John F. Rubinetti III, President of B2B Payments, Deluxe.
In the digital payments landscape, businesses are prioritizing convenience, security and speed for end users. However, many organizations I speak with have yet to extend these advancements to their operations, relying instead on manual accounts receivable (AR) and accounts payable (AP) processes that drain time and resources. These inefficiencies often distract finance teams from focusing on strategic, high-value initiatives, such as optimizing cash flow and enhancing customer relationships, opting instead to manage day-to-day operations.
These inefficiencies are creating lasting impacts on organizations. For example, my company conducted a study that found most companies spend 10 to 14 hours monthly on manual AR processes, equating to nearly a month of lost productivity per year. Meanwhile, the 2025 AR/AP Automation Global Market Report shows that the AR/AP automation market is projected to grow from $2.24 billion in 2024 to $2.61 billion in 2025. This underscores a growing recognition that digital transformation is not just beneficial—it’s essential.
Ways Automation Can Help AR And AP Processes
Here are four reasons why organizations are increasingly turning to AR/AP automation:
1. Greater Efficiency And Time Savings
For organizations I speak with, no matter how big or small, manual workflows still dominate critical tasks. This is especially prevalent for mid-market finance teams, where credit approval (48%), remittance capture (45%), post-deposit invoice matching (44%) and business rule creation (43%) are still being done manually.
Compared to automated advancements, conventional AR/AP methods like spreadsheets, manual data entry, email chains and paper approvals are proving to be even more inefficient and time-intensive. Turning to automation can allow organizations to accelerate operations, reduce administrative burdens and improve overall productivity.
2. Reduced Errors And Stronger Compliance
Human error is a fact of life with manual processes. In the financial transaction space though, this can lead to costly mistakes, duplicate payments, incorrect invoices and compliance breaches. Further, the time spent manually finding and remediating these errors often leads to financial turbulence and damaged vendor and customer relationships. When extrapolated to over 20 million payments a year, like some organizations I’ve supported, such events can be disastrous.
Automation reduces these risks by standardizing processes while relying on artificial intelligence (AI) to detect payment discrepancies. The result is an environment that enhances collections, improves accuracy and compliance, and speeds up document processing time.
3. Improved Cash Flow Visibility
Adopting automated AR/AP processes gives greater control over expenses and revenue by providing real-time visibility into financial transactions. This enables companies to monitor payments, invoices and receivables with greater precision.
Access to up-to-date financial data also allows finance teams to forecast cash flow more accurately, anticipate shortfalls and seize investment opportunities. With a clearer picture of their financial health, businesses can make more informed decisions and enhance long-term stability.
4. Shortened Cash Conversion Cycle
Because automation can streamline AR/AP workflows, finance teams can expedite invoice, payments and receivables processing, translating to quicker access to funds. Faster processing times also help organizations realize significant cost savings while enhancing vendor relationships, creating the opportunity for early payment discounts.
Such processes are extremely useful in the for-profit sector, but are even more so in the nonprofit space. Take, for example, relief foundations who can use automation to significantly reduce payout times for those experiencing hardships.
Considerations When Using Automation In AR And AP Processes
While AR/AP automation can transform organizational workflows, it does come with its share of risk, most of which is found in planning and implementation. Specifically, missteps such as inadequate process mapping, unclear success metrics and poor change management frequently lead to stalled or partially completed projects. According to a recent Datos Insights study, 1 in 3 mid-tier banks see IT resource demands as a significant barrier, while 35% struggle to understand available payment options and how they align to business needs.
Such hurdles must be addressed, and soon. The rising adoption of ISO 20022—which according to Datos is already adopted by 24% of businesses, and 36% more plan to adopt it soon—signifies a massive market shift in payment data standards as we move toward data- and automation-driven infrastructures.
Automation: The Future Of Finance
The modernization of financial operations is accelerating, and companies that don’t embrace the drive toward automation will have a tough time remaining competitive. AI-driven AR/AP automation is quickly changing industry norms by introducing predictive capabilities, fraud detection and intelligent decision-making. As AR/AP automation technologies continue to become more readily available, we’re now moving to an environment where it’s no longer if but when the transformation will happen.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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