59% of US Businesses Link Poor Cash Flow to Manual AR Processes

As Silicon Valley innovates with artificial intelligence, many companies remain burdened by outdated paper invoice systems. This disconnect hinders efficiency and presents financial risks. With invoice volumes set to rise sharply, businesses must recognize that manual accounts receivable (AR) processes can no longer meet modern demands.

A PYMNTS Intelligence Report, Businesses at Risk: The High Cost of Manual AR Processes and What to Do About It, in collaboration with Esker, shows how embracing AR automation has become essential for survival and growth.

The Threat of Manual Processes

The challenges posed by manual AR systems are mounting. According to the report, 59% of U.S. businesses link poor cash flow and forecasting capabilities to outdated methods. Companies are increasingly overwhelmed by the volume of invoices, with projections suggesting a 46% increase in invoice volumes over the next three years.

This impending crisis is underscored by the fact that 35% of firms have not automated their AR processes and 24% still rely on outdated spreadsheets. The resulting inefficiencies can cripple organizations, leaving them vulnerable in a digital-first economy.

Barriers to Automation

Despite the clear need for automation, many companies are hesitant to adopt new systems. Consider 96% of mid-sized firms face obstacles in transitioning to AR automation, mainly due to cost concerns. Half of these firms have delayed automation plans because of the significant financial investment required.

Additionally, 37% of executives report having halted or abandoned initiatives due to fears about the time needed to train employees. This widespread hesitation threatens to leave companies in a precarious position as competitors advance with automated solutions.

The Benefits of Embracing Automation

For those who successfully transition to AR automation, the benefits are substantial. Among adopters, 83% of AR executives report improved process efficiency and accuracy. Furthermore, 75% indicate enhanced cash flow and savings, directly impacting business growth. As automation becomes more comprehensive, 93% of AR executives expect further improvements, particularly in data availability for strategic decision-making. This stark contrast highlights the widening gap between companies that embrace automation and those that cling to outdated practices, emphasizing the urgent need for action.

Relying on manual AR methods is increasingly untenable. Companies that leverage AR automation not only improve cash flow management but also position themselves for sustained growth in a rapidly evolving market.

To bridge the gap between the need for automation and its implementation, businesses must take actionable steps. First, conducting a thorough audit of current accounts receivable (AR) processes is vital. By identifying the most time-consuming and error-prone tasks, companies can effectively advocate for automation and demonstrate its potential benefits.

Selecting the right automation solution that aligns with specific organizational needs is equally important. Factors such as scalability and integration capabilities should guide this decision. Leveraging AI-driven tools can enhance efficiency by simplifying tasks like cash application and payment matching, allowing staff to focus on more strategic priorities.

Partnering with AR automation providers who understand the unique challenges businesses encounter can improve the chances of success. Collaborating with experts who offer ongoing support ensures that AR teams are equipped for long-term effectiveness. Investing in AR automation is essential for sustaining financial health and operational efficiency.