Your business — and your billing — run on data. And the success of either of these enterprises depends on how accurate and available this critical information is. How much did a customer order? When was it delivered? How much did they pay? Was there a dispute? Did you withhold sufficient tax? Was it noted in your financial records?
The answers to the critical questions surrounding every sale you make are all stored within your back office systems, your enterprise resource planning (ERP), and accounts receivable (A/R) software. But if you have to search through multiple, isolated data silos and applications to find these details, you severely hamper the efficiency, flexibility, and responsiveness of your organization. Fortunately, with integration and automation, you can leverage this data more effectively to benefit both daily operations and future planning.
In this article, we’ll explore the advantages of integrating and automating your ERP system and accounts receivable, as well as what steps you might take to ensure that it’s done right.
What is ERP and accounts receivable automation integration?
Software integration simply describes a process where two or more applications are linked together in a way that makes it easy for them to cooperate and share data. So when integrating your ERP and A/R platforms, you are creating a unified environment that allows these tools to access, modify, and update each other’s information. At the same time, by automating this integrated framework — meaning that you offload tasks or decision-making traditionally performed by a human onto the software — you can accomplish these core, back-office processes more quickly while consuming fewer resources.
What are the benefits of ERP and accounts receivable automation integration?
As you might imagine, by getting all of your back office systems on the same page, you can capture quite a few improvements. Of course, the scope of these advantages will depend heavily on how thoroughly you integrate your platforms and which specific functions you automate. That being the case, when connecting your ERP and A/R solutions, you typically can expect to:
Boost data accuracy by removing the opportunity for human-caused errors
With accounts receivable integration and automation, you can avoid — if not eliminate — manual processes from your billing and collections efforts. The fewer times your employees touch your data, the fewer opportunities they create for a simple mistake, distraction, or oversight to corrupt your operations. At the same time, instead of having your staff rekey critical sales and financial data between systems, this information is automatically shared and faithfully updated in real-time across all relevant data stores and applications. So when you modify a customer address in your invoicing software, for example, that change shows up in your customer relationship management (CRM), shipping, and accounting systems — no additional typing required.
Stabilize cash flows while accelerating your billing and collections efforts
Manual accounts receivable processes require constant oversight and hands-on involvement from your team. But by integrating receivables with automated workflows, payment requests continue moving forward — even when no one is in the office. The system handles each step automatically, typically needing human input only for final approval. As a result, invoices are sent out much faster, and once payments are received, they’re processed, applied, and deposited within seconds.
Promote prompt payments and fewer unpaid debts
The sooner that a customer receives an invoice after the delivery of a product or service, the more likely they are to pay their debt on time — or at all. With the accelerated workflows already mentioned, your business is better positioned to reduce the risk of bad debt. At the same time, automated dunning processes help encourage faster responses by keeping any outstanding payments at the forefront of your customers’ minds.
Improve customer satisfaction by addressing disputes as they’re brought up
Mistakes happen — but when your business responds quickly, you can turn a potential crisis into a positive, relationship-building opportunity. With integrated accounts receivable systems, you can instantly access supporting documentation (such as delivery records, order forms, and receipts) when a customer raises a dispute, leading to faster, more satisfying resolutions.
Streamline compliance with consolidated reporting and data access
Automated processes tend to create a fair amount of metadata that identifies when and how various actions were taken throughout the billing process. And you’ll find that anyone involved in your compliance efforts — particularly both internal and external auditors — will be very interested in reviewing these details. Fortunately, with an integrated framework, you can compile this raw information into detailed reports rather easily.
Best practices for the successful integration of A/R automation and ERP systems
More than likely, you’ve already invested in an ERP infrastructure and are currently using it to support your day-to-day business operations. Ideally, this platform will predominantly come from a single vendor and boast a fair amount of cooperation among its internal modules, making it easy to share data throughout the enterprise. If not, as an ERP integration best practice, you’d be wise to focus on connecting these systems first.
Assuming your back office is already in good standing, feel free to begin integrating and automating your A/R systems with this existing investment. And as you get started, we here at Invoiced (a Flywire company) have some accounts receivable automation best practices that we think you should consider.
