How Accountants’ AR Builds A Better Client Experience

Manual accounts receivable (AR) processes are a headache for any administrative professional.

In the accounting profession, manually having to determine the fiscal value of services provided, and creating physical documents to bill clients, is a significant use of valuable time that could otherwise be spent on driving revenue for the firm.

Not only do legacy AR processes create inefficiencies for accountants and their organizations, but according to Anduin Co-founders Justin Adams and Pat Morrell, they are also adding pain to the experience of accountants’ own clients. Speaking with PYMNTS, Adams, who is also CEO of Anduin, and Morrell, vice president of Sales, discussed how automation can support healthier cash flow for accounting firms, and explored the ways technologies like machine learning (ML) can drive value even further for both accountants and their clients.

The Customer Experience

Today, many accountants continue to rely on outdated processes to create lackluster invoices for their customers. As Morrell explained, this process is a huge time-suck for accountants that should be focusing on value-added tasks. Plus, he noted, the manual nature of generating invoices means bills are often sent weeks or even months to a customer after services are actually delivered, causing payment delays.

But this environment doesn’t just mean that accounting firms’ AR operations are facing friction. Indeed, Morrell and Adams said, non-optimal AR workflows are adding friction to accountants’ own clients as well.

“It’s a very painful experience from a customer perspective,” said Adams, pointing to the process of having to manually mail in checks or access separate online interfaces to enter invoice and credit card information to pay bills. “There is a lot of friction in that process.”

Another key challenge from the client’s perspective, added Morrell, is that because accounting firms take so long to actually send an invoice, there is a major disconnect that prevents customers from understanding what they’re actually paying for. While the monetary cost of services may be presented on an invoice, an understanding of the value delivered by an accountant isn’t typically conveyed when bills are presented in such outdated ways.

Combined, this experience can actually lead to customers delaying payment even further, leading to cash flow constraints for accounting firms.

Driving Value Through Machine Learning

Digitization is key to optimizing the AR process, enabling automation to cut the time it takes for firms to generate and send bills, while allowing seamless, one-click payment experiences for the client. Yet because the AR process can have such a profound impact on the customer experience, there is opportunity for technology to go further.

For Anduin, that means deploying ML and artificial intelligence (AI) to connect accountants and their clients to meaningful, predictable insights.

ML can automatically create a dynamic billing environment in which the cost of services provided is calculated based on the kind of project or job performed, the experience of a particular accountant on that project, and other factors, enabling clients to gain a more accurate view of the value delivered.

Morrell also explained that ML allows for both automated and personalized payment reminders — with support for email, text and phone calls delivered at certain times — based on the unique characteristics and behaviors of a particular client.

Accountants, meanwhile, benefit from not only not having to send out those reminders manually, but to optimize the collection process to accelerate payments. ML is also used to analyze the payment behavior of clients and deliver predictions as to what a customer will pay and when, allowing accounting firms to access accurate cash flow and days sales outstanding (DSO) forecasts.

The accounting industry may not necessarily be known for modernization, and indeed, paper checks remain commonplace in the industry. But the pandemic has accelerated digital transformation that was inevitable for the sector anyway, said Morrell, who said that the accounting profession had quickly recognized the value of digitization to save time as well as support a virtual workforce.

Adams noted that the sector is making progress, but there is still a long way to go.

“The days of managing partners buying into the physical lockbox, counting checks and trying to deposit them are waning,” he said. “We have some clients that have doubled their digital payments over the last six months, but even then, it’s gone from 10 percent to 20 percent of payments being electronic… The macro trend is moving this way, and accounting firms that don’t keep up are going to be left behind.”