AI in Accounts Receivable: Driving Finance Efficiency & Growth

GUEST POST by: Brandon Spear (CEO of TreviPay)

Accounts Receivable (A/R) has historically been perceived as a burdensome, labor-intensive, and often slow administrative process. The meticulous task of matching receipts to ledgers and reconciling payments typically diverts valuable resources from more strategic activities such as in-depth financial analysis and forward-looking planning. However, with the advent of artificial intelligence (AI), the landscape of A/R is undergoing a profound transformation, evolving from a reactive necessity into a powerful, predictive engine for financial health and growth.

Despite the clear advantages of automation, a significant portion of businesses, nearly 85% according to a recent industry study, continue to grapple with partially manual A/R operations. This adherence to traditional methods persists even in the face of compelling evidence demonstrating that automation can dramatically improve cash-flow predictability and reduce Days Sales Outstanding (DSO) by double-digit percentages. Organizations that have ventured beyond basic digitization within their back-office functions are now reporting tangible benefits, including accelerated payment cycles, a notable reduction in write-offs, and a more efficient allocation of their finance team's expertise. The modernization of A/R transcends mere technological adoption; it necessitates a fundamental shift in perspective among finance leaders, who must begin to view receivables not as a mere cost center but as a strategic catalyst for business expansion, enhanced customer loyalty, and optimized working capital efficiency.

Putting Buyer Preferences First for Enhanced Loyalty

In today's competitive business-to-business (B2B) landscape, suppliers who adeptly align their payment processes with their customers' purchasing preferences are invariably rewarded with stronger commercial relationships and recurring business. This alignment encompasses offering flexible payment terms, delivering invoices in the buyer's preferred format, and ensuring seamless integration with existing procurement systems. Among the most potent tools for fostering loyalty in B2B commerce, offering trade credit stands out as particularly effective.

AI-enabled A/R systems further solidify this crucial alignment by meticulously minimizing friction at every stage of the payment journey. Intelligent, or "zero-touch," systems possess the capability to automatically reorder invoice data to precisely match a buyer's purchase order template or validate that the correct billing entity is utilized. While these adjustments may appear minor in isolation, their cumulative effect across millions of transactions can significantly influence working capital by preventing rejections and payment delays. A critical insight from a recent payments salon in NYC emphasized the importance of grounding innovation in B2B buyer needs. As a global customer experience leader noted, many transformation efforts fall short because they fail to place the end-user at the absolute center of their design. The impact of such customer-centric innovation is dual-fold: it yields both operational efficiencies and strengthens relational bonds. By systematically removing barriers to payment, suppliers transform into more amenable partners, a factor that directly correlates with an expanded share of wallet from their most valued customers.

The Undisclosed Costs of Late Payments

While payment terms naturally vary across different industries – retailers, for instance, might negotiate 120-day terms, whereas manufacturers typically operate within a 60-90 day window – delays consistently extend beyond initial expectations. Alarmingly, for 86% of businesses, up to 30% of their monthly invoiced sales remain overdue. This pervasive issue can severely impede cash flow, disrupt critical operational efficiencies, and ultimately lead to a precarious state of financial instability.

Late payments are more than a mere inconvenience; they represent a tangible and substantial cost to businesses. In an environment characterized by elevated interest rates, every delayed dollar effectively increases the cost of capital, thereby constraining opportunities for growth-oriented investments. When engaging with new clients, it is not uncommon to observe 20-30% of their receivables exceeding 30 days past due. The implementation of intelligent A/R processes, however, can swiftly reduce this figure to below 3%. This dramatic improvement is largely attributable to enhanced accuracy at the source: ensuring that invoices are meticulously complete, correctly formatted, and routed to the precise destination. This proactive approach significantly reduces downstream disputes, thereby accelerating payment collection and bolstering the reliability of financial forecasting.

Proactive Detection of Customer Distress

Furthermore, AI plays a pivotal role in identifying nascent indicators of customer distress. For instance, an AI system can flag a round-number payment (e.g., $5,000) against an invoice with a non-round total (e.g., $8,798), or a sudden shift in payment method from ACH to traditional paper checks. Such anomalies frequently signal underlying cash-flow pressures within the customer's operations, indicating a deliberate delay in payment. When these patterns are automatically identified and flagged by intelligent systems, finance leaders are empowered to act pre-emptively, allowing them to tighten credit exposure, adjust payment plans, or strategically re-prioritize collection efforts before a minor issue escalates into a significant financial problem.

Shifting Mindsets: Leveraging A/R Automation as a Growth Enabler

The fundamental shift required begins with reframing A/R automation as a powerful enabler of growth, rather than merely a project designed for cost reduction. Intelligent A/R empowers finance teams to gain a competitive edge by learning from aggregated transaction data spanning diverse industries and geographic regions, ensuring continuous improvement through each financial cycle.

Many finance teams exhibit reluctance to modernize their A/R processes, often because it is perceived as routine back-office work, despite its direct influence on customer experience, retention rates, and overall capital efficiency. Research from McKinsey highlights that companies integrating predictive analytics into their order-to-cash processes can enhance working capital efficiency by 30% or more, often within a matter of weeks.

Practical Steps for Finance Leaders

As we look towards 2026, finance leaders should consider several practical steps to fully leverage the potential of AI in A/R:

• Integrate A/R Systems: Forge direct integrations with key buyers to ensure invoice formats and data structures are perfectly aligned prior to delivery, minimizing discrepancies.
• Automate Credit-Risk Monitoring: Implement behavior-based scoring models to automate credit-risk monitoring, enabling early identification of at-risk customers.
• Track Operational Metrics: Diligently track critical operational metrics such as DSO compression, the percentage of invoices paid on time, and the reduction in manual touches to accurately quantify the return on automation investments.

In today’s dynamic economic climate, where the efficient management of every day of working capital is paramount, intelligent or zero-touch A/R automation provides an indispensable layer of predictability. We have decisively moved past the era of manual, slow, and resource-intensive processes, thanks to continuous technological innovations. Achieving A/R "right at the source" forms the bedrock of cash-flow stability. It not only enables companies to collect what they are owed promptly and consistently but also liberates valuable finance talent to focus on strategic growth initiatives, driving the business forward.

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 About the Author: Brandon Spear leads TreviPay with expertise in managing large, diverse global teams. His strength is discerning and focusing on the most important challenges facing an organization at a particular point in time and unifying all stakeholders behind accomplishing a set of specific goals. Brandon has a unique ability to connect across all levels of an organization, motivate staff with diverse skill sets, while ensuring a common alignment and results.