Revolutionize Your Workflow: 7 Microsoft Dynamics 365 Features for Optimizing Accounts Receivable in Microsoft Dynamics 365
Nowadays, effective accounts receivable (AR) systems are vital to maintaining healthy revenue and cash flow, fewer operational costs, good customer rapport, and long-term success for businesses to remain competitive in an evolving market.
AR systems can be paired with reliable business systems like Microsoft Dynamics 365, which provides a comprehensive tool for simplifying invoice collections.
This article will explore key challenges with traditional AR and how Microsoft Dynamics 365 payment solutions can streamline these operations to improve customer payments.
What is accounts receivable (AR)?
Accounts receivable (AR) refers to the outstanding amounts a company expects to collect from its customers for goods or services provided on credit. Considered an asset on a company’s balance sheet, it represents a legal obligation for the customer to pay within a specified time.
The AR process typically involves invoicing customers, who are then expected to fulfill these payment obligations within a set timeframe, often specified in the terms of the sale or service agreements.
AR is a bridge between the delivery of goods or services and the actual receipt of cash, making it a key area of focus for financial management and business operations.
Now that you understand how AR enables merchants to facilitate and manage payments, you can learn more about the role of Microsoft Dynamics in relation to these finances.
What is Microsoft Dynamics?
Microsoft Dynamics is a suite of enterprise resource planning (ERP) and customer relationship management (CRM) software applications designed to support and streamline multiple business processes.
Developed by Microsoft, this software integrates critical financial operations and customer data to help organizations make informed decisions, optimize workflows, and improve overall efficiency. Microsoft Dynamics 365 is the latest iteration of this suite, consisting of applications that cover various aspects of business, such as finance, sales, customer service, and supply chain management.
Before exploring how Microsoft Dynamics 365 users can improve their financial operations by accepting and managing payments within the system, it’s essential to recognize the limitations of traditional AR practices that Dynamics 365 seeks to resolve.
5 challenges of traditional AR processes
Traditional AR processes often involve several challenges that can affect the efficacy of financial operations and the stability of a business.
Here are five common challenges of traditional AR practices:
- Manual intervention and human error: A heavy reliance on manual processes in managing AR leads to an increased risk of human error and inefficiency.
- Managing credit limits: Manually maintaining appropriate credit limits for each customer can be cumbersome and error-prone.
- Inefficient tracking of overdue payments: Traditional systems may not alert finance teams quickly about overdue payments, which can affect cash flow.
- Complex payment terms: Businesses may offer different terms based on customer relationships, industry standards, or negotiated contracts, leading to a range of due dates, discount terms, and extended payment periods. These varied terms require merchants to track multiple invoices, deadlines, and conditions for each customer, making it more challenging to manage cash flow, enforce timely payments, and reconcile outstanding balances efficiently.
- Customer satisfaction: Slower transaction processing can lead to slower delivery of goods or services, negatively impacting customer experiences.
Luckily, users can leverage Dynamics 365 to optimize their AR processes for healthy cash flow management.
7 Microsoft Dynamics 365 features for optimizing AR operations
Microsoft Dynamics 365 emerges as a powerful AR tool by offering a comprehensive suite of features that streamline payment processing and improve financial operations.
With D365 credit card processing, users can benefit from implementing AR by having access to automated reminders, integrated payment solutions, flexible payment terms, effective credit limit management, and centralized customer accounts.
Automated invoicing, billing, and reminders
Microsoft Dynamics 365 allows businesses to automate their invoicing and billing processes, dramatically reducing manual intervention. This can lead to fewer errors and expedite the time from sales to payment. Dynamics 365 automatically generates invoices based on predefined criteria, sends them to customers, and records transactions in its system.
Automated reminders can prompt customers about outstanding balances without requiring manual interventions, which saves time and resources, ensures they’re regularly informed about payment dues, and can lead to timely collections and a positive impact on cash flow. By removing the need for staff to manually track and send reminders, merchants can redirect efforts into other areas that contribute to satisfaction and retention.
Integrated payment solutions
Microsoft Dynamics 365 also allows businesses to integrate third-party Business Central credit card processing solutions into its system to streamline customer payment acceptance and handling and significantly reduce transaction processing times.
Integrating reliable payment solutions directly within the Dynamics 365 environment will enable your company to offer more payment options to its customers and access robust payment collection features to enhance the user experience.
Seamless integrations can also simplify financial operations and provide valuable insights into payment patterns, which can be used to forecast cash flow more accurately.
Self-service customer portals
Self-service customer portals within Dynamics 365 empower customers to manage their accounts independently by viewing invoice history, current balances, and upcoming invoices, making payments directly in the portal. This convenience improves customer satisfaction, reduces workloads for finance teams, and accelerates payment collections.
Flexible payment terms
Flexible payment terms allow businesses to create tailored payment schedules that align with customers’ needs and financial situations, providing more options for handling payments.
