According to the survey report from some leading financial sources, 87 Percent businesses receive the payments exceeding the invoice data. Depending on the nature of the business, it may impact the day-to-day operations. Now, discussing on the transaction levels of hotel business, where receivables and payables play a crucial role. Though we are not in an era of manual invoice processing system. But significantly the accounts receivable could hinder the growth. Keeping track of this short aspect of accounting system will help businesses prosper in the long run. Usually, Hotel business attracts variety of guests and payment methods. All the cash, cheque, credit card payments and online transactions into one ledger and helps you streamline financial operations. We are in the very advanced stage of Hotel Accounting Systems, where automation does everything for us. So, let us explore more about the importance of accounts payable automation in this elaborative post.
Selling to customers on credit is a crucial service that can significantly boost a company’s revenue beyond cash sales. However, it also entails the challenges of managing invoices, collecting payments, and overseeing the entire process, which can become burdensome even for smaller businesses. Mismanagement in these areas can lead to cash flow issues and strain customer relationships.
That’s why businesses of all sizes are increasingly turning to accounts receivable (AR) automation. The extent of automation varies widely, affecting the average cost to process a customer invoice—ranging from $2 to $9 according to the American Productivity and Quality Center (APQC). Beyond cost efficiency, AR automation offers a range of benefits that enhance the entire AR process.
Cash Flow Management in Hotel Industry
Payment mechanism has drastically changed across diverse sectors. Particularly in the hotel industry, the front desk receives payments in the form of cash, cheques and credit card payments. A guest pays the money in upon arrival, and pays the remaining while leaving after seeking all the services, food, beverages and other recreation activities. Sometimes, the payments will be delayed if it is any corporate agreement. To look after all these transactions, Accounts Receivable Management is quite essential and modern-day software, usually comes up with all the inbuilt mechanism to accept online payments and transactions.
Key Benefits of Accounts Receivable Automation:
1.Improved Cash Flow: Accelerates the order-to-cash (OTC) cycle, ensuring faster receipt of payments, especially when integrated with front-end systems like Property Management System and inventory management. This reduction in the days sales outstanding (DSO) enhances liquidity.
2.Cost Savings: Reduces operational costs by improving efficiency and accuracy, allowing staff to focus on higher-value tasks rather than manual data processing.
3.Enhanced Customer Service: Provides timely and accurate invoicing and payment processes, improving overall guest satisfaction and minimizing disputes.
4.Advanced Security and Compliance: Ensures secure handling of sensitive customer data and compliance with regulatory requirements, crucial in today’s distributed work environments.
5.Real-Time Insights: Utilizes customizable dashboards for comprehensive monitoring of Accounts Receivables processes, enabling informed decision-making and proactive management.
6.Standardized Processes: Implements consistent workflows and automated reminders, enhancing professionalism and reducing errors associated with manual tasks.
7.Faster Payments: Facilitates quicker invoice processing and payment collection, reducing DSO and optimizing cash flow forecasting.
8.Reduced Payment Processing Costs: Significantly lowers the costs associated with invoice processing and payment collections compared to manual methods.
9.Efficiency: Streamlines operations by eliminating manual errors and improving overall productivity across the Accounts Receivables functionality.
10.Scalability: Adapts seamlessly to growing transaction volumes and business needs without compromising efficiency or accuracy.
11.Access to Real-Time Data: Provides up-to-date visibility into Accounts Receivables data, ensuring all team members work with consistent and reliable information.
AR automation is pivotal for businesses seeking to enhance financial efficiency, operational effectiveness, and guest satisfaction. By automating these critical processes, organizations can mitigate risks, improve cash flow, and maintain competitive advantage in today’s dynamic business environment.
Conclusion: Accounts Receivables is the smaller aspect of the accounting systems, but it creates everlasting impact in the entire business. All the receivables from various services should be streamlined effectively for generating weekly and monthly reports. Above all, the accounts management through advanced predictive analytics aims to provide real-time financial information. It enables the hoteliers make better decisions to enhance growth.
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