Cash flow and forecasting go hand-in-hand. Stronger cash flow monitoring and management create clearer patterns for forecasting, and better forecasting leads to smarter decisions that can accelerate cash flow. It’s a tight loop, and with today’s macroeconomic pressures, cash flow optimization matters more than ever. Consider that 63% of finance decision makers have recently shifted to a more conservative cash management approach.
It can be hard to know exactly how much working capital you’ll have to meet payroll, cover operating expenses, or avoid emergency borrowing. This is the state 70% of organizations are currently in, according to Ernst & Young.
If you want more accurate forecasting and stronger cash flow, the biggest wins come from removing latency and data silos across your order-to-cash (O2C) cycle. The right accounts receivable (AR) platform improves this by automating manual processes, centralizing data, and providing the real-time data visibility forecasting needs.
Cash Flow Forecasting: Features and Capabilities to Look For
The following features and capabilities are instrumental for improving cash flow and forecasting accuracy:
- Automation that unclogs the places where cash gets “stuck,” helping data and management procedures flow cleanly.
- Data centralization that reduces variability, strengthens consistency, and sets the stage for more predictable cash outcomes.
- AI that spots the early warning signs of financial risk, surfaces actionable insights, and makes mitigation as well as forecasting more proactive and precise.
How does AR automation software help me improve my cash flow forecasting?
Automation gives forecasting what it needs most: consistent data. If the data feeding your forecast is inconsistent or inaccurate, predictions will be unreliable.
If invoices don’t consistently go out on time, your system might think customers are paying slower. If payments are posted right away one week but sit in a backlog the next, your forecast might show big swings in cash received that have nothing to do with actual customer behavior. If collectors reach out consistently, you’ll see a predictable payment curve. If follow-up depends on who’s busy or who remembered, the data becomes messy and forecasting becomes guesswork.
43% of finance leaders have used AR automation software to make cash flow more predictable. Get the Wakefield Research study.
Automation takes all of these variables out of the equation. Invoices go out when they’re supposed to. Reminders fire when they should. Payments get applied almost immediately. When everything moves through the system the same way every time, cash moves faster and forecasting becomes more accurate and trustworthy.
Everyone is using AI. How can AI help my team forecast cash flow with greater confidence?
AI-powered cash flow forecasting models have been proven to reduce error rates by up to 50% compared to traditional methods. So, it’s no wonder 55% of financial leaders are implementing AI-powered financial forecasting and scenario planning.
55% of financial leaders are implementing AI-powered financial forecasting and scenario planning
As AI ingests live data from every touchpoint, it constantly monitors activity across your O2C cycle to guide you with a clear, informed view of your financials. It can spot behavioral shifts early, recalibrate continuously as new data and patterns hit, and deliver far more accurate predictions. A major customer has a payment delay? A region hits a cash crunch? AI models the impact instantly, giving you a confident, data-driven view of what’s coming.
AI Cash Flow Forecasting: How to Spot Advanced Automation
Look for an AR platform that’s sophisticated enough to support GenAI and Agentic AI for financial forecasts and advice. With GenAI, you can ask anything about your organization’s financials. For example, “Which customers are trending late and likely to impact this month’s forecast?” AI will correlate data across your invoicing, payments, and buyer profiles to deliver a clear, actionable answer instantly. It’s like ChatGPT, but for AR. Questions that normally require the efforts of multiple people — pulling data from multiple places using periodic (no real-time) reports — are handled in seconds.
How does that work? Agentic AI for finance – in simplest terms, a set of AI assistants or agents that work together behind the scenes to reason through your financial request and surface the insights you need. It sounds very I, Robot, but it’s much simpler and more controlled than that. Each agent has a specific job, clear guardrails for acting responsibly. Learn more about responsible AI here.
Billtrust’s AI intelligence layer, Insight360, delivers productivity gains of up to 80%. It’s built right into the AR automation software platform, which means no extra tools to learn, workflows to rebuild, or integrations are necessary. Your team benefits instantly without having to change how they work.
Research shows that, while only 6% of finance leaders currently use Agentic AI, 38% intend to adopt it within the next 12 months. By 2028, 75% of finance leaders expect it to become a routine part of operations.
Want to become an expert on agentic AI for finance? Read this guide.
