Harnessing Value From Automating Your Accounts Receivable

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One of the most daunting tasks in any finance department is order to cash (OTC). It involves the complicated process of generating sales orders, tracking payments, and managing customer accounts. The sheer volume of paperwork and manual work that must be completed to ensure successful accounts receivable (AR) processing can quickly become unsustainable for small to medium-sized business.

In order to stay competitive, take advantage of the latest technologies and reduce costs, many companies have begun to automate their accounts receivable process. By automating AR, companies can streamline their workflow, reduce redundancy and errors, expedite collections, improve account visibility, and reduce administrative costs.

This guide explains the benefits of automating accounts receivable, from the perspective of the C-Suite executive. First, we will describe the challenges posed by traditional accounts receivable processes, and how automation can address these challenges. Next, we will discuss best practices for automating AR, such as choosing the right software and implementing an effective workflow. Finally, we will examine the ROI of AR automation and the potential advantages and disadvantages of the technology.

The Challenges of Traditional Accounts Receivable

An accounts receivable process includes many complex tasks, from invoicing customers and collecting payments to reconciling balances and managing customer accounts. Manual AR processes can be time-consuming and error-prone, resulting in inefficiencies and reduced visibility.

Data entry errors, manual paperwork and manual document filing are all common problems with traditional AR processes. Payments can take longer to process due to manual entry of data. As the number of customer accounts increase, operations can quickly become disorganized and unmanageable.

In addition, manual accounts receivable processes can be difficult to scale. As customer base grows, operations become increasingly complex and costly. The manual task of reconciling customer accounts and generating invoices takes longer and requires more expensive staff resources.

The Benefits of Automating Accounts Receivable

Automating AR eliminates the need for manual data entry and document filing. Automated AR solutions can shorten the time it takes to process payment and reduce human error, resulting in shorter processing times and improved accuracy.

These solutions can also provide improved access to customer data. By tracking customer accounts in real-time, companies can quickly access customer payment data, identify customers who are falling behind on payments, and take corrective action in timely manner.

In addition, automated AR solutions can be easily scaled to accommodate growing customer base. As the number of customer accounts grow, automated solutions can adjust to the changing needs of the business.

Best Practices for Automating Accounts Receivable

When considering an automated AR solution, it is important to choose the technology and workflow that is most suited to the business needs.

An automated AR solution should integrate seamlessly with other businessestems, such as financial reporting or ERP applications. It is also important to provide customer visibility into their payment status and account information. This can help to improve customersatisfaction and reduce the amount of customerservice inquiries.

The solution should also be tailored to the individual requirements of the business, such as customersegmentation, multiple billing schedules, customer discounts, and customer profiles. Automated AR solutions should also include automated data capture capabilities, such as invoice processing, payment tracking, and payment processing.

The ROI of AR Automation

The financial benefits of AR automation are often overlooked and underestimated. By reducing manual data entry and document filing, automated AR solutions can reduce paperwork and increase efficiencies. In addition, automated AR can reduce the need for additional staff.

The improved visibility of customer accounts can also help streamline collections processes and help identify customers who are paying late, allowing teams to take corrective action in timely manner. Automated AR solutions can also provide improved access to customer data and improved customerservice.

Advantages and Disadvantages of Automating Accounts Receivable

Although automated AR solutions can bring many benefits to business, there are potential drawbacks to consider. Automated AR solutions often require significant investment in initial setup costs and ongoing it isupport. In addition, automated AR solutions require access to the customers back-end system, which may be difficult for some business to provide.

Some automated AR solutions may also require additional infrastructure and software, such as customer relationship management (CRM) software and payment processing platforms. Finally, companies must ensure that all customer data is secure and comply with applicable privacy regulations.


For many business, automating their accounts receivable process is critical to remaining competitive in the marketplace and reducing administrative costs. Automated AR solutions can streamline operations, improve account visibility, reduce errors, and reduce the need for additional staff.

When choosing the right automated AR solution, it is important to consider the needs of the business and the advantages and disadvantages of the technology. By understanding the challenges posed by traditional accounts receivable processes and the potential benefits of automation, executive teams can make informed decisions about how best to harness value from automated AR.