Haven’t started automating receivables yet? The reasons to start now.

As businesses scale and expand globally, their financial operations naturally become more complex. More clients, more invoices, and more currencies to manage all contribute to the growing challenge of maintaining smooth cash flow and efficient financial processes. Add in the rising number of vendors and suppliers to keep track of, and it’s no surprise that finance teams are feeling overwhelmed. In the midst of this complexity, ensuring timely access to working capital and maintaining a steady cash flow becomes essential for any business looking to grow.

Many companies, particularly those with smaller finance teams, have already turned to automation to ease the burden of managing their accounts payable (AP) processes. However, accounts receivable (AR) automation remains surprisingly underutilised. According to Blackline and NACM, more than 40% of businesses are hesitant to adopt AR automation tools, despite the obvious advantages in efficiency, cost savings, and improved cash flow.

In this article, we’ll dive into the key benefits of automating your receivables process and explain why implementing an AR tool now is the smartest move for your business.

Improvement to the Bottom Line

Managing accounts receivable manually is costly—not just in terms of labor but also in missed revenue opportunities. Finance teams spend significant time and resources issuing invoices, chasing down late payments, and reconciling payments manually in accounting systems. This leaves less time for higher-value tasks like financial forecasting and strategic planning. For businesses with high sales volumes and small finance teams, the manual AR process can strain resources and may even require additional staff or costly overtime to keep operations on track.

Additionally, missing invoices or late payments can seriously hurt your bottom line. According to Barclays, over 50% of UK businesses report financial losses due to unpaid or late invoices. Clients often delay payments to extend their Days Payable Outstanding (DPO), which means your business may not receive funds when needed. A 2020 report by Pay.UK and the Chartered Institute of Credit Management (CICM) revealed that UK businesses were owed a staggering ￡17.5 billion in overdue payments, with the average overdue invoice amounting to ￡20,000.

The Solution? Automating your AR process from start to finish. Implementing an AR automation tool can help your team generate and send invoices, automatically post them to your accounting system, reconcile payments as they’re received, and send automatic follow-ups for overdue invoices. This end-to-end automation reduces the manual work required from your team, minimizes late or missed payments, and ultimately improves your company’s cash flow and bottom line.

Timely Data Leading to Better Forecasting and Decision Making

One of the most significant benefits of automating receivables is the access to real-time data. When invoices are generated and payments reconciled automatically, you gain immediate insight into outstanding payments, overall cash flow, and which clients are routinely late in settling their accounts. This real-time information is invaluable for making informed decisions about your business’s financial health.

With timely data in hand, your finance team and executives—especially the CFO—can make proactive decisions rather than reactively chasing overdue payments. Accurate cash flow information allows for better financial forecasting and planning, ensuring your business always has the working capital it needs to grow. Businesses that rely on manual AR processes often face delays in gathering and analyzing financial data, making it difficult to respond to trends or issues quickly.

By automating your AR, you remove the lag between invoicing and payment reconciliation, giving your team access to up-to-date information at all times. This translates into faster decision-making and more efficient use of your company’s financial resources.

Improved Efficiency

Manual AR processes are not only time-consuming but prone to errors, whether it’s an incorrect invoice amount, a duplicate entry, or a missed payment reminder. These errors cause delays, lead to frustrating back-and-forth communication with clients, and can damage your reputation as a reliable business partner.

According to a recent study, nearly 7 in 10 companies that adopted AR automation reported a significant decrease in errors. Automated AR tools integrate with your existing accounting system, allowing client information to be stored and updated regularly. Once entered, this information is automatically populated into invoices and seamlessly transferred between your AR tool and accounting software, reducing the risk of human error.

With standardized procedures in place and fewer mistakes to fix, your finance team can focus on more strategic activities, such as managing relationships with key clients and improving cash flow forecasting.

Better Client Retention

Inaccurate or late invoices aren’t just problematic for your business—they’re frustrating for your clients, too. A poor AR process can harm your relationships with key clients, potentially causing them to look elsewhere for more reliable partners. On the other hand, prompt and accurate invoicing, coupled with flexible payment options, can help you build stronger relationships with your customers.

By automating your AR, you ensure that invoices are sent on time and without errors. Customers appreciate the ease of managing their own finances when they receive accurate, timely invoices, and when you make it easy for them to pay—whether in their local currency or through various payment methods—it improves their experience with your company. Satisfied clients are more likely to pay on time and continue doing business with you, enhancing client retention and helping you grow long-term relationships.

What to Look for in an Accounts Receivable Tool

If you’re convinced that now is the time to automate your receivables process, the next step is finding the right AR tool for your business. Here are some key features to look for:

• Integration with Accounting Tools: Ensure that the AR tool integrates seamlessly with your existing accounting system, allowing for two-way communication. Invoices generated in the AR tool should automatically post to your accounting system, and payments should be marked as received without manual input.
• Automated Payment Reminders: Look for a tool that can send automatic payment reminders for overdue invoices, helping reduce Days Sales Outstanding (DSO) and improving your cash flow.
• Flexible Payment Options: The tool should allow you to accept payments in multiple currencies and through various methods, such as bank transfers or credit cards, to accommodate your global customer base.
• Visibility Features: Choose a tool that lets you easily segregate incoming payments into sub-accounts, giving you granular visibility into where your money is coming from and how it aligns with your sales and revenue goals.
• Ease of Implementation: Look for a plug-and-play solution that’s easy to implement and use without extensive IT support. This will ensure a smooth transition for your finance team.

Fyorin: Your Partner in Global Accounts Receivable

If you’re ready to automate your receivables and streamline your financial processes, Fyorin accounts receivable solution is the perfect partner. Our platform integrates seamlessly with major accounting systems, including Xero, QuickBooks, NetSuite, Zoho, Microsoft 365, and Sage, ensuring a smooth experience for your finance team.

With Fyorin, you’ll be able to:

• Automatically reconcile paid invoices and reduce manual work,
• Eliminate invoicing errors by generating and sending invoices directly from the platform,
• Improve cash flow with automatic payment reminders for overdue invoices,
• Collect payments in over 100 currencies, supporting your global growth,
• Gain real-time visibility into your incoming funds.

If you’re interested in automating your receivables process, saving time, and improving your bottom line, please do reach out to me on [email protected] to discuss further.

Conclusion

Accounts receivable automation offers numerous benefits, from improved cash flow and reduced errors to better client retention and enhanced efficiency. If you haven’t started automating your receivables yet, now is the perfect time to implement an AR tool and take your financial operations to the next level. With the right solution in place, you can support your company’s growth, optimize working capital, and foster stronger client relationships. Don’t let manual processes hold your business back—start automating your receivables today!