In today's fast-paced business environment, finance professionals are constantly seeking innovative solutions to enhance operational efficiency and financial health.

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One such game-changer is Accounts Receivable (AR) automation software, designed to streamline billing, invoicing, and payment tracking processes. If you're contemplating integrating AR automation into your business, understanding its potential return on investment (ROI) is crucial.

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If you’re looking to calculate your potential ROI from adopting accounts receivable (AR) automation, you’ve come to the right place.

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This blog will guide you through using Centime's free AR automation ROI calculator, providing a practical example to illustrate the potential financial benefits.

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Understanding AR Automation and Its Impact

AR automation employs technology to enhance and streamline the management of a company's incoming payments.

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This innovation encompasses tasks such as invoicing, tracking payments, and reconciling accounts with minimal manual intervention. Learn more about AR automation’s primary functions in the section below.

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Primary Functions of AR Automation

1. Generate and Distribute Invoices: AR automation can generate invoices for your team, reducing manual errors and ensuring prompt delivery to customers.

2. Manages and Tracks Collections: AR automation can automatically send payment reminders to customers, improving the efficiency of your collections and boosting cash flow.

3. Simplifies Reporting and Analytics: AR automation provides reporting tools for real-time insights into financial performance, enabling better decisions.

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By automating these critical financial operations, you can significantly transform your business’ finances, shifting from time-consuming manual processes to efficient, accurate, and scalable financial management practices.

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This transformation not only bolsters the financial health of your company but also allows your finance team to focus on strategic initiatives instead of getting bogged down by repetitive, transactional tasks.

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Benefits of AR Automation

AR automation is not merely a technological upgrade; it's a transformative force that reshapes how your business can manage its finances. It offers numerous benefits for finance teams, including: faster payment cycles, fewer errors, stronger cash flow, and better customer relations.

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Learn more about its benefits below:

Time Efficiency Gains: Streamlines processes, reducing the time you spend on manual tasks.
Fewer Errors: Minimizes the risk of human errors in invoicing and payment processing.
Stronger Cash Flow: Speeds up payment cycles, leading to better cash flow.
Better Customer Relationships: Enables personalized and timely interactions with customers, fostering stronger relationships.
Strategic Decision-Making: Provides access to real-time data, empowering you to make decisions based on current financial information.

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The Importance of Measuring ROI for AR Automation

Every investment a business makes demands some level of scrutiny, and Accounts Receivable (AR) automation is no exception. Calculating ROI for AR automation isn't just a box to tick; it’s an important step of your evaluation process and business case.

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Below, we walk through how to calculate your ROI for AR automation using Centime’s AR automation ROI calculator.

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Centime’s AR Automation ROI Calculator: A Handy Tool for Finance Professionals

Centime's AR automation ROI calculator is a user-friendly online tool designed to help you estimate the potential ROI from implementing AR automation in your business.

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This calculator takes into account various factors, such as the volume of your receivables, average payment terms, and the number of staff involved in your AR processes.

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Step-by-Step Guide to Calculating Your Potential ROI

Step 1: Access the Calculator

Start by visiting the Centime AR ROI Calculator.

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Step 2: Input Your Data

The calculator will prompt you to enter specific details about your current AR processes:

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Estimated Trailing 12 Months of Accounts Receivable: This figure represents the total value of receivables your business has had over the past year.
Average Payment Terms: These are the typical payment terms you extend to your customers, which impact how long receivables remain outstanding.
Number of Collectors: This refers to the number of staff members currently dedicated to managing and collecting receivables.

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Step 3: Analyze Your Results

Once you've inputted your data, the calculator processes the information to provide a personalized estimate of your potential ROI. This includes projected savings and efficiency gains from adopting AR automation.

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AR Automation Success Story

If you’re building an AR automation business case, you’ll need more than just projected ROI. The best way to show the value of AR automation is through a real-life example.

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JobGet, a software company that connects job seekers with employers, houses a small finance team that’s responsible for managing the tech company’s affairs. Delayed payments were one of many issues JobGet faced as a result of its manual AR system, and these problems compounded over time.

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It became apparent that something must change, which led the team to find Centime. After implementing Centime’s AR automation system, JobGet experienced a streamlined follow-up process. And the introduction of a payment portal enticed 30-50% of invited customers to use it for their payments.

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According to Patrick, a controller at JobGet. “We saw a significant reduction in the number of customers that need some sort of follow-up.”

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Final Thoughts: Calculating AR Automation ROI

Understanding the potential ROI of AR automation can significantly influence your decision-making process.

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By using Centime's AR ROI Calculator, you can gain a clearer understanding of the transformative impact AR automation can have on your financial operations.

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With insights into potential savings and efficiency improvements at your fingertips, you can make the informed decision to adopt AR automation, setting the stage for enhanced financial health and operational excellence in your business.

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Want to see AR automation in action? Create a free account and explore Centime today.

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**Deposit placement through ICS is subject to the terms, conditions, and disclosures in the applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through ICS satisfies any restrictions on its deposits. A list identifying IntraFi network banks appears at https://www.intrafi.com/network-banks. The depositor may exclude banks from eligibility to receive its funds. IntraFi and ICS are registered service marks, and IntraFi Cash Service is a service mark, of IntraFi Network LLC.

^††3.5% Annual Percentage Yield (APY) as of 11/19/24. Deposit rate may adjust to current market rate and may change daily. Fees may reduce earnings.

*Centime is not a bank and is not authorized by any federal or state agency to engage directly in core banking activities.
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*All banking products and services available through Centime are provided by FNBO and are governed by the applicable agreements and related disclosures provided to you by FNBO. Member FDIC.
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‍*While Centime facilitates traditional banking activities (such as the acceptance of deposits or extensions of credit), these services are actually provided by our banking partner, FNBO.
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*Centime may provide support services to FNBO, as permitted by applicable law, to facilitate the delivery of its bank products and services.

**Deposit placement through ICS is subject to the terms, conditions, and disclosures in the applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through ICS satisfies any restrictions on its deposits. A list identifying IntraFi network bank

How to Calculate AR Automation ROI

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