Automation of AR helps 90% of businesses get paid on time
By Gaia Lamperti
Supply chain issues and inflation put increased pressure on businesses to get paid on time. Now more than ever, it is imperative businesses find ways to increase efficiencies to keep a positive cash flow. New data has shown that 89% of businesses that have automated accounts receivables processes are getting paid within their agreed payment terms or faster.
Accounts receivable or AR is money due to a company for products or services that have been outlaid but not paid for as yet. Accounts receivable automation can streamline the money collection process as well as take away human error risks such as typing mistakes and misplacement of documents.
BlueSnap, a global payment orchestration platform committed to helping B2B and B2C businesses accept and optimise payments around the world, conducted a study on the subject and the major takeaway was that organisations have only automated a fraction of their AR processes with plenty of gaps left. This means there is still a lot of work needed before reaping the full rewards of true end-to-end AR automation.
The survey, called ‘Automating Accounts Receivable’, interviewed executives globally to examine the extent to which businesses are adopting automation in their accounts receivable processes and which benefits they are getting from it.
The research showed that nearly half (49%) of global businesses are stuck using legacy AR processes. While many organisations have started to automate AR processes, they are often only automating one or two steps. When it comes to generating invoices, only 19% have completely automated the process and a mere 15% have completely automated sending the invoices.
Only 8% of the companies surveyed had completely automated the setup and management of customer payment plans, while more than half (51%) said they had the process mostly, but not completely, automated. These fragmented attempts are small steps in the right direction, but to see the full operational benefits like better cash flow, increased customer satisfaction and improved employee productivity, it is essential for businesses to completely automate AR processes.
“It is clear from the report that most companies have an AR automation gap that must be filled in order to operate at optimal efficiency. Hence, it is encouraging to see that almost 90% of the senior executives that we surveyed now recognize the value of AR automation and are willing and ready to invest in it. Nikhita Hyett, Managing Director, Europe, at BlueSnap, said: “The pandemic has done a lot to show businesses the weaknesses in their operating processes – many of which are costing them money. To fully absorb the benefits of automation, now is the time for businesses to completely pivot away from legacy, manual processes.”
The factors preventing organizations from fully automating their AR processes include a lack of understanding of the technology available (71%), a fear that automation will take the human element out of the business (47%), lack of technical expertise to implement new systems (44%), and a concern that people will lose their jobs (23%).
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