AI-Powered AR Tools for Inflationary Times

Inflation makes managing cash flow tough for businesses. Rising costs and delayed payments extend the average payment cycle to 51 days, creating challenges for working capital. AI-powered accounts receivable (AR) tools can help by automating processes, predicting payment delays, and improving cash flow by 40%. Here's how these tools make a difference:

• Faster Payment Collection: Reduce Days Sales Outstanding (DSO) by up to 20%.

• Lower Costs: Save up to 50% on operational expenses and speed up dispute resolution by 40%.

• Smarter Financial Decisions: Use real-time analytics, cash flow forecasts, and AI-driven credit risk analysis.

• Efficient Automation: Streamline invoice processing, payment matching, and customer communication.

Adopting these tools can boost efficiency, cut costs, and help businesses stay resilient during economic uncertainty. AI-driven AR tools are becoming essential for businesses to stay competitive in inflationary times.

Core Functions of AI Accounts Receivable Tools

Machine Learning and Payment Prediction

With rising inflation, machine learning is reshaping accounts receivable (AR) processes. These systems dig into historical payment data, customer behavior, and market trends to offer actionable insights. For example, a multinational bank's prototype hit 77% accuracy in predicting invoice payments .

Here's what these models can do:

• Analyze complex payment behavior

• Spot high-risk accounts

• Handle unstructured financial data

• Fine-tune collection strategies

Since 39% of businesses list forecasting as a top challenge , AI tools leverage natural language processing (NLP) to automate customer interactions and pull insights from diverse data. Predictive analytics also help assess credit risks and forecast payment trends, integrating seamlessly into broader AR automation efforts.

Key AR Process Automation Steps

AI automation transforms manual AR tasks into faster, more accurate workflows, cutting down on errors and speeding up collections. Here's how it improves key AR processes:

| Process Component | AI Automation Benefits |
| --- | --- |
| Invoice Processing | Cuts processing time from 20 hours to under 5 hours weekly |
| Payment Matching | Automates remittance matching |
| Risk Assessment | Delivers real-time credit risk insights |
| Collection Strategy | Optimizes timing and tactics for payment follow-ups

Real-world examples highlight these benefits. Glean AI, for instance, drastically improved invoice processing, reducing a workload that once needed five team members to tasks now handled by just one person .

"It used to take around 20 hours per week and a team of about 5 people to do the work Glean now helps me do alone." – Magdalena K.

To get the most out of AI-driven AR automation, businesses should:

• Identify areas ripe for automation

• Establish strong data governance

• Start with pilot programs to prove ROI

• Integrate AI tools with existing ERP and CRM systems

AI's influence goes beyond basic automation. In fact, 59% of tasks in business and financial operations show strong potential for AI-driven improvements . These capabilities lay the groundwork for understanding how AI can transform accounts receivable management.

AI Tools' Advantages During High Inflation

Faster Payment Collection

AI-driven accounts receivable (AR) tools speed up payment collection, cutting days sales outstanding (DSO) by as much as 20% . For example, HighRadius users have reported a 5.5-day reduction in DSO .

These tools automate key tasks like:

• Using predictive analytics to flag potential payment delays

• Prioritizing collections based on account value and risk level

• Automating payment reminders through communication workflows

• Matching and reconciling payments in real time

"With Billtrust Collections, we're now seeing accounts that we never contacted before proactively contacting us, and making payments sooner. As a result, the number of past-due accounts is decreasing." - Corporate Credit Manager, Building Products Distributor

This faster process not only boosts cash flow but also helps reduce operational costs.

Reduced Operating Costs

AI-powered AR automation significantly lowers operating expenses by streamlining processes and improving efficiency. Here's how:

| Cost Reduction Area | Impact |
| --- | --- |
| Operational Costs | Up to 50% savings |
| Dispute Resolution | 40% faster resolution time |
| Recovery Rates | 30% improvement |
| Manual Processing | Eliminates paper-based tasks

NovaTech Automation highlights these savings through its use of Datarails' reporting capabilities, which have saved the company hundreds of thousands of dollars while maintaining profit margins during inflation .

