deal with every day that could be avoided by moving to a modern solution. With that in mind, let’s take a look at four of the most common challenges businesses that use standard AR systems face.
1. Wasted Time
AR professionals who are forced to use outdated systems aren’t anywhere near as productive as their peers who use modern solutions.
Many companies that rely on legacy systems require AR staff to jump from the ERP platform to the CRM system to their email inbox to an Excel spreadsheet and back again just to figure out a current account’s status. Compare that to companies that use modern solutions that enable accountants to track down all the information they need from a single interface.
What’s more, accounting professionals who rely on legacy systems often need to produce reports and calculate metrics by hand. Not only does this open up the possibility for human error to enter the equation, but it’s also simply not the fastest approach to work.
With a modern accounting automation solution in place, your team can free itself from much of this busywork. They can then invest that time in other revenue-generating activities.
2. Slower Payments
Even the most competent AR professionals aren’t perfect.
From time to time, your best AR professionals may forget to send out invoices on time when they’re forced to send emails manually. They may also forget to send reminders when payments are coming due and follow-up emails when payments are late.
When invoices are sent out late, payments come in late. Depending on how bad the situation gets, your cash flow can suffer tremendously.
With an automated AR solution, invoices, reminders, and follow-up emails can all be sent automatically—which accelerates payments. Further, employees don’t have to spend their time thinking about invoicing at all because the platform takes care of it for them.
3. Competitive Disadvantages
Suffice it to say that at least some of your competitors have already moved to an automated AR solution. If you are still relying on an outdated system, these competitors are simply able to move faster and more efficiently than you are.
With a new system in place, however, you’ll be able to keep pace.
On the flip side, some of your competitors are still relying on outdated systems just like you are. By moving to a automated AR solution, you can gain a competitive advantage on these slower-moving peers.
4. Frustrated Employees
Nobody likes using clunky, outdated technology—particularly when, in the age of smartphones, apps, and fast networks, we all know how fast technology should work and how intuitive it should be.
In this light, companies that force their accounting departments to rely on legacy AR systems can expect their employees to become at least a little frustrated. Depending on how bad the situation gets, this frustration can evolve into disengagement—which could lead to a toxic workplace.
By investing in a new AR solution—one that eliminates repetitive manual workflows—you will make your team happier, increasing engagement and productivity.
Just because your company may have been doing things one way for a long time doesn’t mean that’s the most effective path forward.
If you’re still running your AR department on a legacy system, it’s time to consider modernizing. Move to a new platform, and your cash flow, productivity, and employee happiness metrics will improve—while your company gains a competitive advantage.
Sound too good to be true? It’s not. Get in touch today to learn more.