• Bojana Miletic, Solutions Specialist at BlueSnap


• 22.11.2022 12:15 pm
#Automation

As the pound plummets, energy bills soar and the UK dips into recession, businesses across every sector are looking to their books to see where they can save. As executives pore over their invoices and expenses, there may be hidden or untapped opportunity in looking at their accounts receivable process.

Accounts receivable (AR) automation is technology that automates AR processes, so teams aren’t wasting precious time and labour on unnecessarily manual tasks. It helps businesses get paid more quickly, thus improving cash flow and the ability to for better forecasting and planning.   Additionally, these enhanced processes boost productivity and overall customer satisfactions.  And it’s a rapidly growing market, expected to double in value to $3 billion by 2024.

But too many businesses are still failing to reap its benefits and are holding back their growth. A new research report titled “The Current State of AR, Automation”, found that nearly half (49%) of global businesses are still using legacy AR processes. There are several barriers to adoption but key among them is a lack of understanding: 71% of business executives don’t understand what AR automation is and how it can create positive cashflow. 

Innovation in any industry is always met with roadblocks because of the fear of the unknown, but this reluctance to embrace automation is now doing more harm than good for businesses. At a time when cutting costs and increasing cash flow is more important than ever, companies can’t afford to turn their back on processes that will streamline and optimise their work.

It’s time to leave legacy AR behind

This new report found that 49.5% of businesses' current AR processing was either completely or mostly manual. Fragmented automation can be almost as damaging as none at all, as companies are missing out on vital streamlining opportunities and the chance to meet their payment deadlines, invoicing targets and keep the end customer satisfied.

To maximise the benefit of automation, companies need to step away from legacy processes, retire manual payment orchestration and embrace full automation. Our survey results found that 89% of businesses that have automated AR processes are getting paid within their agreed payment terms or faster, making cash flow management easier and minimising financial losses due to slow, laborious processing.

What’s stopping businesses automating?

All businesses have their own unique approach to the AR processes, and making a full switch to automation may be met with scepticism or even fear. When asked, 71% of executives confirmed that a lack of understanding over what technology is available topped the reasons for not implementing more automation. Other common reasons include concerns about negative impacts on customers (59%), resistance to change (58%) and worries about automation taking the human element out of the business (47%).

Typical AR management is manual and time-consuming. While this may seem inefficient to new employees and technological innovators, for many people, it is all that they know. Changing to processes that minimise the human factor can be daunting, therefore, it is important for stakeholders and decision-makers to demonstrate clearly why AR automation is the best option as we advance. We often hear from our customers that fully automating AR processes has seen an increase in efficiency and job productivity, as time isn’t being taken up by invoice chasing. AR teams need to know their value and understand how automation will make their jobs easier, not become their replacement. 

How end-to-end AR can help your business

Organisations that have implemented automation technology are seeing substantial benefits. Automating AR improves merchant services in a number of ways. The most common benefits include improved productivity of the AR team (67%), increased customer satisfaction (67%) and improved customer retention (56%). As touched on already, the most compelling benefit of AR automation is to speed up the payments process, with 89% of respondents with mostly automated AR processing, seeing payment terms met or paid early. More efficient cash flow can only serve to positively impact the business and provide everyone involved with an improved level of service.

An accounts receivable automation system removes the risk of human error, typing mistakes and lost documentation. Automation offers efficiency and speed, which in turn leads to reduced costs in payment orchestration and processing. It also allows you to redirect your people, allowing them to dedicate more time to complex problems and enhance customer service and experience.

Change can be intimidating, particularly in a period of uncertainty. But often it’s necessary in order to survive. AR automation is a crucial step businesses must take if they want to cut down on costs and processing time, take charge of their cash flow and improve efficiency and productivity. Clinging on to legacy systems will only see them left behind.