Discussions about an impending economic downturn, whether a gentle drizzle or a torrential downpour, can be stressful for all business leaders. Whatever happens, you should plan ahead of time to mitigate the worst consequences for your business.

As a result of the recent economic volatility, businesses are being more cautious about how they manage their cash. Accounts receivable teams would benefit from focusing on improving cash flow and strengthening their payment process during these difficult times.

There are numerous ways for AR managers to ‘recession-proof’ their departments, including increasing payment collection, lowering processing costs, automating manual tasks, and, in some cases, monetizing the payment process. However, automation is one of the most important processes you can implement to increase efficiency.

Automating core Account Receivable functions eliminates the risk of human error and reduces your DSO, giving your company a more robust bottom line. AR automation aids in critical billing and collections tasks by eliminating time-consuming, manual tasks. Your accounts receivable becomes more efficient, lowering your DSO with an automated, faster, and more reliable billing and collections process.

Furthermore, your finance team can automatically post transactions to general and AR ledgers with accurate tax calculations for each invoice, enabling fast and precise tax processing and billing. AR automation enables finance teams to create and send digital invoices while providing multiple payment options for more manageable payments.

Digitizing your AR process can increase collection rates, reduce late payments, and eliminate more than half of the repetitive tasks that consume your team’s time and resources. The more you can improve your cash flow by streamlining your operations, the better.

While each company’s AR process will be slightly different, these essential functions should always be automated.

There is no need for manual invoice creation and delivery. It is repetitive, boring, and the most common source of human input error. Automation allows you to eliminate human error and streamline the invoice process to completion in just a few clicks.

Your company should have a strategy to track and prevent late payments or defaults. Some businesses struggle to evaluate and track their customers’ credit. Automation simplifies the process and can automatically send customers reminders about past-due payments and outstanding balances.

Reconciliation refers to comparing the number of unpaid customer billings to the total amount of accounts receivable. This is a necessary procedure because it ensures that your company is not being taken advantage of and that all outstanding invoices and debts are paid in total—automation searches ledger and invoice records to determine what has and hasn’t been paid.

Early payment discounts can be challenging to track because each vendor and customer has a different rate. Automation relieves the finance team of the burden of remembering and implementing any special pricing, ensuring all discounts are processed correctly, increasing customer satisfaction, and providing you get paid the amount you deserve.

Tracking payments allows your company to determine which invoices have and have not been paid. Manually tracking payments due takes time, and managing and organizing each invoice quickly becomes complicated. Automation handles the process for you. It can send reminders to past-due clients.

Recessions are an unavoidable element of the business cycle. It is a significant decline in economic activity, resulting in lower GDP, real income, employment, industrial production, and wholesale-retail sales. Recessions end when the economy returns to expansion, but this isn’t easy to predict.

Most businesses suffer during recessions, but you can take steps to ensure your company emerges stronger. Successful businesses develop skills and processes that help them survive the slow period and make them more efficient and profitable when the economy recovers.

AR Process automation effectively ensures you are recession-proof because it reduces overhead and labor costs by automating critical repetitive tasks, reducing human error, and improving quality, consistency, control, and traceability.

In recent years, automation has transformed what accounting teams can do, making it easier to close the books and complete more work with fewer resources.

When the AR process is automated, executives can analyze data and cash flow in real time and make actionable financial management decisions that drive bottom-line growth and help the business scale.