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Climate change is a real threat to the well-being of current and future generations. Governments across the globe are using different environment initiatives and policy measures in order to reduce their carbon footprint. The transition to a green economy will apply to all economic actors as well as to businesses. Business owners should think about internal processes and evaluate what changes can be done now. That will lead to lower emissions on a larger scale? One of the easiest, beneficial, and impactful changes that businesses can undertake is the automation of accounts receivable.
Despite a sustainable economy’s main goal is a cleaner environment and a greener planet, the benefits are stretching far beyond. By adopting more sustainable business practices and choosing greener production methods, the enterprises not only reduce their carbon footprint but also become more innovative. Moreover, COVID-19 has accelerated the digital revolution. The enterprises that used innovative tech-powered solutions or were swift in adapting them have managed to reduce the harm caused by the lockdowns.
Sustainability Initiatives
The European Green Deal, an EU initiative to make Europe the emission-neutral continent by 2050 highlights that besides helping the environment the deal will make European businesses more competitive, modern, and efficient. The European Commission has emphasized since 2010 that e-invoicing is the goal for the whole of Europe to become more digital, green, and competitive. The benefits of e-invoicing stretch far beyond the positive environmental impacts.
Digital invoices help to reduce errors, such as misspellings of the customer details. Also, the invoicing amounts, reduce the collection period, safe costs on paper, mailing services, and many more. Moreover, the benefits are amplified for businesses with a more international client base. The saving on postal services will help to save a lot of money. Besides, the survey prepared jointly by PYMNTS and American Express has shown that firms that use manual invoicing methods on average spend 67% more time chasing late payments.
Small Businesses Should Lead the Change
The main actors who would make a real difference are the small and medium-sized enterprises (SME). As these are the most numerous players in the economy. If you are a small or medium business owner you mistakenly might think that your company is too small to make a change. This is not correct, as the data shows that SMEs can make a significant change.
The report by the UK government shows that 96% of all enterprises in the UK were micro (below 10 employees) in 2020. The data is very similar to the global picture, as the proportion of SMEs in OECD countries is around 95%. This remarkable share of micro-enterprises shows the necessity to take action for all businesses, regardless of size. Furthermore, initiating the change especially for SMEs will bring real tangible results.
Benefits of AR Automation
Environmental Benefits
The environmental benefits of AR automation are impressive. Let’s take a look at the numbers first.
The academic research paper titled The Economics of Paper Consumption in Offices have shown that 1 ton of A4 paper (or 400 reams) leads to consumption of 24 trees, energy usage equivalent to the energy consumption of U.S. household in six months, lead to emission equivalent of a car in six months. Besides, the environment will be impacted by the production of waste, water usage, and more. To put these effects into the global perspective- on average the world uses 300 million tons of paper every year.
In the U.S. the paper consumption has increased in the past 20 years by 126%, from 92 million tons to 208 million tons. The average business paper consumption grows by 22% a year. The usage of paper invoices is not just concerning the paper. Think about the printing costs, envelops, shredding, postal costs, energy emissions by postal transport, and many more.
Business Benefits
Now, that we have discussed the environmental benefit of going paperless in the office, think about the efficiency that will come with automating your Accounts Receivables.
First, the staff will save their time by manually preparing and sending off either digital or physical invoices. With AR Automation the invoices will be sent out as soon as the sale is made. The invoice will be delivered to the customer’s email within seconds. Moreover, once the invoice is past due, the reminder will be sent out in the same efficient manner. This will not only save the time of your staff. Also, it will help them reduce the stress of chasing clients.
Automated AR also leads to fewer errors and easier accounting, as the payments will be quickly matched with the invoices and clients. Finally, the businesses that position themselves as sustainable and environmentally friendly have now more chances to attract young professionals, as these are now of the key important things Millennials and Generation Z seek in the employer.
Automate Your AR with Kolleno
It is easy to automate your accounts receivable with Kolleno. Our extension is compatible with all major accounting software that your business is already using. The AR Automation with happen seamlessly and will help your business not only decrease your Days Sales Outstanding but also will help your business to adopt sustainable business practices. Get in touch with us to automate your accounts receivable and take care of our environment.
