Table of Contents
- What is accounts receivable automation?
- Why automate accounts receivable? The key benefits
- How to successfully implement AR automation
- Future-proof your AR strategy with Paystand
Key Takeaways
- Traditional AR methods are inefficient and prone to errors, making automation necessary for improved business performance.
- AR automation removes repetitive tasks, allowing teams to focus on strategic goals that drive growth and optimize cash flow.
- AR automation goes beyond digitizing existing processes; it reimagines workflows to improve efficiency and reduce manual intervention.
- The future of AR lies in automation, which can unlock efficiency, reduce costs, and enable better financial decision-making.
Accounts receivable (AR) teams are often burdened with manual processes that slow them down, introduce costly errors, and create inefficiencies across the business. From data entry mistakes to lost invoices and compliance issues, traditional AR methods are simply unsustainable in today’s fast-paced financial environment.
At the same time, some finance professionals fear automation may replace human roles. However, the reality is the opposite—AR automation is not about replacing jobs but about transforming them. Automation eliminates repetitive, low-value tasks and empowers AR teams to focus on strategic initiatives that drive growth, optimize cash flow, and strengthen customer relationships.
The challenges in accounts receivable management are clear:
- Time constraints: CFOs and finance teams spend up to 90% of their time on financial close, leaving little room for analysis and strategic decision-making.
- Payment delays: Businesses across industries struggle to get paid on time, with over 10% of invoices going unpaid for 90+ days.
- Operational inefficiencies: Manual invoicing, collections, and reconciliation drain resources without guaranteeing faster payments or reduced errors.
If AR teams continue to rely on outdated processes, they risk falling behind competitors who embrace automation to streamline operations, reduce costs, and gain real-time visibility into their cash flow.
What Is Accounts Receivable Automation?
Accounts receivable automation uses technology to streamline and optimize the AR process—from invoicing and payment collection to reconciliation and reporting. However, automation isn’t just about digitizing an existing process. It’s about reimagining AR workflows to eliminate inefficiencies and create a seamless experience for finance teams and customers.
Many businesses assume that an ERP system, such as NetSuite, or Sage Intacct, is enough to automate their AR processes. While these systems can improve data management, they still require manual intervention for payment processing and reconciliation tasks.
In contrast, AR automation software goes beyond simple digitization. It automates entire workflows, reducing the need for human oversight. Once configured, an AR automation solution should require minimal maintenance while significantly improving efficiency.
What Can Be Automated?
A robust AR automation system can handle:
- Invoice generation and delivery: Customized, scheduled, and automatically sent to customers.
- Collections and follow-ups: Automated reminders, escalation processes, and personalized outreach.
- Payment processing: Seamless digital payment options, real-time tracking, and fraud prevention.
- Reconciliation: Automated matching of payments to invoices with minimal manual effort.
- Receipt issuance and reporting: Instant customer confirmation and data-driven insights for finance teams.
By automating these core functions, businesses can reduce errors, accelerate cash flow, and save time for more strategic financial planning.
Why Automate Accounts Receivable? The Key Benefits
AR automation isn’t just about convenience—it delivers measurable financial and operational benefits. Here’s how:
1. Get Paid Faster
Businesses implementing AR automation reduce DSO by an average of 23 days. The reason? Automated reminders, easy digital payment options, and proactive follow-ups encourage customers to settle invoices promptly.
2. Reduce Operational Costs
Processing invoices manually is expensive. From labor costs to printing and mailing fees, businesses spend thousands on AR tasks that could be fully automated. In fact, AR automation can cut invoice processing costs by up to 80%, allowing companies to reallocate resources to higher-value initiatives.
3. Improve Cash Flow Visibility
With real-time tracking and reporting, AR automation software provides instant insights into outstanding invoices, payment trends, and cash flow projections. This level of visibility enables CFOs to make data-driven decisions and optimize financial strategies.
4. Eliminate Human Errors
Invoicing or payment reconciliation mistakes can lead to delays, disputes, and compliance risks. AR automation reduces the risk of errors by ensuring accurate data entry, real-time verification, and seamless integration with other financial systems.
5. Enhance Customer Experience
A smooth AR process isn’t just beneficial for finance teams but improves customer experience. Automated billing, self-service payment portals, and flexible payment options make it easier for clients to pay on time, reducing friction and improving relationships.
How to Successfully Implement AR Automation
Adopting AR automation isn’t just about selecting software—it requires a strategic approach to ensure a smooth transition. Here are the key steps to getting started:
1. Assess Your Current Process
Before implementing automation, map out your AR workflow to identify bottlenecks and inefficiencies. Consider:
- How invoices are generated and sent
- How payment reminders are managed
- How payments are collected and reconciled
- What payment methods your customers prefer
2. Define Your Automation Goals
Clearly outline what you want to achieve with AR automation. Common objectives include:
- Reducing DSO and late payments
- Lowering transaction fees
- Improving cash flow forecasting
- Increasing team productivity
3. Select the Right AR Automation Software
Not all AR automation tools are created equal. Look for a solution that offers:
- Seamless integration with your ERP and accounting systems
- Flexible digital payment options
- Real-time reporting and analytics
- Fraud prevention features to protect transactions
4. Get Buy-In from Key Stakeholders
For a successful rollout, finance leaders, IT teams, and AR specialists must agree on the benefits of automation. To secure leadership approval, present a business case highlighting cost savings, efficiency gains, and ROI.
5. Train and Support Your AR Team
Change management is crucial when implementing automation. Provide training sessions and ongoing support to ensure a smooth transition and encourage adoption across your finance team.
Future-Proof Your AR Strategy with Paystand
Manual AR processes are no longer sustainable, and automation is the key to unlocking efficiency, accelerating payments, and optimizing cash flow management. But automation isn’t just about going digital—it’s about choosing the right solution.
Paystand redefines AR automation by eliminating transaction fees, removing manual bottlenecks, and providing real-time financial insights.
Why Leading Businesses Choose Paystand
- Eliminate costly transaction fees: Traditional payment processors charge 2–3% per transaction. Paystand replaces these outdated models with zero-fee, real-time bank payments, saving businesses thousands in unnecessary fees.
- Reduce DSO and improve cash flow: Our automated invoice-to-cash platform speeds up payment collection. Customers report up to a 60% reduction in DSO and 23 fewer days of outstanding payments.
- Streamline collections and reconciliation: Paystand automates invoice reminders, follow-ups, and payment matching, reducing the AR workload by 50% and cutting reconciliation time from days to minutes.
- Seamless ERP integration: Our cloud-based platform integrates directly with NetSuite, Sage Intacct, and other leading ERPs, ensuring a frictionless transition to automated AR.
- A secure B2B payment network: With built-in fraud prevention, bank-to-bank payment rails, and PCI-DSS compliance, Paystand ensures every transaction is secure, compliant, and efficient.
Real Companies, Real Results
- Choozle decreased Days Sales Outstanding by ⅓ in just six months
- Elenteny Imports doubled invoice volume in a year—without adding headcount
- Covetrus slashed transaction fees by 98%, unlocking millions in cost savings
AR automation isn’t just about reducing busywork—it’s a strategic shift that empowers finance teams to drive growth, enhance cash flow, and eliminate unnecessary costs.
To help you navigate the transition, we’ve created the ultimate guide to choosing the right AR automation software, Unlocking Efficiency: A Complete Guide to AR Automation Software. Download today and start your automation journey.