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AR automation – most frequently asked questions – A guest blog by Serrala


Does AR Automation generate increased operational efficiency?
Increased efficiency is a primary driver for automating Accounts Receivable (AR) processes. By automating AR, clients using different payment methods are provided with greater flexibility, while application and matching rates are significantly increased.  This enables professionals to enjoy reduced unallocated cash, updated client accounts each morning, automatically cleared bank statements, remittance advices, lockbox, and settlement files. The need to contact clients for further remittance information is considerably reduced, as are manual workloads and exception handling duties. Automatically detected discounts and deductions boost operational efficiency too, leading to improved follow-up.

Credit managers also obtain significant benefits from AR automation, as automated data sourcing and approval procedures speed up their decision-making process and supports greater operational efficiency and an enhanced sales cycle. Automation can also help address any lack of visibility across the entire AR process cycle, as AR teams will be able to monitor important KPIs and gain full transparency of the process. Finally, fragmented and decentralized processes can be overcome by building a standardized and reliable, central AR system.

How can AR automation improve working capital?
On average, one-third of an organization’s working capital is tied up in their accounts receivable. By automating AR operations, credit managers can easily explore internal finance sources, find, and access hidden funds while increasing   their working capital. By ensuring that customer payments are immediately matched with intelligent automation, benefits like improved DSO (Days Sales Outstanding) freed up cash as well as access to funds as very quickly become a reality. Similarly, it is equally prudent to strive for a streamlined collections and credit management process to bring cash in quickly thereby increasing working capital.

Can AR Automation support a comprehensive corporate digital transformation agenda?
In short, yes. Accounts receivable automation is a key component of the digital future being a   fundamental financial operation. The time to engage in technological transformation is now. According to Deloitte’s 2021 Digital Transformation Executive Survey, businesses that are more digitally mature are more robust and better able to manage upheaval and rapid change. Investing in intelligent technology and designing corporate processes by way of a forward-thinking mindset has undoubtedly improved both adaptation and resilience. These efforts have enabled organizations to manage several crises, and this resilience was clearly demonstrated during the pandemic and other current global crises.  This will undoubtedly continue to be the case whether the AR Automation processes are managed on-premises, in the cloud, or in a hybrid environment.

How will automation impact the future AR?
Working from home is now the new standard in many financial firms, with many employees wishing to remain in this set up permanently. Some have given working in a physical office entirely, while others would ideally like to combine both. Digital infrastructure and AR Automation are essential elements in making all these scenarios successful.

Digital and centralized solutions provide remote working employees with access to key data from anywhere, enabling them to successfully manage their clients and risk control processes remotely, they can also implement working capital optimization in the cloud or in a hybrid environment, and with ease and flexibility.

Inevitably, there will be many questions about the functions and the connection between people and technology. Finance organizations must combine new technical capabilities with human knowledge, expertise, and experience to be successful. New skills and processes will be necessary for any aspiring digital company, and this will encourage businesses to rethink how they operate, as well as reconfiguring the roles of their employees and their various responsibilities. Nevertheless, what we have noticed in our collaboration with various organizations worldwide is not so much technology taking over, as people and technology collaborating to add value to the business and its bottom line.

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