Trends in AR automation: Data forecasting, IT availability and AI growth

Deluxe and Strategic Treasurer, for the third year in a row, teamed up to survey more than 200 financial institutions and companies across the world to analyze and gain insight from emerging accounts receivable (AR) trends. Craig Jeffery, Strategic Treasurer’s founder and managing partner, sat down with Deluxe’s Managing Director of Payment Advisory Services, Rick Scholz, and Deluxe’s Vice President of Treasury Management, Jonathan Gustave, to share the results of the 2022 Modernizing AR Processing Survey during a webinar in September. 

Kicking off this webinar, Jeffery outlined the key areas of focus and analysis that he, Scholz, and Gustave would discuss: automation priorities and blockers, the usage of AI and machine learning, the growing forecasting trend, key AR pain points and key takeaways for the audience.

Few AR groups report being highly automated in 2022

AR automation remains top of mind for many businesses, regardless of size. In 2021, the number of businesses that reported themselves with a hybrid of mixed manual and automated processes averaged at 48 percent. In 2022, an average of 60 percent of business reported they used a mix of manual and automated processes.

According to this year’s data, nearly three times as many large businesses reported being highly automated as do small businesses (19 percent of large businesses to 7 percent small businesses).

 The need for forecasting moves to key driver for automation

The 2022 Modernizing AR Survey was the first time that forecasting made the top four drivers to automation. For large and small businesses combined, “forecasting accuracy” was the second highest driver at 49%, which is a 33% increase since 2020. “The use of automation is heavily done to drive efficiency and also forecasting,” explains Jeffery. “Forecasting is an area that’s showing up in a lot of the research we do.”

Hand-in-hand with forecasting, more organizations also recognize data as more important in nearly every area of technology. In fact, “more transparency with data” moved up 15 points from the 2021 survey, which makes data the second most compelling reason to increase the priority for companies to move to full-electronic processing.

IT availability reported number one roadblock for the third year in a row 

Internal IT availability continues to block many companies from automating their AR processes, according to the Strategic Treasurer 2022 survey results. This trend is especially true for larger companies. However, “management priorities” and “IT availability” were the top barriers for automation reported for all companies (regardless of size). 

“It’s not surprising that, in terms of roadblocks, the number one reason or roadblock to automation is IT availability to support the process. It has stayed number one, increasing each year for the past three years,” explains Gustave.

Forty-nine percent of respondents said “IT availability to support the process” was the main prevention from being highly automated. Management initiatives or priorities as a barrier jumped up to 47% (from 29% in 2021). 

Artificial Intelligence expected to double by 2024

Of the companies and financial institutions surveyed, 17% plan to use AI and machine learning within the next two years for credit management and cash application. While 14% responded they plan to use AI and machine learning for billing/invoicing in the next two years. Twelve to 29% of companies expect to increase their use of AI/ML within two years.

“AI and machine learning is expected to more than double within two years, so this is an area that is growing rapidly,” says Jeffery. “Your peers are using it, and many more of your peers are expected to use that in the near term.

Gustave agrees, “I think now it comes down to ease of implementation, because it has to compete with that number one barrier of IT resources. On the solution side, there’s definitely a want from companies, as well as financial institutions, to adopt machine learning and artificial intelligence.” 

For more key findings and a deeper dive into the 2022 results, watch the full webinar replay.