An object at rest stays at rest, Isaac Newton famously proved.
And for many otherwise-savvy B2B businesses, the object most likely to be perennially obstructed by inertia tends to be their accounts receivable (AR) function.
“As companies grow in size, they’re often manually trying to match payments and remittance through Excel spreadsheets and things that aren’t that efficient,” Corrie DeCamp, Chief Product Officer at Billtrust, told PYMNTS during a conversation for the B2B Payments 2024 event.
DeCamp explained that many companies are still struggling with inefficiencies of manual processes which lead to delayed payments, high error rates and increased operational costs. She emphasized that in contrast to legacy AR workflows, embracing automation technologies can help firms elevate their financial resilience and operational efficiency, noting that automation is vital for faster and more predictable cash flow, lower day sales outstanding (DSO) and a stronger overall financial position.
After all, against today’s fast-moving and unknowable backdrop, automating AR goes beyond just saving time for businesses — it also enhances organizational flexibility and boosts resilience, reducing manual, repetitive tasks and allowing finance teams to focus on strategic initiatives.
The result is not only a more predictable cash cycle but also a stronger capacity to adapt to economic uncertainties, making AR automation a strategic, as well as tactical, investment.
In today’s financial environment, efficient cash flow management and operational stability are essential. However, according to recent studies, only about 24% of companies have implemented dedicated AR automation software.
To illustrate the transformative power of AR automation, DeCamp shared a Billtrust customer example. Before implementing automation tools, they relied on manual ACH processes that led to frequent errors and discrepancies in payment records. This not only slowed their cash cycle but also created customer service challenges as errors were frequent and time-consuming to rectify.
With the embrace of automated AR solutions, the customer saw a significant leap in efficiency. The tools improved their ACH match rates to over 99.5%, with credit card match rates reaching 100% accuracy. These advancements allowed the company to process and recognize over 800 payments per day, saving more than 20 hours daily that had previously been spent on manual reconciliation, illustrating the tangible benefits of AR automation: accelerated revenue recognition, minimized operational costs and improved customer relationships.
Despite the clear benefits, many companies remain hesitant to automate their AR processes. According to DeCamp, manual AR processes remain the norm for a significant portion of businesses, with paper checks populating the landscape. This reliance on outdated methods not only slows down cash flow but also increases operational costs and exposes companies to unnecessary risks.
DeCamp also stressed that automation is about more than reducing costs — it is about preparing for an unpredictable economic future. By digitizing AR, companies can better withstand financial fluctuations and ensure more consistent cash flow, regardless of external economic conditions. As companies consider the shift to automation, DeCamp advised them to think about automation as an investment in organizational resilience.
A primary advantage of AR automation is its capacity for compounding integrations with artificial intelligence (AI) and machine learning (ML) technologies, enabling companies to extract and unlock actionable insights from payment data. DeCamp explained that Billtrust’s AI-driven solutions, such as their Finance Co-Pilot, provide CFOs and finance teams with real-time analytics and predictive insights, transforming cash flow management into a proactive, data-informed process.
With predictive accounting tools, companies can anticipate potential cash flow bottlenecks, make targeted collection decisions and maximize AR efficiency. For instance, AI can recognize patterns in customer behavior, flagging accounts that are consistently at their credit limit yet have a solid payment history. This insight allows AR teams to make timely adjustments, such as offering extended credit to reliable customers.
AI also aids in customizing payment reminders and matching payments with invoices, resulting in higher payment accuracy and improved customer satisfaction. With this level of intelligence, finance teams can address potential issues before they escalate, positioning the AR function as a vital tool for growth and customer relations, noted DeCamp.
AR automation can also optimize customer interactions by providing self-service payment portals, flexible payment options and streamlined billing. These features cater to diverse customer needs, from simple online payments to mobile options and international invoicing. By offering such flexibility, companies can facilitate faster payments and reduce friction in the payment process, ultimately improving cash flow and customer satisfaction.
The future of AR, explained DeCamp, is digital, intelligent and customer-focused. As companies embrace this shift, they will not only improve their own financial health but also set a new standard for efficient and effective financial management in the B2B landscape.
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