"The impact that Datarails has had on our company, on NovaTech, has been the ability to create transparency within the organization. So now we can have the same information visible to our CEO and on our production floor. Now there's a single version of what's really happening." - BJ Weil, SVP of Finance and Administration, NovaTech Automation

Data-Driven Financial Planning

AI tools like CashFlowTool's CashLearn™ AI do more than just speed up collections and cut costs. They offer real-time cash flow forecasts and send alerts for unexpected bills or cash shortages .

These tools help businesses:

• Simulate various financial scenarios to guide decision-making

• Get early warnings about potential cash flow challenges

• Track personalized KPIs through live dashboards

AI-Powered Integrated Receivables Platform

Must-Have Features in AI AR Tools

These features play a key role in improving efficiency, especially in managing accounts receivable (AR) during inflationary periods.

Smart Invoice and Payment Systems

AI-driven invoice systems simplify and speed up payment processes. Here’s how:

| Feature | Business Impact |
| --- | --- |
| Data Extraction | Cuts the labor cost of processing a single invoice by up to 79% |
| Real-time Payment Tracking | Reduces processing time from 17.9 days to just 3.4 days |
| Automated Reminders | Sends reminders for overdue payments automatically |
| Exception Handling | Flags discrepancies for quick review

For example, one healthcare provider slashed its daily remittance matching time from 4.5 hours to just 1 hour. AI handled nearly 90% of incoming payments .

AI’s benefits don’t stop at invoicing - it also enhances credit risk assessments.

AI Credit Risk Analysis

After streamlining invoicing, effective credit risk evaluation becomes critical, especially in inflationary times. AI systems pull data from over 35 credit agencies, monitor real-time payment behaviors, and detect early signs of default. They also ensure compliance with FCRA and ECOA regulations .

To further support financial decision-making, advanced reporting tools are essential.

Custom Reports and Forecasts

Deluxe’s system provides a striking example: it reduced remittance matching time from 12 hours to just 15 minutes, with plans to bring it down to 2 minutes .

Key features of these tools include:

| Reporting Feature | Business Benefit |
| --- | --- |
| Cash Flow Forecasting | Helps predict future cash positions |
| Analytics | Tracks Days Sales Outstanding and other collection metrics |
| Risk Dashboards | Monitors customer payment trends |
| Compliance Reports | Ensures regulatory adherence

These tools address critical challenges: 45% of CFOs report payment disruptions due to invoicing errors , and over 70% of corporate treasurers face difficulties with collection and reconciliation processes .

How to Set Up AI AR Tools

Evaluate Your AR Needs

Before diving into AI integration, take a close look at your accounts receivable (AR) processes to identify major challenges. Research shows that 85% of AI projects fail due to poor data preparation . A detailed evaluation helps ensure a smoother transition into your AR workflow.

| Assessment Area | Key Metrics to Review |
| --- | --- |
| <strong>Invoice Processing</strong> | Average processing time, error rates |
| <strong>Payment Collection</strong> | Days Sales Outstanding (DSO), late payment % |
| <strong>Customer Communication</strong> | Response times, dispute resolution duration |
| <strong>Staff Workload</strong> | Manual hours spent, task distribution

When done right, implementing AI in AR can reduce DSO by as much as 32% .

Prepare Data and Systems

Did you know that data scientists spend 60–80% of their time preparing data ? This step is crucial for success. Here’s how to get started:

| Data Preparation Step | Actions to Take |
| --- | --- |
| <strong>Data Collection</strong> | Gather AR data from all relevant sources |
| <strong>Data Cleaning</strong> | Eliminate duplicates and standardize formats |
| <strong>System Integration</strong> | Link AI tools with existing financial software |
| <strong>Quality Validation</strong> | Use automated checks to ensure accuracy

For example, one financial institution improved fraud detection by properly splitting data into training and testing sets, avoiding model overfitting . Once your systems are integrated, focus on training your team for a smooth transition.

Staff Training and Transition

Clean data and integrated systems are just the beginning. Your team needs the right skills to make AI work effectively. Training and proper change management are essential. One manufacturing company partnered with Infopro Learning and saw a 30% boost in AI adoption and a 25% increase in operational efficiency .

Build a structured training program that includes:

• Initial Assessment: Identify gaps in staff knowledge and focus on practical AI applications in AR tasks.

• Phased Implementation: Start small. For instance, Lufthansa Cargo’s pilot program reduced training failures by 80% .

