How to make AR automation work for your enterprise

Accounts receivable (AR )automation is rapidly changing the landscape of B2B payments and creating competitive advantages for companies that invest in modernizing their infrastructure.

These organizations recognize that B2B accounts receivable automation can drive growth in surprising ways—including better cash flow, improved customer experience and higher sales.

What is AR automation—and why is it booming?

AR automation involves the use of technology to streamline and automate an organization's full order-to-cash lifecycle. It can help an organization reduce manual tasks and repetitive work, improve data flow and accuracy, streamline customer touchpoints like billing and collections, and capture operational efficiencies across its AR functions.

A comprehensive accounts receivable automation solution helps improve organizational performance in a number of ways: 

• Streamline credit application management and decisioning to reduce risk and remove delays that can frustrate your customers. 

• Automate tasks including invoice processing, billing alerts and payment reminders to reduce manual and repetitive work and free up your resources.

• Provide more modern and flexible tools that let your customers use the payment methods they prefer. 

• Apply customer payments against open invoices automatically, based on remittance information and predefined rules to make bookkeeping easier and faster.

Taken together, these improvements can help reduce operational expenses and risk, enhance the customer experience to drive loyalty and growth, and improve cash flow, resulting in increased revenue and greater profitability.

More AR automation tools, more data headaches

AR automation is not a new concept, and many organizations have begun to incorporate AR automation tools into their systems and processes. However, they have often done so by putting point solutions in place to address unique aspects of the full AR lifecycle.

For example, a business may have invested in AR software, collections reporting tools, and a payment portal. 

While each tool may have improved efficiencies in the area intended, this also creates silos in data and workflows across these applications and with enterprise systems such as enterprise resource planning (ERP) and customer relationship management (CRM). This approach also increases the burden on IT to manage disparate systems, tools, and reports.

To get the full benefits of AR automation, organizations require a holistic, end-to-end approach.

A full-service AR automation solution helps solve for complexity

A full-service accounts receivable platform through a trusted partner offers a comprehensive, end-to-end solution for the entire order-to-cash process, including managing B2B credit and the full AR lifecycle. It streamlines processes, reduces the burden on IT and provides a consistent customer experience.

A best-in-class, full-service AR solution offers:

• Near-instant credit decisioning, with automated workflows that balance risk mitigation with near-immediate purchasing ability so you can capture the sale.

• Flexible terms, giving you control at the customer level to offer the terms your customers need to make larger and more frequent purchases from you.

• Upfront funding, which improves your cash flow with guaranteed payment at the frequency of your choice.

• Flexible billing and payment options, including paper or electronic invoices or statements, payment by mail, online or autopay, and automated cash application.

• Online self-service or live customer support, through robust online tools for viewing purchases, downloading statements, or making payments and live customer-friendly agents that ensure the best experience for your customers.

• Collections management, using a business-friendly approach that focuses on resolving delinquent accounts while maintaining relationships and spending.

Forrester study highlights benefits of full-service AR solutions

A recent study by Forrester confirms the value that a full-service AR solution provides. Forrester surveyed over 300 enterprise financial decision-makers and discovered that external partnerships offer multiple benefits. 

Respondents noted that this type of solution helps unify AR processes, which leads to improved cash flow (63% of respondents), increased market share (63%) and increased visibility and control over AR (60%)¹. 

Automation is changing the landscape of AR, but understanding the options, benefits and limitations it presents can help you determine how to best implement it for your business.

To learn more about the value of a full-service AR solution, download the full Forrester study.

 

 

                                                                                                                                                                                                                                       

¹Derived from a commissioned study conducted by Forrester Consulting on behalf of Capital One Trade Credit, 2024.