Nowadays, companies are turning to sophisticated software solutions to automate their financial processes and reduce time-consuming tasks and manual errors.
Microsoft Dynamics 365 Finance is one system at the forefront of this transformation, with powerful automation features that revolutionize how businesses manage their accounts receivable.
This article will explore various Microsoft Dynamics 365 Finance automation functionalities that impact AR and the benefits they yield.
What is Microsoft Dynamics 365 Finance?
Microsoft Dynamics 365 Finance is a robust enterprise resource planning (ERP) solution designed to streamline and automate financial operations.
Microsoft Dynamics 365 Finance is a cloud-based platform that supports businesses in managing their global financial systems, ensuring they comply with accounting standards while offering real-time insights into their performance. It also assists in minimizing manual processes, specifically involving accounts receivable (AR) and accounts payable (AP), to encourage more time savings and eliminate errors.
Integrations with other Microsoft products further extend its capabilities, allowing businesses to adopt a unified approach to financial operations.
By leveraging the full potential of Microsoft Dynamics 365 Finance, companies can enhance financial processes, economic performance, and operational efficiency.
Before diving into how Dynamics 365 optimizes receivables, the following section will provide a quick overview of what AR is and how it’s managed.
What is accounts receivable?
Accounts receivable refers to the money customers owe a business for goods and services that have been delivered but haven't been paid for yet. It represents outstanding invoices or debts the company expects to receive within a specific period.
Typically, AR payments are expected within a defined period, ranging from a few days to up to a year, depending on the agreed-upon terms.
AR plays a vital role in a business’s balance sheet, representing the credit extended to clients for goods or services provided. Accounts receivable is considered an asset because it's anticipated to be converted into cash within the accounting period.
AR management involves issuing invoices to customers, tracking received payments, and following up on outstanding debts to ensure they’re collected in a timely manner. It also includes recording financial transactions related to sales.
Accounts receivable is essential for a company’s cash flow, as delays or inefficiencies in collecting payments can significantly affect a business’s liquidity and financial health.
Now that you know the ins and outs of AR, it’s important to understand how automation can improve these operations.
AR automation features in Microsoft Dynamics 366 Finance
Microsoft Dynamics 365 Finance automation transforms how businesses manage their financial operations, especially regarding AR.
With the emergence of digital technology and software tools and the need to adapt to economic pressures, companies are looking to automation to accelerate operations, improve accuracy, and boost their overall financial performance.
Here are six top AR features to automate your Dynamics 365 Finance system:
Automated invoicing
Collections management
Customer payment portals
Credit management
Reporting and analytics
Dispute management
Automated invoicing
Automated invoicing minimizes the time and errors associated with manual invoice processing. Through this automation, Dynamics 365 users can create, send, and track invoices directly inside their system with minimal human intervention.
This process integrates with sales and delivery systems to ensure that the invoicing system automatically generates an invoice once a sale is completed or service is provided. The invoice captures all relevant details, including customer information, quantities, product or service descriptions, and payment terms.
With automated invoicing, your business can save valuable time, improve payment accuracy, and speed up its billing cycle to generate more cash flow.
Collections management
Collections management refers to the practices and procedures used to track and collect payments from customers. AR automation in Dynamics 365 enhances this aspect by providing tools that organize outstanding invoices and automate the prioritization of collection activities.
With automated payment collections in Dynamics 365 Finance, you can automatically send payment reminders to customers with overdue invoices, and staff can be alerted to follow up on the highest priority accounts first.
Customer payment portals
Customer payment portals are secure online platforms integrated into Microsoft Dynamics 365, which allow customers to view their invoices and make payments directly.
This eliminates the need for manual processing of checks, cash, or bank transfers, reducing the time and effort required to collect payments. Once a customer makes a payment through the portal, the system automatically updates the company’s records, reconciles the payment with the corresponding invoice, and reduces the outstanding balance.
This automation speeds up the payment cycle, improves cash flow, and minimizes errors in record-keeping and payment tracking.
Credit management
Credit management within Microsoft Dynamics 365 involves assessing the creditworthiness of customers and managing credit limits and terms accordingly.
Automated credit management helps businesses minimize risk by setting up rules and controls that automatically determine appropriate credit limits based on customer credit scores and payment histories.
Dynamics 365’s AR automation provides real-time visibility into customer accounts, enabling proactive credit limit adjustments and avoiding extending excessive credit to high-risk customers.
Reporting and analytics
AR automation in Dynamics 365 Finance enables businesses to generate real-time financial records and analyze key performance indicators (KPIs), significantly enhancing reporting and analytics and producing detailed insights into financial health.
