Modern finance departments face mounting pressure to optimize cash flow, reduce costs, and maintain accuracy while managing increasingly complex financial operations. While many organizations have implemented automation in either accounts payable (AP) or accounts receivable (AR), the real transformation occurs when both systems work together as an integrated financial ecosystem.
Before exploring their combined power, it's essential to understand what each automation solution delivers independently.
AP automation has proven its value across organizations of all sizes. Surveyed BILL customers report saving, on average, a whopping 50% of their time on accounts payable, demonstrating the immediate efficiency gains possible.
The financial impact extends beyond time savings. According to Ardent Partners' AP Metrics that Matter in 2023 Report, enterprises leveraging automation can reduce their invoice processing cost by 76% and make the average processing time 81% faster. Additionally, the American Productivity and Quality Center (APQC) found in an accounts payable benchmarking report that the average AP FTE (full-time equivalent, representing a full-time worker) processes 10,853 invoices every year. Not bad! But in a fully automated system, that same FTE can process 23,333 invoices annually.
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AR automation delivers equally compelling results on the revenue side. According to the B2B Payments Innovation Readiness Playbook, businesses that handle more than 20,000 invoices per month and use high levels of automated tools receive payment in 55 days on average, compared with businesses that have little or no automation, which receive payment in an average of 78 days.
The cost benefits are substantial as well. The wide range in the average cost to process a customer invoice — from $2 to $9, according to the American Productivity and Quality Center (APQC), which attributes the difference to the amount of automation in the process. Furthermore, implementing end-to-end accounts receivable automation can result in substantial cost savings, exceeding 70% in invoicing expenses.
While individual AP and AR automation systems deliver significant benefits, their true power emerges when they operate as an integrated financial ecosystem. As highlighted in one survey of CFOs and Treasurers conducted by PYMNTS and Mastercard, 80%+ believe moving to AR and AP automation solutions would reduce cost and errors in processing invoices and payments.
When AP and AR systems work together, finance teams gain unprecedented visibility into their complete cash position. Improved Cash Flow Management: One crucial aspect of financial stability is the effective management of cash flow. This integrated approach enables organizations to optimize payment timing, take advantage of early payment discounts, and maintain optimal working capital levels.
The integration also facilitates better working capital analysis. By analyzing factors such as Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO) across specific countries, regions, supplier groups, and banks, users can better determine how to optimize their own payments and invoicing practices in return.
Combined automation systems eliminate data silos and reduce duplicate data entry across departments. Increased Scalability: As your business grows, manual AR/AP processes can become a bottleneck. Automated systems can handle increased volume without a proportional increase in resources, allowing your financial operations to scale seamlessly with your business growth.
The efficiency gains compound when systems are integrated. AI and ML empower RPA to automate complex and time-consuming tasks, enabling the analysis of trends and patterns for smarter decision-making and strategic planning. This liberates employees from manual work, allowing them to focus on more meaningful, value-adding activities.
Integration enables more robust financial controls and fraud prevention. Enhanced Security and Compliance: Automation reduces the risk of fraud by limiting human touchpoints and implementing strict controls and approval workflows. When AP and AR systems share data and controls, organizations can implement more sophisticated fraud detection algorithms and maintain better audit trails.
Despite clear benefits, many organizations haven't fully embraced integrated automation. Despite these benefits, 70%+ of all invoices in the U.S. are still sent via mail, while 40% of B2B payments are made via paper check. Only 41% of companies today have automated their payables or receivables systems.
However, adoption is accelerating. In a survey by the Institute of Financial Operations and Leadership, two-thirds of finance professionals said they expect their AP departments to be fully automated by 2025. Additionally, According to Deloitte's Q4 2023 CFO Signals report, 80% of CFOs say they will embed automation and digital technologies in their finance operations in 2024.
To realize the full potential of combined AP and AR automation, organizations should focus on integration from the start. To bridge the gap between buyers and suppliers, AP and AR departments need to embrace solutions that promote automation through direct integration and allow for a seamless exchange of data and payment flow.
Key considerations include selecting platforms that offer native integration capabilities, implementing standardized approval workflows across both functions, and establishing shared KPIs that measure the health of the entire cash management cycle.
The future belongs to organizations that view AP and AR automation not as separate initiatives, but as components of a unified financial operating system. A healthy cash flow isn't simply earning more than you spend or sitting on a pile of cash. It's about ensuring your organization can react to new opportunities quickly and without breaking the bank — a key to both short- and long-term growth.
As businesses continue to digitize their operations, those who implement integrated AP and AR automation today will have a significant competitive advantage. The combination doesn't just improve individual processes—it transforms how organizations manage their entire financial ecosystem, creating a foundation for sustainable growth and operational excellence.
The question isn't whether to automate AP and AR functions, but how quickly organizations can implement integrated solutions that unlock the full potential of their financial operations. The data is clear: the compound benefits of combined automation far exceed the sum of their individual parts.