How does AR automation software help accelerate cash flow?
Cash flow improves the moment you shorten the time between invoice and payment, and your biggest lever is automation. Research backs it up: a new study from Vanson Bourne found that organizations with high levels of automation in their AR processes report over 40% reductions in Days Sales Outstanding (DSO) and Days to Pay (DTP).
Here’s how those reductions happen.
- Automated invoicing. The moment your ERP marks an order as ready, the AR platform generates the invoice, applies the right customer template, and delivers it automatically through their preferred channel (PDF via email, AP portal upload, EDI, attachments, file naming rules, subject lines, etc.). No batching, no bottlenecks, and best of all, no manual formatting or trying to remember logins for client AP portals. The most advanced AR automation software platforms also handle eInvoicing compliance – often necessary for international trade.
- Automated cash application. Thanks to machine learning, the platform ingests payment data and instantly pairs it with open invoices using pre-set rules or – using more advanced AI – confidence-based matching. Only true exceptions are flagged, giving you a real-time, accurate cash position to forecast from. Learn more about Billtrust’s AI-powered cash application tools.
- Automated dispute capture and routing. Disputes are captured, categorized, and routed to the appropriate person automatically, keeping your cash flow and forecast aligned with what’s happening in real-time. Plus, all disputes and their related documents are centralized in a single platform where everyone working across the AR lifecycle can see them. Advanced automation capabilities will even pause dunning schedules when a dispute is raised.
- Automated payment reminders and collections workflows. Think of it like this: More predictable outreach = more predictable customer payment patterns = more predictable forecasting. AI-driven automation makes this possible by building prioritized worklists based on payment behaviors, financial risk, as well as aging and then making intelligent recommendations on how to reach debtors at the right times and through the right channels for improved response rates that lower bad debt.
- Want to improve even more? Enable digital payments. As customers move to virtual cards and ACH, giving them a fast, easy way to pay feeds your automated processes with cleaner, real-time data – accelerating cash and sharpening forecasts. See how Billtrust helps increase digital payments by 40% while lowering payment processing costs by an average 30%.
What causes inaccurate cash flow forecasting?
Forecasting is only as good as the data feeding it. When forecasts miss the mark, it’s rarely because of the math. The primary culprit is the input: the data quality and disconnected systems causing data latency. When finance teams rely on static spreadsheets, they’re often looking at a snapshot of the business that is already days or weeks old.
Common drivers of inaccuracy include:
- Data silos: When payment data, dispute information, and sales projections live in different systems (ERP systems, Bank Portals, CRM systems) that don’t communicate, companies lack a single source of truth. Even when data siloes are connected, data quality can become an issue when multi-source data doesn’t match or doesn’t reconcile due to discrepancies or different formats.
- Human error: Manual data entry and spreadsheet formula errors are inevitable when humans are forced to bridge the gap between systems.
- Optimism bias: Relying on qualitative feedback from sales teams regarding when a deal will close or a check will arrive, rather than quantitative behavioral data.
- Hidden disputes: If a customer disputes an invoice via email and it isn’t logged immediately in a system that offers total visibility, the forecast will incorrectly anticipate that cash arriving on time.
Manual vs Automated Cash Flow Forecasting
| Feature | Manual Forecasting | Automated Forecasting |
| Approach | Inherently reactive: Reacts to data after the accounting period closes. | Proactive & dynamic: Anticipates changes as they happen. |
| Data Source | Periodic reports and static spreadsheets: Relies on exporting historical data, which is often outdated by the time it is analyzed. | Real-time streams: Connects directly to AR activity for a continuous flow of live data. |
| Accuracy | Prone to error: High risk of “fat-finger” formulas and data entry mistakes. | High precision: Automated data capture eliminates human error variables and data latency. |
| Team Focus | Gathering data: Labor-intensive compilation of reports from disparate systems. | Analyzing data: Time is spent on strategy and decision-making rather than data entry. |
| The Core Question | “Based on what happened last month, what might happen next?” | “Based on what is happening right now, what will our cash position be next week?” |
What are the best software options for a company looking to improve its working capital management?
Working capital optimization has jumped from the #7 priority in 2022-2023 to the #1 priority for CFOs for 2025, according to the Hackett Group’s Working Capital Survey. This isn’t a surprise: in environments of market unpredictability, financial liquidity has become the primary buffer against corporate risk. Working capital can offset risks of all types: natural market swings, tariffs, currency fluctuations, and more.