• Continuous Support: Offer ongoing resources and regular updates as AI evolves. Set up clear communication channels so employees can report issues or ask for help.

Conclusion: AI's Impact on AR Management

Key Takeaways

AI-driven tools for accounts receivable (AR) management have proven to improve cash flow and reduce costs, especially during inflationary periods. Companies leveraging AI in this space report a $55M increase in free cash flow per billion dollars of revenue . Here's a closer look at the measurable outcomes:

| Area of Impact | Results |
| --- | --- |
| Payment Collection | 30% drop in Days Sales Outstanding |
| Staff Productivity | 40% boost in operational efficiency |
| Cash Flow Management | 47% less idle cash, adding $1.04M in benefits |
| Error Reduction | 50% fewer forecasting inaccuracies

These results highlight how AI is reshaping financial management with clear, measurable outcomes.

The Road Ahead for AI in Finance

The AR automation market is expected to grow significantly - from $3.41 billion in 2022 to $9.59 billion by 2030 . Beyond solving current cash flow issues, AI is setting the stage for financial systems to better handle future economic shifts.

"Generative AI tech is cool and exciting, but successful implementation is about engaging people to drive change rather than focusing on the tech." - David Buza, CTO at Solomon Partners

Here’s what the future of AI in finance looks like:

Tailored Services: Financial institutions are using transactional data to offer more personalized services. As Alex Sion, Head of Financial Services at Blend, explains:

"Financial services firms possessing a comprehensive understanding of consumer and merchant transactional data are uniquely positioned to leverage advanced AI to drive transformative operational efficiencies"

Stronger Fraud Prevention: With fraud schemes becoming more advanced, banks are adopting AI to enhance their risk management. Assaf Zohar, CTO at EverC, advises:

"Banks should look to assess risk in all sectors of their business, to be prepared for these challenges"

Economic Growth: AI's ability to improve productivity could have far-reaching effects. BlackRock CEO Larry Fink shares:

"AI has huge potential to increase productivity. It may be the technology that can bring down inflation"

Projections indicate a 7% increase in global GDP and a 1.5 percentage point rise in productivity growth over the next decade, thanks to AI advancements .

AI in AR management is creating more adaptable and efficient financial systems. As we look ahead, success will hinge on ethical practices, safeguarding data, and finding the right balance between automation and human expertise.

Tennis Finance: AI AR Automation Platform

Tennis Finance offers a platform designed to improve cash flow management using AI-powered accounts receivable (AR) automation. This solution is crafted to address the challenges businesses face in managing AR, especially in an inflationary economy.

Key Features of Tennis Finance

Tennis Finance's platform uses advanced AI to tackle AR management challenges, focusing on three main areas:

| Feature | Function | Business Impact |
| --- | --- | --- |
| Communication Analysis | AI processes customer communications | Helps avoid regulatory breaches and lawsuits |
| Workflow Automation | Automatically categorizes and tags tasks | Cuts operational overhead by 80% |
| Risk Management | Monitors compliance in real-time | Strengthens regulatory protections

By analyzing customer interactions, the platform helps businesses maintain steady cash flow, even during economic uncertainty. These features are the backbone of Tennis Finance's solutions.

Business Solutions by Tennis Finance

Tennis Finance tailors its AR automation platform to meet the needs of different industries. Jake Pimental, Co-Founder and CEO of Tennis Finance, highlights the platform's benefits:

"We leverage AI-driven technology to analyze calls and customer interactions, providing actionable insights that streamline workflows. Our platform parses customer communications, automatically categorizing and tagging them for compliance risk. This automation significantly cuts overhead, enhances regulatory safeguards, and boosts customer retention - giving clients a competitive edge."

The platform is particularly effective for:

• Financial Institutions: Tools for compliance monitoring and risk management help banks, financial institutions, and debt collectors stay compliant while speeding up payment collection.

• SaaS Companies: Automated workflows reduce manual efforts, improving cash flow management during economic uncertainty.

• Small and Medium Businesses (SMBs): Simplifies payment recovery and lowers operational costs, helping smaller businesses maintain cash flow despite inflation.

Tennis Finance's impact is clear. For instance, a leading debt collection agency reduced its operational overhead by 80% after adopting this platform .

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