Looking into the future of AR automation

In the digital age, when transactions are expected to be smooth and seamless, many organisations still face disruption and delays in their order-to-cash process, the knock-on effects of which can be detrimental in terms of working capital, customer relationships and business growth. Here, Finance Director Europe looks at how automation of accounts receivable can put a company’s data to work – and unlock new opportunities for value creation.

veryone likes to get paid for their work – and the quicker they get paid, the happier they are. This is true on an individual level, and at enterprise level. Swift and seamless payment of invoices enables a business to put its revenue to work and build towards the next stage in its growth. Conversely, delays in payments from customers restrict cash flow, diminish working capital and, ultimately, hold back a business from pursuing its strategic goals. The order-to-cash (O2C) process is where these pain points arise and is therefore a natural place for organisations to focus – with accounts receivable perhaps the most critical area of all. Until now, however, it has often been overlooked in the search for efficiency.


“HighRadius has also developed its solutions to suit middling enterprises that don’t have the IT resources to consolidate on an ERP platform but still want to automate and streamline their receivables and treasury processes.”

Enterprises may understand the need to avoid late payments, manage disputes effectively and keep days sales outstanding (DSO) to a minimum. But they often have highly inefficient processes in place. Much of the AR process is still handled manually, workflows are complex and inefficient, and the collections process is frequently dogged by manual errors, inaccuracies and delays.

In other words, conventionally managing AR is by no means easy. There are numerous components to address, from multiple internal and external data feeds to the complex reporting obligations. The importance of AR in accelerating cash flow, keeping a firm grip on DSO, improving invoice management and, fundamentally, creating stronger customer


relationships nevertheless means that the complexity must be met head-on and conquered. The question is how a company can quickly affect meaningful change to control DSO, increase the productivity of employees in the AR function, improve cash flow, manage disputes and improve customer engagement. The answer is automation.

Accelerating automation

The market for AR automation has already seen explosive growth in recent years, and the pace of that growth is set to quicken. Adroit Market Research estimates that the market could be worth $4bn by 2025, as companies wake up to the advantages of removing manual and paper-based processes. As adoption continues to grow in key industry sectors such as manufacturing, finance, retail and consumer goods, the gains could be significant. A study from Market Insights Reports, which has looked at the potential expansion of the market between 2021 and 2025, concludes that automation across returns processing, workflow management, customer support management, accounting and finance, ERP management and marketing, and consumer behaviour analysis could save as much as $2trn globally – by eliminating the human element from many key tasks. The rapid growth of the e-commerce sector is also a powerful force driving AR automation. Online sales in the US, for instance, are expected to double by 2023, meaning they will account for as much as 25% of the retail sector.

Some of the growth in online sales – and in the digitalisation of transactions in general – has been driven by the Covid-19 pandemic, which has pushed businesses and their customers to increasingly virtual interactions. In such an environment, finance leaders need to look at how digital transformation can be implemented in the AR process, and consider which technologies might help them to achieve results in the most efficient way.

Finance Director Europe /

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