AR Automation: The Blunt Reality

By Nick Roquefort-Villeneuve, Global Marketing Director – Amalto Technologies 

Amalto-AR-Automation-Reality-1Accounts receivable (AR) bring money into your organization. And the choice to automate all business processes that are associated to your AR offers multiple key-advantages, including the elimination of human errors, a quasi-instant access to information, lower collection costs and decreased DSO.

On average, mid to large-size businesses that have implemented an AR automation solution have experienced (IDC Stats):

  • 20% decrease in their DSO
  • 25% reduction in past-due receivables
  • 15% to 25% decrease in bad-debt reserves, and
  • ROI within 3 months

The concrete reality behind a shift from a paper-based system to an AR automation solution revolves around costs minimization, cash flows optimization and therefore a limitation of a company’s exposure to risk.

Ultimately, an organization that elects to automate its AR processes:

  • Optimizes productivity: Inefficiencies due to the paper-based management of processes disappear. It can indeed take over 16 days to process a single invoice when an office has minimal process automation
  • Eliminates manual errors: Automation infers that human errors inherent to keying vanish
  • Saves money: lower interest payments on lower cash flow trapped in AR, decreased payroll due to the obsolescence of positions initially associated to manual tasks
  • Increases its agility: Access to information updated in real-time that allows decision-makers to make instant adjustments, forecasts, among other advantages
  • Leaves room for both automation and human interaction: Via the use of workflows that provide visibility over exceptions and the ability to make decisions from the click of a mouth, and
  • Gains competitive advantages: By being able to accommodate any systems used by its customers

Lastly, to select an application that runs in a private cloud rather than on-premises or in a shared cloud environment provides much flexibility each time an upgrade needs to be performed. Moreover, the level of security that private clouds offer compared to public clouds is much tighter, since all data is saved and managed on servers to which no other company has access. Data privacy is therefore greatly improved, and your organization wouldn’t need to worry about the physical security of the infrastructure.

To conclude, the number one cause for refraining from embracing full-on AR automation is fear of change. But the benefits are significant, from reducing dramatically DSO to no longer needing to hire addition headcounts (clerks, for example).