Business Process Management

The Importance of Workflow in Automating Billing Processes

January 01, 2024

Depending on your needs, workflow can be simple or it can be extremely complex. However, one thing is certain – when it comes to workflow automation, there are some misconceptions. Take for instance workflow versus billing process management (BPM).

While the terms are frequently used interchangeably and both optimize and streamline repetitive tasks and processes, workflow is considered a component of BPM. BPM, on the other hand, is a broad and dynamic discipline that can consist of multiple workflows.

Companies can use workflow automation software to replace paper-based and manual processes and tightly integrate it with other business systems. This creates an ecosystem where tasks are triggered automatically across people, technology, and data.

Workflow automation relies on predetermined rule-based logic and begins a series of tasks, in a particular order. Streamlining the process reduces manual effort, decreases errors, and leads to faster and more consistent outcomes.

Automated workflow is used across some of the most common departments companies rely on like marketing, sales, customer service, HR, IT system management, operations, and finance. We’ll focus on financial functions by looking at the steps in the billing process and how workflow automation can play a significant role.

How Workflow Automation Simplifies and Streamlines Billing Processes

A proper billing process is critical for cash flow, regardless of your industry or business size. As one of the more complex processes your business handles, billing encompasses everything from creating invoices and tracking payments through following up on outstanding balances to revenue recognition and collections. Here are the key steps in the billing process, followed by how workflow automation can optimize the process.

1) Capture Transaction Data

Gather all necessary information such as products or services provided, quantity, pricing, discounts, shipping costs, etc.

2) Create the Invoice

Aside from basics like your business name, contact information and logo, the invoice should contain these 10 things.

  • A unique invoice number
  • Invoice date
  • Customer information
  • Description of products/services rendered
  • Price and quantity of each product or service delivered
  • Subtotal plus applicable taxes and discounts
  • Total amount due
  • Payment due date
  • Options on how to make the payment
  • Payment terms

3) Review and Approve the Invoice

Authorized personnel review the invoice and approve it when ready.

4) Send the Invoice

After creating and approving the invoice, you send it to the customer via mail, email or a customer portal.

5) Receive the Payment

Enter the payment into the AR system to allocate funds to the invoice, then reconcile the AR ledger.

6) Recognize Revenue

You can then recognize revenue in compliance with ASC 606 and IFRS 15 regulations.

7) Follow up on Delinquent Payments

Send notifications/make calls when outstanding debt reaches predetermined thresholds.

Workflow enables you to automate many of the above billing steps, expediting the process and reducing manual effort and errors. For instance, once a sale is made, data like the customer’s billing address and payment information is entered in the appropriate systems, making it available for automatic invoice generation. Once payment is received, it is electronically collected and automatically entered, allocated, and reconciled. For past due invoices, dunning letters and late payment notifications are automatically issued and escalation processes are automatically triggered.

Why You Need Workflow Automation

Regardless of the departmental function, workflow automation provides numerous benefits, including:

Eliminates Redundancy: When multiple personnel or departments handle the same tasks, efficiency suffers and delays occur. Workflow automation detects and removes redundant and unnecessary tasks.

Improved Communication: Manual efforts often result in miscommunication regarding task completion, or even non-communication around task completion and if next steps are needed. By automating workflow tasks, information is seamlessly shared, ensuring collaboration – improving productivity, quality of work and even employee morale.

Increased Accountability: Improved communication provides additional benefits such as enhanced accountability. With a clearly defined, the entire team knows what tasks are completed, which specific tasks are next and their deadlines.

Measures Performance: With automated workflow, performance is easily and accurately monitored and measured at predetermined intervals. This helps detect workflow faults and provides the ability to quickly improve the process.

Provides Process Insights: Workflow automation provides insights into the entire process and the staff involved. Organizations then better understand how the data is flowing through the company and the impacts on decision making.

In a nutshell, workflow automation offers clear benefits for your organization. Once implemented you’ll discover:

  • Project activities are organized
  • Clear expectations are set
  • Tracks task progress
  • Improves efficiency
  • Provides for consistent task execution
  • Reduces bottlenecks
  • Provides better visibility into tasks
  • Enhances team collaboration
  • Improves the customer experience

And these benefits are just the tip of the iceberg. For a comprehensive list of the benefits you’ll receive by automating billing processes, check out our blog – 10 Ways Workflow Automation Software Improves Business Growth.

Automate Billing Processes and Cut Revenue Leakage

Billing automation delivers the flexibility that every company requires, transforming manual processes into highly intelligent and intuitive systems that can easily be modified to meet changing market and customer demands. Although all workflow engines aren’t created equal, workflow that is an integral component of the billing platform responds to today’s need for greater business agility. Workflow automation helps simplify complex processes, dramatically reduces operating expenses, provides the means to scale without adding staff, and decreases revenue leakage.

Whether you’re managing complex, multi-year contracts or converting manual processes, BillingPlatform provides built-in workflows for billing automation to streamline the financial close process, reduce errors, and maximize efficiency. Our workflow engine is fully integrated with every aspect of the application, enabling you to set up and orchestrate billing automation workflows that involve multiple steps – all with a simple point-and-click interface.

Are you ready to say goodbye to manual and error riddled billing processes and hello to a billing automation solution that will give you the flexibility to take your business to the next level? Selecting a billing solution that supports your automation needs doesn’t have to be challenging. So we put together the Comprehensive Guide to Automated Billing Processes, download it today.

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