Even though not everyone may immediately realize it, most serious Filipino entrepreneurs do implement some type of accounts receivable monitoring system. Accounts receivable monitoring systems we’re all familiar with include “listahan” at the local sari-sari store, a well-used notebook, and text message threads on a designated business phone.
While we often think of these rudimentary solutions as something exclusively used by microbusinesses, many Filipino SMEs may still be using a version of these manual systems, albeit on a file on a computer, if the system is computerized at all. While they may be sufficient for preventing the loss of income due to a simple memory lapse, the fact is that any manual system is prone to error and becomes more difficult to scale as the enterprise grows.
For this reason, any enterprise, regardless of the size and industry, should consider updating their accounts receivable systems to a modernized version with cloud storage cross-platform functionality. Here are some immediate benefits from doing so.
1.) Better data security
Data that is kept in one place, whether it’s on a single phone, notebook, or computer, is at serious risk of loss or compromise. It can be all too easy to misplace or outright lose your data if it’s all contained in one cellphone or notebook. Computers can also be subject to hardware failure, especially in hard drives which tend to have a limited and erratic lifespan. Natural and manmade calamities such as fires and floods can also destroy your records, adding to the cost of rebuilding your business, should the worst happen.
Modern accounts receivable monitoring systems can help prevent all these issues by providing the option for secure cloud storage. Cloud storage tends to be more secure than onsite solutions, as the maintenance and upgrade of these systems tend to be far more regular than is possible with onsite solutions. Most cloud storage solutions also feature multiple redundancies that make a catastrophic data loss practically impossible.
2.) Access your data anywhere
Another perk of having a cloud-based accounts receivable monitoring system is that it allows you the ability to look at critical data away from your workplace. So long as you have a secure internet connection, you can safely view the state of your receivables from any suitable device. This means that you and the other people in your team that need to handle accounts receivables data no longer have to be in a specific physical location to work. This allows you and your team flexibility when it comes to using accounts receivable data.
3.) Advanced data modeling and forecasting
Many businesses rely on business models that require precise forecasting of when accounts receivables are likely to be paid. If your business model depends on customers buying on credit, you will want a system that allows you to better predict their payment patterns and behavior.
Newer accounts receivable monitoring systems can use historical data to help predict the behavior of different types of customers. This can be extremely valuable for developing your marketing so that you can sell to more customers who are less of a risk to your business.
4.) Better integration with sales and marketing
New systems allow you to link your accounts receivables data to marketing automation software or an enterprise resource management (ERP) suite. This allows for nearly infinite possibilities for automating your collections and marketing. One common automation scenario is sending customers reminder emails and texts when it’s close to their due date.
That alone is already a compelling reason to upgrade both your accounts receivable and ERP systems but there are other potentially useful automation workflows as well. For example, you can create a workflow that automatically gives incentives to customers that have paid early. You can also use the accounts receivable data to send them ads and promos for other products they are likely to be interested in, based on their previous behavior.
5.) Reduced workforce requirements and overhead
Newer accounts receivable monitoring systems can help you reduce the size of your collections teams and help them do more with less. The timelier reminders and more accurate tracking mean customers are less likely to overlook or forget their obligations.
This means that when you do send your collections teams out, they are much more likely to be doing necessary collections-related work, rather than just reminding customers of payables that are past due. This means that you can send out collectors less often, which means fewer transportation expenses are incurred.
It’s not just medium or large-scale businesses that need a good account receivable management system. Even small and microbusinesses can directly benefit from the multiplier effects offered by a solid and dependable system. While the initial cost might sometimes be difficult for a small enterprise to justify, the scalability, time and labor savings, and reduced overhead costs make these systems a must for anyone who wants to take their business further than they ever imagined.