Firms like yours need new ways to improve Accounts Receivable collections to ensure an optimized cash flow, especially if these challenges sound familiar:
Why does this matter? Let’s take a quick look at the benefits of improving the AR process.
Improving and optimizing your AR process opens your firm up to a world of possibility. Your finance team will have to correct fewer errors, resulting in a shortened, more accurate invoicing cycle, quicker payment approvals, and faster payments. All of these benefits work together to improve AR aging, AR Turnover (DSO), and of course, cash flow.
The impact of optimized AR isn’t just financial. With automated and streamlined operations in place, your teams operate in tandem, fostering a positive impact on company culture as well as customer experience and engagement.
So, how can your firm make all this happen? Let’s assess some strategies. At the core of these strategies is technology paving the way for collaboration, automation, and better decision-making.
Without a clear, streamlined bill review process, your invoices take longer to get out the door, your WIP (or Unbilled) increases, and it takes longer for you to realize that revenue. It’s certainly worth spending time on creating standard procedures for time entry close and bill review- and specifically engaging your Project Managers in bill review. Establishing a smooth process can increase regular engagement from Project Management, ensuring they are regular participants in the process and able to make decisions at every step of the way. Your Project Managers are closest to the work and in the best position to ensure your invoices are accurate before going out the door.
Once you’ve established standard processes, keeping stakeholder engagement up is key. Host regular refresher training for Accounting and Project Managers on process and procedures to retain adoption. Conduct mid-cycle Project Manager reviews to keep a consistent pulse and ensure that no WIP gets left behind.
Finally, measure the success of your bill review procedures with key performance indicators (KPIs) using an integrated ERP and Analytics tool. Key metrics like unbilled per PM/Project and unbilled aging are what you want to keep an eye on. Your ERP solution can go beyond just measuring these metrics and provide a single system for accounting bill review and adjustments, enable seamless online bill review, and help align your Project and Accounting teams.
Adopting an ERP solution that supports automated invoicing is one of the crucial ways to improve invoicing and AR collections. Automated invoicing means that upon review, invoices can be queued up, processed, and delivered en masse with just a few button clicks. If your team is invoicing one at a time, this is a huge first step.
An ERP will enable you to standardize invoice designs and templates, saving manual effort and time spent editing invoices in Microsoft Word while still meeting your clients’ individual needs. Automated invoicing also makes bill review a standard part of your invoicing process and encourages your PMs access invoice drafts themselves and stay in the loop.
With an automated solution, you can email your invoices and get them into the hands of your customer faster, track their engagement, and set up automated invoice reminders to keep the process moving. An online payment solution allows your customer to easily pay your invoice via ACH and credit cards all in the same system, leading to a quicker AR resolution. Your ERP should also help facilitate accepting online payments. This allows your customer to easily pay your invoice via ACH and credit cards all in the same system—even automate the receipt posting back to the GL—all leading to quicker AR resolutions.
Having a full view of AR collections is paramount to keeping tabs on AR and being strategic in your collection efforts. After all, more cash=more growth for your business. The key is using a solution that provides real-time insights into AR and financials.
With an ERP solution, your Billers and Project Managers alike can view and track aging days, invoice amounts, project and client data, and PM or business units all in one solution. As discussed above, having access to all of this helps increase PM engagement and improves the AR collections process and strategy.
Adopting an ERP solution to manage and streamline your accounting processes will help your A/E firm move away from spreadsheet chaos and outdated systems and toward a fully integrated system with powerful insights.
To hear about how M S Benbow, a multi-discipline, integrated engineering consultancy, leveraged Unanet A/E Analytics and Innovations to solve problems, gain efficiencies and put their data to work, watch our on-demand webinar: Achieving Operational Excellence with Analytics & Innovations.