AR automation is changing how businesses handle their finances in a big way. And it's growing fast, with the U.S. market expected to hit $1.38 billion by 2030. That's a great opportunity for companies looking to cut costs and work smarter.

If you're running an AR team, you probably know the headaches: rising invoice volumes, pressure to improve cash flow, and the constant challenge of doing more with your existing team. It's tough to keep up when manual processes eat up so much time and money.

But there's good news. Companies that switch to automated AR are seeing good results — 87% report faster processing and better team efficiency. And you don't have to be a huge enterprise to get these benefits. More and more mid-market companies are jumping in and seeing their AR teams transform from paper-pushers to strategic players.

In this article, we'll show you 5 practical ways to use AI automation to cut your AR labor costs. These aren't just minor tweaks — they're proven approaches that can help you free up your team's time, reduce errors, and get more done with less effort. Whether you're dealing with a growing invoice load or just want to make your AR process more efficient, you'll find something here that can help.

How AR Automation Works (And Why It Matters)

Technology is changing AR really fast — by 2027, 50% of business decisions will use AI, and AR teams are right in the middle of this change. You might be wondering what this means for your day-to-day operations. Let’s break it down.

The Basics of AR Automation

AR automation is pretty straightforward — it's about using proper technology to handle all those time-consuming tasks that eat up your team's day. And it's more than just sending out invoices (though it does that really well). The system works with your contracts to create invoices automatically, keeps track of when payments come in, and connects everything together.

What Makes AR Automation Different

One of the great things about modern AR automation is how it handles payments. Your team probably spends a lot of time matching payments to invoices — it's tough work, and mistakes can happen. But AI systems are just really good at this kind of things. They can spot patterns, match payments correctly, and even predict when you might have payment issues.

Why Cash Flow Matters More Than Ever

Managing cash flow isn't just about keeping the lights on — it's about giving your business room to grow. With automated AR, you can see exactly what's happening with your money in real time. That's valuable when you need to make quick decisions. And when your AR team isn't buried in paperwork, they can focus on more important things, like working with customers and finding ways to improve processes.

Automation doesn't just save time — it helps your whole business run better. Your team can handle more invoices without getting overwhelmed, spot potential issues before they become problems, and scale up operations without having to hire a bunch of new people. And that's just the start of what these systems can do.

1. Streamline Your Workflows with AI

Let's talk about how AI can make your AR process a whole lot easier. It's pretty amazing — AI can cut down the time you spend on cash applications by 75%. That's a lot of hours your team gets back for more important work.

Making Invoicing Better

We all know how tough it is to handle invoices the old way. You've probably dealt with those long hours of manual data entry — it's tedious, and mistakes happen. But here's something different: AI can read your contracts and create invoices automatically. And it does a really good job at it too.

Here are a few ways AI makes things easier:

1. Creates invoices right from your contracts
2. Sends payment reminders when they're needed (and knows when to send them)
3. Spots mistakes before they cause problems
4. Matches payments correctly the first time

Getting Payments Sorted Out

The payment matching part is where AI comes in very handy. Instead of spending hours trying to figure out which payment goes with which invoice, AI just does it for you. You'll see the difference right away — your team won't have to deal with all those spreadsheets and manual checks anymore.

Making Complex Things Simple

Know those tricky billing situations that usually give everyone a headache? Well, AI is just really good at handling them. Whether you're dealing with different payment types or complicated billing terms, the system keeps track of everything. Your team probably spends a lot of time on these tasks now, but they won't have to anymore.

All of this means your AR team can focus on working with customers and solving real problems instead of just pushing paper around. That's not only good for the morale of your team, but your business will be more efficient and profitable

2. Building Better Customer Relationships with AI

When you're handling AR, keeping customers happy while getting paid on time can be tricky. AI makes this a whole lot easier by helping your team stay on top of communications and spot potential issues before they become problems.

Making Communication Work Better

Your customers probably like to know what's going on with their accounts — AI can help with that. It's pretty simple: the system sends updates about payments automatically, and each message feels personal because it's based on what that customer usually does. And when customers can check their own account info easily, they don't have to call your team for every little thing.

Knowing Your Customers Better

It's good to know how your customers usually handle their payments. AI is really good at spotting patterns — like which customers always pay early and which ones might need a friendly reminder.

3. Getting Smart About Cost Savings

Companies that use AI for most of their AR work are seeing substantial benefits — they're getting paid 19 days faster. And when you're getting paid faster, that means your team can spend less time chasing payments and more time on important work.

Making Your Money Work Better

Here's what automation can do for your business:

1. Cut down on overtime costs
2. Make training new people easier
3. Help your current team handle more work
4. Give you better info about who owes what and when

Keeping Track of What Matters

Getting paid faster (what we call DSO) is vital for any business. When you use AI to keep track of this, you can:

• See right away if payments are slowing down
• Figure out which payment terms work best
• Keep your cash flow healthy

And well, the proof is in the numbers — 85% of CFOs who automated their AR saw their payment times improve. That's pretty impressive, and it shows just how much of a difference the right tools can make.

4. Smart Implementation Reduces Training Time and Costs

Change can be tough on your AR team, but it doesn't have to be expensive. With only 17% of small firms currently using automation, many teams worry about the transition. And well, that's pretty normal — new tech can feel overwhelming at first.

The key to cutting costs during implementation is having a solid plan. Your team probably worries about learning new systems while keeping up with their daily work. But with the right approach, you can actually reduce training costs and time. Great automation software works with your existing tools, so your team already knows the basics.

Security's a big part of keeping costs down too. When you've got good security from the start — things like encrypted data and proper access controls — you don't have to spend money fixing problems later. And your team can work confidently, knowing everything's protected.

5. Scale Your AR Without Adding Headcount

Your AR process needs to handle more volume as your business grows, but that doesn't mean you need more people. Modern AI automation is efficient at handling bigger workloads without missing a beat.

The right system grows with you, working smoothly with tools like Salesforce and NetSuite. It handles those complex billing situations that usually need extra staff, and keeps everything running efficiently even when volume goes up. Your team can focus on handling exceptions and working with customers instead of just pushing paper around.

A good system should:

• Work with what you already have
• Be easy to use
• Provide insights into what's happening with your money
• Let you add features when you need them

The system should also be really flexible with your specific billing processes. Every business handles billing a bit differently, and your automation needs to work your way. And integrations are a must-have too — the best systems just click right into tools like Salesforce and NetSuite without any fuss.

A user-friendly interface makes a big difference in keeping labor costs down. When your team can learn the system quickly, you're saving on training time and getting better results faster. Plus, having good analytics at your fingertips means your team can spot trends and handle issues before they become problems.

The right system grows with your business without making things complicated. You want something that's going to make your life easier, both now and down the road. Good AI automation plugs right into your current setup, so you can scale up without disrupting what works. That means better efficiency without the usual growing pains of adding more people to the team.

What's Next for Your AR Process?

Every day your team spends matching payments, chasing invoices, and handling customer questions is a day they could be doing more valuable work. That's where Fazeshift comes in — our AI automation works with your existing systems to make everything run more smoothly. You don't have to replace your whole system to get started. Fazeshift plugs right into tools like Salesforce and NetSuite, so your team can keep using what they know while adding automation that makes their jobs easier.

Want to see how Fazeshift could work for your AR team? Schedule a demo and we'll show you exactly how our AI automation fits and improves your current process.

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