1. Look for a platform that matches both your current and future business needs
As a first step, spend some time evaluating your existing A/R processes, specifically identifying which activities drag out the invoice-to-cash (I2C) cycle and tie up your staff. Then consider what your future business plans are and how you would need to modify your billing practices to accommodate this envisioned future. Finally, explore what’s available in the A/R automation market, looking for solutions with capabilities and features that can address and overcome these challenges.
2. Prioritize flexibility since conditions on the ground can change
When selecting a platform, look for a solution that can adapt to your evolving needs. Pursue options that let you modify your automated workflows, especially as markets, business relationships, and regulations shift. Similarly, opt for a system that is compatible with a broad range of ERP platforms, in case you decide to opt for a different provider in the future. Or consider solutions that deliver open application programming interface (API) access, enabling you to surface their capabilities within your existing software.
3. Consider factors beyond just software features
One of the principal advantages that automation delivers is that it frees up the time and attention of your existing staff to focus on more strategic tasks. However, if your automated A/R solution lacks a friendly user interface (UI) or requires extensive training to manage, you undermine this critical benefit. Instead, pick an application that features an intuitive design and that requires very little knowledge to operate, maintain, or update. Even better, find a platform that comes with ongoing support and education tools designed to help you get the most out of your investment.
4. Ensure regulatory compliance with robust reporting functions
Because this integrated framework will handle sensitive customer data, financial transactions, and accounting records, it must comply with various legal guidelines governing how this information is managed, accessed, and stored. You may also need to meet additional security standards based on industry requirements, such as those contained in the Payment Card Industry Data Security Standard (PCI DSS) or the Health Insurance Portability and Accountability Act (HIPAA). Before you buy, ensure the software meets these standards and includes robust reporting tools that make it easy for you to verify compliance.
5. Leverage metrics to continually modify and improve performance
Once your solution is in place, you’d be wise to keep track of and report on the various key performance indicators (KPIs) that let you know what is and isn’t working throughout your integrated A/R and ERP systems. By monitoring these operational benchmarks over time, you can vet the success or failure of individual process changes, product launches, marketing campaigns, or other deltas. In addition, this centralized pool of data also makes it easier to leverage analytics tools and artificial intelligence (AI) to not only identify existing patterns and market trends but also more accurately predict how sales and cash flows might look like in the future.
6. Don’t neglect what integration and automation can deliver to your customers
While most A/R automation platforms will provide you with a host of benefits tied to your internal processes, you’d be wise to use these advantages to improve the payment experience for buyers as well. Look for systems that deliver a smoother, more convenient payment process, able to support a variety of payment types and payment terms. Features like self-service portals, automated reminders, or dispute tracking dashboards can empower buyers to manage payments on their own terms and in line with their own priorities.
7. Protect your business by hardening your security and anti-fraud measures
Making your data — particularly your financial data — more accessible to other systems throughout your back office will, unfortunately, also make it more vulnerable to criminals and scammers. To offset this increased risk, you’ll want to ensure that your A/R systems leverage common anti-fraud measures, such as data encryption or know your customer (KYC) functions. You might also consider purchasing a robust IT security platform for your broader network that actively monitors network intrusions, user profiles, and data access. By identifying criminal behavior more quickly, you can limit its impact on your systems, your customers, and your bottom line.
Smoothly integrate your ERP with Invoiced’s Accounts Receivable Automation Software
Wherever you are on your integration and automation journey, Invoiced can help. Our Accounts Receivable Automation platform works with most major ERP solutions, allowing you to seamlessly share payment data throughout your enterprise. And our automated invoicing and dunning workflows help ensure that you get paid quickly with very little effort — no matter how complex the billing situation.
We also deliver AI-powered cash application, comprehensive reporting functions, forecasting tools, and a self-serve customer portal where buyers can manage their own payment details, register and track disputes, and settle invoices without requiring any input from your staff. We even help you support transactions in 140 currencies across 240 countries and territories by leveraging the global payment capabilities of Flywire software.
If you’re looking for a comprehensive A/R platform that’s able to accelerate your payment cycles and play nicely with your back office, schedule a demo today.
