Accounts Receivable in Financial Management Systems

By: Ola Azzouqa

Financial software is at the core of today’s business organizations. Companies need to ensure that their financial flows are well-established and will not cause any disruption, which is why many companies are moving towards digitalization.

A financial management software system enables companies to quickly assemble financial statements and balance sheets. It eliminates long and complicated manual processes and provides the necessary data to make important business decisions. Moreover, it can break down departmental barriers and enable employees to gather data quickly from both inside and outside their departments.

Authorized employees can access information immediately after it is entered in the system, rather than waiting for data update. This reduces settlement cycle time, lowers administrative costs and frees resources so they can spend more time on value-added activities.

A comprehensive financial system consists of several modules such as General Ledger, Accounts Payable, Accounts Receivable, Cash Management, Fixed Assets, and Collections. 

Accounts Receivable (AR), an integral part of any business’ financial system, facilitates efficient management of transactions between the company and its customers. AR software allows accounting departments to notify customers in advance, generate invoices, manage payments, etc. An effective AR system streamlines customer invoicing and payment processing. It enables businesses to handle huge amounts of customer transactions daily. This reduces time, efforts, cost, and debt write-offs while increasing efficiency and profitability.

To achieve this level of automation, an AR system needs to integrate with other customer-based software in the organization such as CRM, Customer Care, and Customer Portal systems. Another key integration is with the systems of payment service providers such as payment gateways and bill payment providers. This allows businesses to directly invoice their customers, collect payments, and create the necessary reports needed for service improvement.

Benefits of Account Receivables

Save Money

Automation for accounts receivable is beneficial for reducing costs. Generating electronic invoices is cost-effective. The space needed for storing these electronic documents is virtual with more security measures compared to paper.

Save Time and Effort

Accounts receivable automation makes the process of calculations hassle-free and less time-consuming eliminating any manual errors and extra time taken to calculate or recalculate. Instead of spending hours looking for and generating customer data, accounting staff will be able to run up-to-date AR transactions effortlessly.

Customer Satisfaction

One of the main goals for all organisations is to keep their customers happy. Accounts receivable automation improves customer service. Many customers today require e-invoicing solutions to receive the invoice before the due date. The automated process establishes better communication between the customers and the company.

Accurate and Real-Time Data

An automated system eliminates errors caused by manual data entry. It provides precise mathematics and accurate payments. Manually-generated reports don’t have real-time data. Automated processes and real-time information keep you right up-to-date at all times.

Centralized Data Management

Communication between employees involved in the accounts receivable process is significantly improved. This also extends to the sales department and customer service who may be able to assist but are often isolated from the collections process.

The Accounts Receivable is a keystone system in financial management. There are a number of comprehensive financial management systems available today. ESKA Financial is a comprehensive financial management system by ESKADENIA Software. It is part of the ESKA Business Manager ERP software suite. 

ESKADENIA also offers a number of customer-focused systems including ESKA CRM, ESKA DCRM (Telecom), ESKA Customer Portal (Insurance) as well as customized portals. For payment processing software systems, check out ESKA Payment Switch and ESKA M-Wallet.