Managing accounts receivable shouldn't be so hard, but for many finance teams, it can be. That fact comes with consequences. For example, mid-sized companies across industries are struggling, with just 5% having fully automated their AR processes. And they can suffer financially because of that too, e.g., 84% of healthcare organizations are losing money due to outdated AR processes.

The real cost of legacy AR systems goes beyond the obvious inefficiencies, when teams spend too much time on manual tasks, working with fragmented systems that are not connected to each other. That affects everything from cash flow to customer relationships.

But companies that have made the switch to automated AR systems are seeing real results, as many as 91% report increased savings and better cash flow. AI-driven automation is changing the game, making it possible to handle everything from instant invoice generation to smart payment matching.

This article will show you how modern AR automation addresses these challenges (compared to legacy AR processes), giving your team the tools they need to work smarter and get paid faster. Let’s start with legacy AR challenges.

1. Outdated Technology

Managing accounts receivable with legacy systems is a bit like trying to run a modern business with tools from another era (imagine having a Zoom call on dialup connection?). Manual processes eat up valuable time, and the constant need to double-check for errors makes everything slower, many finance teams spending hours on tasks that could take minutes with the right technology.

Data shows that businesses are losing money and time. Teams get caught up in administrative work when they could be focusing on growth. Yet sometimes trying to update these old systems often leads to expensive migration projects and compatibility headaches.

There's a different way, though: AI-driven automation that is changing how businesses handle their AR processes. Modern platforms like Fazeshift can transform your billing cycle from a time-consuming hassle into a smooth, automated workflow, which means less manual work, better visibility and fewer mistakes.

2. Breaking Down Data Silos: The Integration Challenge

Working with disconnected AR systems is frustrating. Your team probably knows the feeling — jumping between different dashboards, trying to piece together information from different sources. And it's costly too. Data silos waste $3.1 trillion globally each year, affecting businesses of all sizes.

When your systems don't talk to each other, it creates real problems:

• Your finance team spends too much time tracking down information.
• Payment processing gets delayed because data isn't readily available.
• Customer relationships suffer when simple questions take too long to answer.

AI automation helps solve these challenges. It connects your systems so information flows smoothly, and your team can find what they need quickly. Your customers get timely reminders about payments, and they can pay however they want — all through one system.

‍3. Increased Manual Tasks

Let's talk about something that's probably familiar to your finance team — the daily grind of manual AR tasks, when your team spends hours on data entry, invoice creation, and payment tracking. Lots of manual labor leads to increased risks of error, at least that explains why 61% of late payments happen because of incorrect invoices.

When you're doing everything by hand, mistakes happen: wrong numbers on invoices, payment records that get misplaced, and long hours spent trying to figure out what went wrong to fix these issues. Days of valuable time wasted.

AI automation changes this equation. With proactive AI payment reminders and smart matching systems, your team can step away from the repetitive tasks. The technology watches for unusual patterns that might signal problems, and handles the day-to-day tasks automatically.

4. Longer Processing Times

Slow processing creates a chain reaction in your business. When cash application takes too long, everything else slows down too. We've seen this across industries — manufacturers waiting a month to match payments and service companies struggling to maintain cash flow.

AI helps you improve AR collection periods in several ways:

• It flags potential delays before they become problems.
• It learns from past payment patterns to help you collect more efficiently.
• It speeds up the whole process, from invoice to payment.

When you can process payments faster, you'll see the difference in your cash flow, which will inevitably lead to more opportunities for your business growth.

‍5. Higher Costs

When we talk about the cost of legacy AR systems, there are the obvious expenses — paper invoices, manual data entry, and the extra staff hours needed to handle it all, but there’re also the hidden costs that really add up.

Take those paper invoices, for instance. Every time someone has to manually enter data, there's a chance for errors, and each mistake can start a whole chain of problems: payment disputes, longer payment cycles, and more time spent fixing things that could've been right the first time.

Not to mention that your well-compensated finance team is spending their days on routine tasks when they could be working on growing your business, analyzing trends or spotting new revenue opportunities.

Now while modernizing legacy AE sounds expensive, AI automation can work with your current systems — so you don't need to pay a fortune to replace everything and start saving money. You can think of this process as adding a smart layer to your existing setup: then automation handles the repetitive work, catches errors before they cause problems, and helps you get paid faster.

Why Switch to AI-Driven AR Automation?

Modern AR automation makes your entire accounts receivable process work better for everyone involved. And the results speak for themselves: 75% of companies say automation helps them give their customers a better experience.

The Real Benefits of AI in AR

What can that mean for your business? When you bring AI into your AR process, you're going to see changes quickly. Your team won't have to spend hours on manual data entry anymore — they can focus on work that actually grows your business. Those annoying little errors in invoices are being caught before they become problems.

The technology also learns from your data to spot patterns in how customers pay, and helps you plan better. You'll get accurate reports when you need them, and you can scale up without having to hire more people to handle the workload.

With AI you can also set up customer support: so that your client or partners can get answers to their questions anytime, even outside business hours. The system can send them friendly reminders about payments and help them with simple questions right away. That means happier customers and fewer delays in getting paid.

Making AI Work for Your Business

The great thing about modern AI-based AR systems is how well they fit into what your current workflow: whether you're using Salesforce, NetSuite, or something else, AI can get plugged right in.

Machine learning helps you spot trends in payment behavior, so you can be more proactive about collecting payments. The natural language processing makes all your customer communications clearer and more effective. And when your business grows or changes, the system grows with you and finance teams can actually plan for the future instead of just keeping up with daily tasks and chasing errors.

Conclusion

When you're dealing with AR challenges every day, it's easy to think "that's just how it works." But modern businesses need modern solutions. Outdated AR processes create a chain of challenges — from data silos and manual tasks to slower processing times and higher costs.

AI automation offers a different path that doesn’t even require replacing your system, but just making what you already have work better. Your team can spend less time on manual tasks and more time on strategic work. Your customers get a smoother payment experience. And your data actually works for you, helping you make better decisions.

Want to see how AI automation could fit into your AR process? Schedule a demo with our team. We'll show you exactly how it works with your existing systems and answer any questions you have about implementation.

‍