The Impact of Accounts Receivable Automation on Business Performance

The Impact of AI and Automation on Business Performance

Automation isn’t going anywhere. No matter the industry, adopting automation and AI tools is no longer a competitive edge — it’s the price of playing the game.

A Deloitte study found more than 50% of businesses plan to implement AI and automation technologies this year. And for those of us in the accounts receivable (AR) space, AR automation is a quickly growing market worth $2.64 billion. No big deal.

Actually, AR automation software is a big deal for businesses who adopt it, though not all have caught on yet. Despite the growing recognition of automation solutions’ important role in improving business outcomes, only 37% of finance departments have clearly defined their technology investment strategies for the coming years. In fact, 82% of small businesses fail due to poor cash flow management, of which AR is a crucial component.

The good news? One of the easiest ways to improve business performance is by automating your accounts receivable process. Automation technologies can help your AR team save time, eliminate bad debts, improve working capital, streamline customer payments, and more.

Let’s examine the pros of automating AR, outline AR automation software tools helping companies today, and break down real-world examples of successful AR automation.

Accounts Receivable Automation Benefits on Business Performance 

Automating financial processes like accounts receivable can be a boon for businesses who want to make large gains in saving finite resources like time, money, and employee bandwidth. For example, when it comes to cutting costs, automation technology typically costs just one-third the amount of an offshore employee or one-fifth of an onshore employee.

Overall business performance will inevitably improve if you can redistribute those resources to other high-impact areas of the business through automation.

Let’s break down the specific benefits of automating AR into three categories:

  1. Efficiency

  2. Productivity

  3. Optimization

Efficiency: Better Than Before

By automating accounts receivable, AR teams are able to work more efficiently than before. This is especially helpful in two areas:

  • Reduce Errors: With outdated manual processes attached to accounts receivable, errors are inevitable. We’re only human, after all. Over time, however, those errors can have major financial and reputational consequences. Implementing automation can reduce errors and build trust among clients and employees.

  • Improve Cash Flow: Similarly, cash flow is key for any business’ success. Automating accounts receivable accelerates payment processing, making it easier to process customer payments now and predict financial outcomes in the future.

Productivity: Doing More, Better

Would your AR team rather spend 40+ hours a week on rote processes, or 40 hours a week on complex, mission critical tasks that improve CEI and DSO? It’s probably the latter. No one loves boring, time consuming tasks. Automating your accounts receivable can help you:

  • Save Time: Implementing automation processes can save finance departments an estimated 25,000 hours of avoidable rework caused by human errors. Apply your AR team’s average hourly salary to that mix and see just how much you’re missing out on by not automating your AR process.

  • Improve ROI: One of the greatest benefits of automating AR is the increased financial analytics and insight you have at your fingertips. Real-time insights means better data on payment trends, AR problem areas, and what’s working. ROI is much easier with a wealth of information in front of you.

Optimization: Innovate & Improve

Lastly, AR automation benefits your business even beyond your AR team. When you’re able to improve productivity and efficiency, customers and employees alike are much more likely to be satisfied with their relationship with your business.

  • Better Customer Experience: With AR automation in hand, customers benefit from a seamless payment, collections, and invoicing experience that makes it easier for them to interact with your business. Automation makes your B2B accounts receivable process more like the B2C experience customers know and love — it’s frictionless, simple, and intuitive.

  • Better Employee Experience: The same goes for your employees. AR experts aren’t likely to stick around at a company that won’t adopt the latest technologies and tools that make their lives easier. They got into the field because they like finance, not repeatedly calling about collections or managing spreadsheets.

Now that we’ve seen how AR automation benefits business performance overall, let’s examine how Tesorio’s platform specifically makes proving AR automation ROI easier than ever.

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Real World Examples: How Automating Accounts Receivable Makes a Difference

Just because an accounts receivable automation tool exists, doesn’t mean it’s right for your team. However, two Tesorio customers achieved powerful results by applying our technology to their specific problems.

1. GitLab + Tesorio = Automate Manual Tasks

Like many companies, when GitLab came to Tesorio, their accounts receivable system had grown over time without much of a strategy behind it. After automating their AR processes, the team reduced their time spent on manual tasks, freeing up time to focus on activities that improved outcomes.

“Agents were spending 45 hours a week just on billing-based activities,” explained Sarah McCauley, GitLab’s Director of Billing and Accounts Receivable. “With Tesorio, we’ve pared that down to around 30 hours per week per agent, and that opens up 10 hours per week for activity that improves CEI.”

With Tesorio, GitLab was able to:

  • Scale their team from 6 to 11 agents and counting

  • Reduce time spent on daily billing tasks by 30%

  • Automate AR forecasting to improve DSO

  • Prioritize team development and enhance CEI

2. Smartsheet + Tesorio = Better Customer Experience

For Smartsheet, finding a solution that could match their goals for the customer experience when it came to dunning campaigns was crucial. With different customer groups needing a different level of care, automation with personalization was nonnegotiable.

“We need to treat our customers uniquely depending on the relationship, and we couldn’t do that with an ERP system that sent the same thing to everybody,” explained Wade Moss, Smartsheet’s Director of Financial Operations.

Tesorio’s personalized campaigns allowed Smartsheet to personalize their dunning campaigns and improve their customer experience.

With Tesorio, Smartsheet was able to:

  • Eliminate spreadsheet tracking of 150,000+ customers

  • Expand outreach capabilities for 11,000 open invoices and counting

  • Increase productivity with collectors now spending 85% of their working day in only one system

  • Exceed a recent quarterly cash goal by approximately $14 million

  • Combine AR with customer care, a key organizational goal

By applying automation to their accounts receivable efforts, both Smartsheet and GitLab were able to improve business performance and focus on areas that matter.

The Software & Tools Making Accounts Receivable Automation a No-Brainer

With so much to gain from automating the accounts receivable process, software like Tesorio is making a big difference for companies who want to improve (and prove) the impact of their automation on business performance. Tesorio’s AR automation solution was designed for AR teams who need their process to go farther than they could on their own.

Tesorio’s platform improves business performance in a variety of ways:

  • AR Data Aggregation: Tesorio unifies your cash data into a single platform, including from your ERP. Goodbye spreadsheets, hello simplicity!

  • Automated Dunning: Gone are the days of sending 1-1 emails for dunning campaigns. In Tesorio, you can create personalized email templates that are sent at the right time to the right customer groups. Segmentation and personalization are made easy.

  • Invoice Prediction: Powered by machine learning, Tesorio analyzes historic behaviors to create individual customer models. You’ll no longer have to leave your cash flow up to chance.

  • Collaborative Workspaces: Lastly, Tesorio makes it easy to collaborate across teams, sharing vital information in an organized, customizable, and clear workspace.

In short, Tesorio’s platform makes AR automation a no-brainer for finance leaders. Learn more about how our platform can improve cash performance, cash flow predictability, and deliver customer satisfaction here.