With advanced analytics, financial teams can predict cash flow trends, identify and eliminate potential risks, and make data-driven decisions to optimize AR operations.
Users can access interactive dashboards and receive automated reports tailored to specific roles and requirements, all of which support a strategic approach to financial management.
By using historical data and payment patterns, Dynamics 365 helps improve collections efficiency, reduce days sales outstanding (DSO), and maintain positive customer relationships.
Dispute management
Dispute management involves handling disagreements or discrepancies associated with customer invoices. AR automation in Microsoft Dynamics 365 optimizes this process by systematically recording, tracking, and resolving invoice disputes.
Automated workflows can alert relevant stakeholders, track the progress of dispute resolution, and maintain a history of communication for each case. It can also help identify recurring issues that may point to broader systematic problems, thus improving business operations and user experience.
Thanks to these Dynamics 365 Finance payment features, numerous benefits of accounts receivable automation can be applied to your company.
9 benefits of accounts receivable automation in Dynamics 365
Understanding the benefits of automation of accounts receivable processes in Microsoft Dynamics 365 is crucial for businesses looking to optimize their customer payments to yield more long-term success.
Here are nine of the top benefits of AR automation in Microsoft Dynamics:
Reduced manual errors: Manual data entry is a significant source of errors in AR processes. With automation in Dynamics 365, data is entered into the system only once, and then it flows automatically through the AR cycle, reducing the potential for errors. This leads to increased accuracy in invoices, payment processing, and financial reports, ensuring the integrity of your financial statements.
Increased efficiency: Automating repetitive AR tasks can free up valuable time for finance professionals to redirect focus to more strategic activities, such as analyzing payment trends or providing additional resources for customer engagement, thereby improving overall productivity.
Improved cash flow management: AR automation in Dynamics 365 enables real-time insights into payment statuses and cash flow predictions. It also allows for automated payment reminders and simplified electronic payment processes to accelerate collections and generate more cash flow.
Enhanced customer experience: Timely and accurate invoicing, consistent communication on payment terms, and smooth dispute management contribute to a positive customer experience. Thus, automated AR within Dynamics 365 can pave the way for stronger relationships and retention by delivering prompt service and accurate operations.
Better compliance and documentation: AR automation in Dynamics 365 strengthens compliance with Payment Card Industry Data Security Standards and other regulations and provides detailed financial records and documentation through automated audit trails and approval processes.
Cost savings: With fewer manual operations thanks to automated AR in Dynamics 365 Finance, businesses can significantly lower costs. Additionally, automation reduces the need for paper-based systems and storage and enables more effective AR management, which can reduce labor costs associated with manual processes.
Scalability: As businesses scale, transaction volumes typically increase. Dynamics 365 AR automation caters to this by offering scalable solutions to handle more customer accounts and transactions to match your company's growth without proportional increases in staff or resources.
Reduced DSO: Integrating automated AR tools in Dynamics 365 Finance can mitigate or eliminate DSO by accelerating invoicing and payment collections operations. Faster invoice delivery and improved follow-up processes can lead to quicker customer payments, thus enhancing the company’s ability to manage and reinvest funds.
Integrated analytics and reporting: With robust AR software, Microsoft Dynamics 365 Finance can produce advanced analytics and reporting functionality that gathers data from automation tools. Businesses can access real-time data and generate comprehensive reports that provide actionable insights into financial performance, KPIs, and customer behaviors for more strategic decision-making.
Now that you have a better picture of the numerous benefits generated via the automation of accounts receivable in Dynamics 365, your company can evaluate third-party payment solutions like EBizCharge to yield these benefits and many others.
Optimize your payment experience in Microsoft Dynamics 365 Finance with EBizCharge (H2)
The EBizCharge for Microsoft Dynamics 365 Finance payment integration improves financial performance by integrating a secure, user-friendly payment processing solution directly into Microsoft Dynamics.
EBizCharge enables merchants to seamlessly and safely accept credit and debit cards and ACH/eChecks inside Dynamics 365 and provides a robust suite of payment features. Some of its most notable tools include customer portal payments, auto pay, secure click-to-pay email links, recurring billing, full PCI compliance, and advanced security.
EBizCharge automates invoice payment collections, making it easy for customers to pay via an online self-service portal. It also automatically posts payments, updates records, and reconciles transactions, reducing manual data entry and errors. The integration provides real-time payment tracking and reporting, which enhances visibility into cash flow and simplifies the overall accounts receivable process.
Thanks to the powerful accounts receivable software EBizCharge provides, Dynamics 365 users have access to top-rated payment processing automation, real-time financial insights, automated reconciliation, and robust reporting tools to transform their customer payment collections and overall efficiency.