Accounts Receivable (AR) processes are vital and are something that is done every day, but they are still complicated. One of the challenges facing AR professionals is that 93% of organizations receive late payments from clients, resulting in cash flow delays.

A new study, the November 2021 Working Capital Playbook, a PYMNTS and YayPay collaboration, reports that automation is a potential response to this and other AR challenges.

“AR automation helps structure a customer communications strategy in which messages are frequent, informative, and timely,” Anthony Venus, CEO of YayPay, told PYMNTS. He explained that automation can tailor communication to each customer and include the details the customer needs to complete the payment.

This is one of the many benefits the study found. Automating RA could play a critical role in shortening payment terms, minimizing RA errors, and reducing past due sales days (DSO). By delegating day-to-day processes such as collections and invoicing to artificial intelligence (AI) -assisted solutions, these systems dramatically reduce the capacity for human error and speed up complex calculations that tend to be tedious for accountants.

Get the study: Working capital manual

When the automation of AR is combined with the digitization of payments, there is another benefit: the risk of check fraud is reduced. This reduction in fraud, coupled with improvements in accuracy and speed, makes the digitization of payments and the automation of AR a winning combination when it comes to improving cash flow and performance. overall business income.

The study reports that 87% of companies with AR automation said they saw an improvement in overall process speed, and 75% said AR automation improved their customer service. Automated companies also reported that the DSO also dropped significantly; the average automated business sees a 40-day DSO while businesses that run their RA operations manually have a 47-day DSO

Significant AR-related challenges remain in a myriad of industries, but implementing automation could save valuable human and financial resources that could be spent on other business activities.