To truly improve working capital, finance leaders are zeroing in on how long it takes the organization to move from a sale to an invoice to cash in the bank. CFOs look beyond standard ERP system capabilities to specialized accounts receivable automation software that accelerates the entire order-to-cash cycle. The most effective options enable financial liquidity resilience by eliminating the manual bottlenecks that trap cash inside the AR process.
Optimizing Working Capital: AI Automation Features to Look for
- Automated invoicing and payments: You’ll need an AR software platform that does more than just send bills. The best options centralize delivery across all channels (AP portals, email, print) to ensure immediate receipt, directly reducing DSO. Automation solutions build financial liquidity resilience by offering a wide range of buyer-preferred payment methods. Simultaneously, they utilize AI intelligent surcharging features to offset credit card fees and virtual card processing fees. This preserves profit margins at times when buyers favor credit as a means to boost their purchasing power.
- Agentic AI collections: Static dunning schedules and dunning letters are considered obsolete today. Top-tier software now utilizes Agentic Procedures to revolutionize payment reminder outreach. Unlike rigid email schedules, these AI agents analyze buyer behavior across the portfolio to dynamically recommend the optimal mix for outreach. This includes communication channel, timing, and cadence for every overdue account.
This precision at scale allows collectors to prioritize high-risk accounts with high-touch actions while automating gentle nudges for low-risk payers. By keeping a human in the loop to validate AI recommendations, finance leaders maintain control while reducing DSO by up to 25%. This AI-intelligent strategy is also known to foster customer loyalty – a critical strategy for maintaining financial stability during economic turbulence. - High-velocity cash application: Leading cash application solutions utilize confidence-based AI matching to reconcile payments instantly, even when remittance data is decoupled or incomplete. This eliminates the cash lag, providing CFOs with the real-time visibility needed to make agile capital allocation decisions.
Learn more about managing working capital during economic headwinds with these resources:
What tools help my finance team get a clearer picture of our daily cash flow and financial forecast?
Cash flow management and forecasting thrive off having all data in one place, in real-time. Most AR teams don’t have that. Their data lives in too many systems: invoices in the ERP, payments in the bank portal, disputes in emails or spreadsheets, etc. By the time it’s all pieced together, the picture is outdated.
Data centralization fixes this by providing a single source of truth for your entire O2C cycle – and thus, a full, accurate view of your cash position and customer behavior. Instead of jumping between your ERP, banking portals, customer portals, spreadsheets, and email threads, your entire AR process is pulled into one continuous flow. When a payment hits, you see it. When a dispute is raised, it appears instantly. When a customer views an invoice, schedules a payment, or responds to a reminder, it’s captured automatically. No more stitching together reports or figuring out what’s missing.
Not every platform is created equally though.
A Clearer Picture of Cash Flow Starts with Deep Integration
Most AR tools “integrate” in a loose sense of the word, meaning they can pick up a few data points from an ERP system or export a file. However, many can’t push data fields back into the ERP system, connect to a payment gateway, or integrate with client AP portals. You’ll want an AR platform that’s built to sit in the flow of your process end-to-end.
That means direct connectivity with your ERP, bank data, payment networks, customer portals, and delivery methods. It’s critical that you don’t have any stray systems, which is why extensive integration support is vital.
Billtrust has 260+ AP portal connectors and 40+ connectors to ERPs, banks, and financial institutions. Or you can work with our experts to establish a custom integration. Whatever you need to connect to make data flow, we’ll make it happen.
Centralization inside Billtrust also means your data is standardized. Everything is formatted, labeled, structured, and stored in the same way across the entire system – providing clean, reliable data you can forecast from. That consistency is what forecasting depends on. It lets you see true payment patterns instead of noise from scattered systems or inconsistent internal processes.
Why should I trust Billtrust to help with my cash flow optimization and financial forecasting?
In handling $1T in AR transactions annually data from 13M+ buyers, Billtrust knows what it takes to deliver accurate forecasts with context most ERPs and point solution can’t: richer behavioral insight, unmatched benchmarking, and the clearest picture of where you stand. Less guessing. Less stress. More cash.