With Dynamics 365 payment processing, merchants can offer different payment terms, including installment plans, extended due dates, or early payment discounts, providing more convenience for customers and encouraging timely payments.
Effective credit limit management
Credit limit management is a feature within D365 credit card processing that empowers businesses to set and manage credit limits for their customer accounts effectively. Proper management of credit limits can reduce the risk of late payments and bad debt, thus maintaining a favorable financial position.
The Dynamics 365 Finance application allows businesses to quickly review credit limits and customer financials, making it easier to comply with regulatory requirements and make informed decisions regarding customer credit approvals.
AR reporting and dashboards
Financial reporting and dashboards within Dynamics 365 deliver powerful insights into AR performance. Users can easily monitor metrics such as accounts receivable turnover, days sales outstanding (DSO) and potential bad debt, allowing businesses to make informed decisions. This data visibility helps forecast cash flow, manage credit policies, and refine collection strategies for better financial health.
Centralized customer accounts
Centralized customer accounts are an essential benefit of using Microsoft Dynamics 365 since their unified structure enables businesses to maintain updated records of customer activity, such as credit approvals, payment histories, disputes, invoices, and payments.
A clear view of a customer’s interactions improves the ability to manage these relationships, gives insight into financial operations, and enhances risk management.
Additionally, any changes or updates to customer records are instantly reflected across the system, ensuring data consistency and accuracy.
These features of Dynamics 365 facilitate the minimization of manual intervention and elevate the efficiency of finance teams, ensuring a healthy cash flow and improving AR management and overall business operations.
The following section will explore some best practices to ensure a seamless implementation for the software.
Best practices for implementing Microsoft Dynamics 365
From managing transactions to overseeing customer payments, Microsoft Dynamics 365 is a reliable ERP system that helps maintain economic stability and enhance financial operations.
To fully leverage AR in Dynamics 365, merchants should adhere to best practices focusing on precise goal setting, data centralization, automation of manual tasks, proper training, and continuous process improvement.
Define clear objectives and AR goals
Before implementing Dynamics 365, review your current AR workflows to identify inefficiencies, bottlenecks, and areas for improvement.
Define key performance indicators (KPIs) such as days sales outstanding (DSO), cash flow, and overdue invoice reduction to track improvements after implementation.
Centralize customer data and payment information
Ensure customer data, including payment terms, contracts, and credit limits, is centralized and accurate in Dynamics 365. Use built-in tools to eliminate duplicate records and ensure data quality.
Integrate payment gateways into Dynamics 365, enabling customers to pay invoices directly in this system via credit card, ACH/eCheck, or other online payment methods.
Automate invoice and payment processing
Configure Dynamics 365 to automatically generate and send invoices based on contract terms, reducing manual work and errors.
You can also set up automatic email reminders for overdue payments and customize the dunning process to escalate communications based on customer responses and payment status.
Businesses with subscription-based services can automate recurring invoices and payments to reduce manual intervention and ensure timely collections.
Train your staff
Provide tailored training sessions for AR staff, finance teams, and customer service representatives to ensure they’re familiar with the AR features in Dynamics 365 and can use them effectively.
Ensure there’s ongoing support and training as Microsoft rolls out updates and new features, ensuring that your AR processes remain optimized.
Regularly review and optimize AR processes
After the initial implementation, schedule periodic reviews to evaluate AR performance and fine-tune processes based on KPIs and feedback from your team.
Since Microsoft frequently releases updates and new functionality in Dynamics 365, you should regularly assess these new features and consider their applicability to improve your AR processes.
These strategies enable merchants to guarantee an effortless implementation and promote better customer relationships and a more secure financial environment.
Businesses can also integrate their Microsoft Dynamics 365 systems with reliable payment solutions like EBizCharge for a more comprehensive AR platform that simplifies payment processing and drives operational efficiency.
Integrate EBizCharge in Microsoft Dynamics 365 to transform your payment processing
Integrating EBizCharge in Microsoft Dynamics 365 offers robust payment software that enhances the AR process for businesses and their customers.
EBizCharge is a Microsoft-certified solution that provides efficient Dynamics 365 payment processing directly within the platform to simplify payment collections and enable businesses to minimize manual data intervention, reduce errors, and dedicate more time to strategic growth initiatives.
EBizCharge offers complimentary, built-in payment tools designed to automate payment collections and enhance efficiency, all while providing 24/7, in-house support to immediately address any issues that may arise.
Some of EBizCharge’s most notable AR tools include secure email payment links, online bill pay portals, recurring billing, mobile pay, and more, providing customers with multiple convenient payment options that improve their overall experience.
With these numerous features and functionality in mind, merchants can plug EBizCharge into their Microsoft Dynamics ERP systems to transform their AR operations, improve customer satisfaction, and strengthen their financial performance.
