New A/R Benchmarks: How Manual is Your Process Still?

If your Accounts Receivable (A/R) process still includes manual steps, you’re not the only one. Not by far. Recent A/R benchmarks highlight how many companies are struggling with outdated systems and limited automation capabilities.

About 70% of companies still lack fully automated A/R, with 43% admitting to manual invoice reconciliation practices leading to costly delays and errors, says a recent report by Gitnux. It’s become an increasingly costly friction point in a high-interest economy.

Today’s A/R Benchmarks

Despite the development of more sophisticated automation platforms, many A/R teams are caught in a cycle of outdated workflows and below key A/R benchmarks. In many cases, teams have access to partial automation, but it’s applied inconsistently across the invoicing and collections lifecycle. For example, invoices may be generated digitally but still require manual review or follow-up.

Another overlooked issue is the fragmentation of systems across departments. Sales teams may input customer data differently than finance teams process it, possibly leading to inconsistencies that have to be corrected manually. Invoices that are sent via email might still require someone to export PDFs, attach files, and track responses in a separate spreadsheet. These hybrid processes aren’t fully manual, but they aren’t automated either.

Additionally, teams are often reluctant to abandon legacy systems that feel familiar, even when they’re inefficient. Change management can be a real barrier to modernization, especially in departments where key processes haven’t changed in years. In some organizations, even routine updates to billing procedures require multiple layers of approval, further slowing down progress.

Technology Limitations Keeping A/R Processes Manual

About 50% of finance teams claim that integration challenges with legacy systems are their biggest obstacles in A/R modernization efforts, according to the State of AR Automation survey. Further challenges include the cost of change (45%) and strained IT resources (41%).

These bottlenecks result in burnout, which can hurt accuracy and performance of your staff. BlackLine’s report states that 43% of credit managers spend extensive lengths of time fixing errors, while nearly 36% note payment volume pressures. In the meantime, legacy systems limit visibility, delay dispute resolution, and leave teams chasing paperwork and A/R benchmarks.

Setting Goals for Automation

As you plan for this year, modernization should be a priority. Here’s what automation can deliver for your department and the company:

1. Optimizing Working Capital

Companies that adopt electronic invoicing can reduce Days Sales Outstanding (DSO) by up to 22%, which lowers financing costs and frees up funds, says Gitnux. That improvement alone can offset automation investments.

2. Boost Efficiency & Focus

Skynova found that 57% of invoice data is still processed manually. Eliminating this frees staff to tackle analysis and more customer-focused tasks.

Another study revealed that 93% of mid-sized firms plan to increase A/P and A/R automation, yet only 5% are fully automated as of now, which highlights an enormous runway for improvement.

3. Elevate Customer Experience

Sage reports that 39% of invoices are still paid late in the U.S., and 61% of late payments are triggered by administrative errors or billing issues. Automated systems that come with clear invoices, self-service portals, and scheduled reminders can enhance satisfaction and on-time payment rates.

Where to Start

If your team is ready to upgrade, start by identifying bottlenecks. Are your invoices going out on time? Are follow-ups happening automatically or manually? Are customer disputes slowing down collections? Consult with your A/R staff and work with them to develop A/R benchmarks – and a plan of attack. They tend to know where the inefficiencies lie.

Consider exploring cloud-based solutions like HighRadius, Billtrust, or Versapay. They offer plug-and-play automation designed for mid-market and enterprise finance teams.