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Articles From Lumsden McCormick

Five Benefits - Automating the Accounting and Bookkeeping Process

While digitalization continues to take hold of the business world, the billing and collections functions for many organizations remain largely paper based. Businesses that automate the accounts receivable process may accomplish several operational and financial goals. Here are five key benefits that organizations can unlock when they “go digital.”

1. Manual Processing is Minimized; Efficiency is Maximized

Generating a paper invoice is a laborious process, especially when there’s a digital alternative. Instead of creating, printing and mailing an invoice, organizations can autogenerate electronic invoices and e-reminders for overdue payments.

This reduces the administrative burden considerably. Plus, e-billing saves on office supplies such as paper, envelopes and stamps.

2. The Payment Process is Faster

Digitalization streamlines the cash conversion cycle. The accounting department doesn’t need to spend time mailing paper invoices and late notices. Instead, staff can be reassigned from administrative tasks to value-added ones, such as budgeting, forecasting and cash management.

On the flipside, customers that pay electronically — or set up an autopay option — don’t need to waste time cutting a check. Plus, the recipient of an e-invoice may be more likely to pay quickly to capture discounts or merely remove the payment from their to-do list.

3. Customers Can Use Their Preferred Payment Method

Instead of forcing customers to issue paper checks, they can make payments using digital payment options, including credit cards, ACH or wire transfers. Businesses that sell directly to consumers may also accept payment via PayPal, Venmo or other digital payment apps. These alternatives may incur lower fees than those charged by credit card companies.

4. Customer Loyalty May Grow

Organizations that facilitate digital payment are easier to do business with. Reducing customers’ administrative burdens can, in turn, increase customer loyalty. It can also remove the potential for conflict that may result when payments go missing or arrive late.

5. The Potential for Fraud Decreases

Paper checks may be susceptible to fraud. Digitalization removes the need to store and mail paper checks, mitigating the potential for employee fraud. And because there’s no longer a need to mail checks, it prevents the interception of checks by a third party.

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Contact us for help with your accounts receivable process, bookkeeping, financial statement and tax preparation, and CFO and Controller services.

Five Benefits - Automating the Accounting and Bookkeeping Process

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Tim has a combined 27 years of experience in public and private accounting with a focus in the manufacturing industry. This includes 15 years as CFO and CEO of a commercial business and 12 years in public accounting. He has extensive experience in the areas of cost accounting including the design of policies and procedures and systems implementation. He performs a majority of the Firm’s client accounting services. His experience as a CFO and CEO brings unique insight and value to family businesses and startups, sharing his expertise with companies through the Firm’s involvement with 43North and Start-Up NY.  In 2014, Tim passed the Series 7 and 66 exams, acting as a referring advisor for Lumsden & McCormick Financial Services, LLC.

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