Behind the seemingly easy buy-and-sell, cycle is an elaborate procedure to maintain a business. This includes timely invoicing and billing to monitor cash flow and profit. Invoicing is an important part of any business, but keeping track of multiple customer invoices can cause inaccuracies. Consolidated invoicing is the smarter approach.
What is a consolidated invoice?
Consolidated invoices are combined invoices of a specified time duration. The monthly invoices you receive from banks providing a collective record of all activity over a month’s period is a good example.
Businesses should adopt a consolidated billing system to free themselves from unnecessary tasks and streamline cash flow. Businesses can define a time frame for consolidated pay bills based on their DSO criteria. Some meal plan services charge weekly, while investors receive bond-sharing dividends twice a year.
Benefits of Consolidated invoice
Consolidated invoicing is nothing new than just all invoices put together. Then how does it help your business? Following are a few reasons that will make you shift to consolidated pay bills if you haven’t already.
Customer-friendly experience
Customers want to get what they want in the easiest way possible. Technicalities often undermine the experience. Consolidated pay bills provide them with a single payment receipt, so they don’t need to keep track of all the invoices. Refining user experience is the next step after providing the best product/service. Moreover, consolidated invoices reduce DSO because they allow customers to pay the amount simultaneously.
Manage multiple customer invoices at once
Handling multiple invoices is one thing; handling multiple invoices for multiple consumers is another. Keeping track of multiple revenue streams can get confusing, especially with a large clientele. Like an umbrella approach, consolidated billing allows you to manage cash flow from different sources. It also compartmentalizes and organizes your cash flow because you only have to refer to one thing rather than a bursting data file.
Cost-effective
Consolidated invoicing saves money on many levels. You would require less labor and less storage space, electronically or physically. Also, consolidated invoicing is less prone to error, especially when different people are working on it. Having already discussed the fact that it reduces DSO, consolidated pay bills enable a cost-effective system.
Lesser chance of missed payments
When customers are bombarded with multiple invoices, they are bound to miss a few payments. After all, they don’t have a hired accountant doing all the management. Despite a skilled team, older invoices are often archived and moved aside, leading to missed payments and the business’s loss. You can confirm that the payment has been partially or completely cleared using consolidated billing. The best part is that you will receive payments from all customers in a short time rather than throughout the working days. So you will have to address that only once over a given duration.
Batch Invoicing saves time
A single template for all invoices combined is better than a new template for every new invoice. Normal invoicing often takes up time on unnecessary yet compulsory tasks like using a standard template, formatting and other detailing. Consolidated invoicing saves time by allowing you to make entries in the same format. Following this, it also helps you keep track of previous pay bills and refer to them efficiently so that you don’t waste time locating and tallying customer history.
Better information projection and payment history
A business needs to develop its statistics and data analytics to better understand its progress. Moreover, consolidated invoicing gives you an idea about the type of customers. Customers who have availed your product/service frequently over a certain period or who have cleared their dues timely may help you decide on better bonuses for them.
How AR Automation Enhances Consolidated Invoicing?
Consolidation simplifies invoicing, and AR automation enhances it. Automating the AR process allows you to update, notify and collect payments systematically. Cadency, an AR automation software, is a reliable tool for consolidated invoicing.
Some features of Cadency that refine your consolidated billing include:
- Efficiency: It will update your invoices timely and accurately.
- Automated reminders: The software sends regular reminders to customers to keep them informed.
- Speedy processing: It can get difficult when all payments come in together, but with advanced features, Cadency can process all that without exhaustion.
- Data trends: The software has been programmed by highly skilled professionals providing all data trends like KPI, DSO, etc., with ease.
- Smooth Information flow: The multiple teams and departments can interact and coordinate simultaneously on the software.
Investing in an automated AR tool like Cadency for consolidated billing allows you to efficiently manage large datasets and big chunks of information. This speeds up, refines and enhances your AR process increasing cash flow. Coupled with the rapid digitalization of many business processes, it is imperative that AR also follows suit.
