Nothing worries CFOs and business owners more than economic uncertainty, especially when inflation forces them to cut budgets and perform layoffs. Demand for savings comes straight from boardrooms with little choice but to find cost savings. Thus, CFOs and business owners must think strategically about spending money.
Although the latest economic forecasters can’t rule out more economic uncertainty, CFO sentiment indicates things might not be as bad as first feared. There are numerous reasons for this, but the most important ones are interest rate hikes in Canada and the United States, which are slowing economies and lowering inflation.
With good news on the horizon, large corporations and SMEs should think strategically about spending money and stay optimistic about financial outlooks. Look for cost savings that add value to financial functions and business health. For example, modern technology streamlines and automates repetitive functions, such as accounts receivable processes.
Accounts Receivable Automation and Why You Need It
All organizations that sell services and products have financial functions built into conducting business. For example, sending a bill for a purchase requires thorough follow-up procedures, from tracking invoices, including those overdue, to accepting payment and receiving and dispersing funds appropriately. However, accounts receivable automation can help organizations automate these mundane tasks involving billing and accepting payments.
Going “all paper” is the only way businesses avoid technology and automation. Unless your organization makes a point of staying offline, it will need to embrace automation as a matter of doing business. Now is the time to get familiar with digital payments, accounts receivables automation and related processes to help your company prepare for the future.
AR Automation at a Glance
Canada and the United States use separate systems for electronic funds transfers. However, the two systems are designed to work together as part of the larger trading partner status. Canada calls it Electronic Funds Transfer (EFT), while the United States calls it Automatic Clearing House (ACH). Canadian businesses that provide services and goods across the border need AR automation that works seamlessly so that no barriers exist.
Automation and reliance on advanced software packages to manage and run business functions are aspects of our economy that can’t be overlooked. In other words, using automation in some capacity is already commonplace in our professional and private lives. From automatic shipping and product refills to instant cash app payments, businesses should tap into the technology related to their business and put it to good use or risk being left behind. The benefits of accepting digital payments include the following:
- Saves time and resources
- Speeds up accounting services
- Improves customer service
- Streamlines internal business functions
- Eliminates the need for cross-border currency conversion
These are broadly defined benefits that can be expanded on. AR automation connects digital payments to business functions so CFOs and business owners can view them at a Glance and make crucial adjustments. Bottom line: digital payments help food distributors
Saves time and money: AR automation and online billing eliminate the need to track payments. Automation tracks invoices, saving time that would have otherwise been spent on making numerous calls to understand where payment is. Put simply, AR automation drastically reduces the need for manual ledger work by an accountant.
Speeds up accounting services: As CFOs know, a business’s financial function goes beyond accounts receivable. AR automation puts an organization’s entire accounting function into the digital world, so they don’t need to pay for low-wage work like manually entering numbers into a ledger.
Improves customer service: On the other end of the spectrum, customers undergo the unboxing experience. This is like making that crucial first meeting where first impressions make or break a relationship. Digital payments and AR automation help improve customer service by making the unboxing experience more enjoyable. Using any of the four types of digital payments provides an almost instant connection between the seller and the buyer.
Streamlines internal business functions: AR automation also works behind the scenes inside a business. The people running the different functions within a business benefit because they don’t do mundane work anymore. Someone who runs things, like a CFO, needs quick access to the internal financial functions so they can make adjustments.
Eliminates cross-border currency exchange: Canada shares a large border with the United States as one of Canada’s top trading partners. 2022 saw Canada participate in almost $1.3 trillion in cross-border business. With digital payment options, currency exchange happens automatically without the need to pay a broker to change the currency. Thus, with digital payment options, your food distribution business encourages cross-border trade. Transfers and exchanges automatically go into Canadian financial systems.
Bottom line: Digital payments help food distributors get paid faster. Digital payments also connect customers to buyers by automating things like cross-border currency conversion. And, because your business connects to the digital banking world, your customers have more options. Because of this instant connection, AR automation eliminates the need to chase down payments from delinquent buyers. They must pay upfront, like going to a store and buying an object.
Types of Digital Payments
Interestingly, as much as half of businesses still use paper cheques despite their high processing fees. There are a variety of reasons behind this, including that some businesses use the extra processing time to balance their financial records. The Canadian Revenue Agency recently reported that $1.4 billion in paper cheques is sitting uncashed in Canada’s coffers.
For its part, the Canadian government is taking steps to shift tax refunds and other payments to digital payments. Since 2020, Canadian citizens can look for unclaimed cheques and cash them electronically using direct deposit, one of four types of digital payments available to businesses. Others include:
- Mobile point-of-sale systems offer consumers a buying experience where they pay for something they get right away
- Contactless payment using near-field communication (NFC) technology connects payers and sellers through secure wireless connections
- Peer-to-peer payments through cash apps like Venmo can be configured to work within an SME
- Digital wallets are popular consumer payment options made possible using smartphones and credit and debit cards
By eliminating processing fees and drastically lowering processing time, digital payments will improve your accounts receivable process. Your business won’t be weighed down by unresolved accounts receivable issues because the software provides instant solutions and possible outcomes. Furthermore, using automation software helps a food distribution company manage supply chains that are under increasing pressure to optimize and find savings. Accounts receivables automation allows businesses to stay tech-literate in a world that expects quick results.
Find Hidden Revenue With Digital Payments
Business owners and CFOs face constant pressure to protect and grow wealth. If your food distribution business doesn’t accept digital payments, you could bear a 70% increase in costly manual entry costs. Chat with our team to learn more.
AR automation streamlines your food distribution firm’s accounting function by performing low-value tasks humans tire of, like entering manual entries in ledger books and tracking down late payments.
Want to learn more about restaurant accounting? Downloading our guide to Restaurant Accounting & Inventory Management.