Is your finance department struggling with manual tasks, delayed payments, and fragmented systems? You’re not alone.
A staggering 93% of companies struggle with outdated AR processes, and 59% link poor cash flow to manual AR. If your finance team spends too much time chasing payments, correcting errors, resending invoices, and answering customer inquiries, it’s time to rethink your approach. Inefficient accounts receivable (AR) processes drain resources, frustrate customers, and hold organizations back.
The solution? AR automation. By streamlining invoicing, payments, cash application, and collections, automation transforms AR into a strategic powerhouse. The right AR software reduces errors, accelerates payments, and enhances customer satisfaction. However, with an abundance of options and a wave of industry jargon, selecting the right solution can seem daunting.
In this blog post, we provide a glimpse into our comprehensive AR Software Buyer’s Guide, equipping you with insights to guide your decision-making and modernize your AR operations.
Modernize your operations for long-term success with The Ultimate Buyer’s Guide to Accounts Receivable Software
Assessing Your Needs: The First Step to AR Success
Before diving into software features, take a step back and evaluate your current AR processes. Where are the pain points? What are your biggest challenges? What outcomes do you need to achieve?
By understanding where your existing AR operations fall short, you can define the specific challenges that need to be addressed. Translate your goals into the language of software features. Are you after predictive analytics for smarter collections? Or is invoice tracking leading your pack?
Key Areas to Evaluate:
- Common Pain Points
- Document the most time-consuming and error-prone tasks, such as manual invoice delivery, data entry, and payment reconciliation.
- Interview your AR team to uncover recurring issues and analyze historical data to identify inefficiencies.
- Gaps in Efficiency
- Map out your existing AR workflow from invoice creation to payment collection and reconciliation.
- Identify bottlenecks such as delays caused by manual approvals or missing documentation.
- Customer Experience Challenges
- Collect customer feedback on their experience with your billing and payment processes.
- Identify pain points such as unclear invoices, limited payment options, or misapplied payments.
By systematically evaluating these areas, you can establish a clear baseline for improvement.
AR Automation Is Key
Forget manual data entry and reminders—automation is a game-changer in accounts receivable. AR automation integrates advanced technologies such as artificial intelligence (AI), machine learning, and cloud-based platforms into every aspect of the AR process, turning fragmented workflows into a unified, efficient system.
Here’s how automation can restructure core AR processes:
- Invoice Presentment Switch from manual to automated invoice delivery through multiple channels like email and customer portals. Automation tools also validate invoices for compliance and accuracy, ensuring faster delivery cycles and reducing errors.
- Payment Processing Automated payment systems provide customers with a range of secure payment methods, while instantly reconciling payments to their respective invoices. This eliminates bottlenecks and accelerates revenue recognition.
- Collections Management Advanced AR automation software uses predictive analytics to prioritize at-risk accounts and personalize collection reminders. Real-time dashboards display overdue accounts, helping your team focus on what matters most.
- Credit and Risk Management AR automation tools assess customer creditworthiness using real-time data and predictive analytics, enabling more informed decisions about extending credit. Automation also monitors risk factors, flagging potential issues early and reducing exposure to bad debt.
- Cash Application Automated cash application systems match incoming payments to invoices with high accuracy, even when remittance data is incomplete. This minimizes manual intervention, reduces errors, and speeds up the reconciliation process, giving your team better visibility into cash flow.
Researching Accounts Receivable Software
Choosing the right AR solution requires careful consideration of features, vendor capabilities, and long-term scalability. Here are key factors to evaluate:
- Integration with existing and new systems is non-negotiable. Ask solutions providers about their ability to integrate with your existing systems, such as ERP. This ensures real-time data exchange, reducing errors and data silos. In the absence of this, the software may create complications, rather than solve problems. Additionally, ensure it offers interoperability with government platforms and third-party networks for a more cohesive and efficient workflow.
- Consider the extent of its automation features. At a minimum, AR automation software should include tools for automated invoice processing and tracking, seamless payment handling, and a user-friendly customer portal. Additionally, prioritize solutions that offer AI-powered features like exception handling to enhance efficiency.
- The importance of security has never been greater. Confirm that the AR software adheres to the latest security protocols. Ask how it protects sensitive financial data and mitigates fraud. Additionally, inquire about the provider’s cybersecurity measures, such as encryption, multi-factor authentication (MFA), and incident response planning. Look for certifications like SOC 2 or ISO 27001.
- Make informed decisions with experts and users insights. Leverage industry reports and user reviews to compare top solutions. Expert platforms like G2 and Gartner provide valuable insights. G2’s user-generated reviews provide real-world feedback on software performance in various contexts, while Gartner’s Magic Quadrant identifies market leaders and challengers. Using these resources refines your shortlist and ensures your decision is informed by trusted, well-rounded perspectives.
- Support & Training. Ensure the provider offers onboarding resources, training programs, and ongoing support. Confirm whether providers offer dedicated account managers, troubleshooting resources, and user training to guarantee a smooth transition and long-term success.
- Scalability. The solution should accommodate growth and evolving business needs. Each solution should offer configurable workflows and modular features to adapt to evolving requirements.
Building a Business Case for AR Automation
Adopting AR software is an investment, and building a strong business case can help secure leadership support. Progressing through the stages of AR transformation – from Status Quo to Optimized – requires demonstrating how automation will address inefficiencies, enhance customer satisfaction, and deliver measurable results.
The AR transformation journey consists of four stages:
- Status quo: AR processes are fragmented, manual, and inefficient, leading to increased costs and extended Days to Pay (DTP).
- Automated: AR automation streamlines workflows, increasing efficiency, reducing costs, and improving productivity.
- Holistic: Integrated, end-to-end Order-to-Cash (O2C) solutions enhance financial health, mitigate risk, and delight customers.
- Optimized: Predictive insights and behavioral data enable faster payments, efficient growth, and position AR as a profit center.
Your organization’s current stage defines the opportunities available to you. The goal is to create a business case that aligns with your stage while highlighting the benefits of achieving optimized AR processes. This should include tangible ROI factors such as cost savings and improved cash flow, as well as strategic benefits like enhanced customer experience and better risk management.
Transform AR with the Right Tools
Selecting the right accounts receivable software isn’t just about solving today’s challenges—it’s about future-proofing your company. A well-chosen solution will position your organization to scale effortlessly, improve cash flow, and strengthen customer satisfaction.
This blog post has only scratched the surface of what you need to know to choose the right AR software in 2025. For a more in-depth look at assessing your needs, evaluating key features, and making an informed decision, download the Billtrust AR Buyers Guide today!
Your next step toward AR transformation is just a click away.
