72% of Firms Say AR Automation Reduced Operating Costs

Accounts receivable (AR) teams are leveraging technology to meet the demands of today’s remote economy. Automating routine AR processes can be a critical step in addressing remote accounting hurdles as well as the traditional chores within the order-to-cash (O2C) process.

For example, among the firms that have deployed AR automation, 87% reported faster processing speeds, 79% said it improved AR teams’ efficiency, 75% said it resulted in a better customer experience and 72% said it reduced operating costs, according to the Working Capital Playbook, a PYMNTS and YayPay collaboration.

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“Automation is making a significant impact in accounts receivable,” YayPay CEO Anthony Venus told PYMNTS. “The finance process has historically been extremely manual and inefficient, and today, companies are leveraging automation to complete tasks within the O2C cycle quickly and accurately.”

Adapting to the New Business Landscape

The need for a move away from manual processes and toward automation has been multiplied by the two years of the pandemic and the new way of living and working that came with it, with no end in sight.

Read more: Responding to ‘Pandemic Fatigue,’ Companies Lead with Empathy

Accounting departments have had to pivot quickly to adapt to the new business landscape. The combination of the complications of remote work, the tumultuous economy and many businesses’ unfamiliarity with digital payments have challenged AR teams. The late payments and errors that stem from these difficulties could be devastating for cash flows.

The shift to remote work brings with it a set of AR challenges. Accounting practices that rely on in-person collaboration, communication and manual processes cannot occur when employees are potentially thousands of miles apart, and phone calls or teleconferencing may be inadequate. Nearly half of firms rely on manual AR processes.

Removing the ‘Busy Work’ Done by AR Teams

New solutions are needed to adjust to the dual challenges of remote work models and economic uncertainty. AR processes that rely on automation could be a lifesaver for accounting teams struggling to adapt to the altered status quo.

Digitization must proceed automation, and many companies see digitizing their accounting processes as a worthy investment and a steppingstone to automation. A PYMNTS study found that 43% of chief financial officers (CFOs) were digitizing AR processes as a precursor to automation, and 70% said that digitizing AR functions is vital to building lifetime customer value. Forty percent said digitization of accounting operations has resulted in fewer paper checks, and 61% reported digitizing customer or vendor invoices.

“Through automation, the ‘busy work’ done by AR teams is removed, which allows them to focus on value-added tasks,” Venus said. “Teams are now able [to] home in on the exceptions, where true risk exists, which has positively impacted the length of the payment cycle, increased working capital, contained costs and enhanced the customer experience.”