Digital tools can track and forecast cash flow more accurately, leading to better financial decisions.
Key takeaways
Firms are investing in AR automation to enhance efficiency and accelerate cash flow management.
AI is improving debt management, resulting in faster cash cycles and lower costs.
With the rise of digitalization, organizations are increasingly adopting automation in accounts receivable (AR) to stay competitive.
By leveraging advanced digital tools, firms can track cash flow with greater accuracy, streamline AR processes and improve collections recovery. These innovations enable businesses to reduce inefficiencies, minimize errors and accelerate cash flow cycles, ultimately strengthening financial stability.
RSM has identified three key trends that are revolutionizing modern financial operations, shaping the future of AR and the broader order-to-cash process.
Trend No. 1: Digital financial planning tools are enhancing decision making.
In a world where cash is king, organizations are seeking innovative solutions to track and forecast cash flow more efficiently for their financial planning. To replace manual processes and outdated forecasting models, businesses are increasingly adopting digital financial planning tools that provide real-time tracking of receivables. This enables them to predict cash inflows and shortfalls with greater accuracy, leading to more informed financial decision-making.
Additionally, automated variance analysis enhances cash flow forecasting precision by allowing finance teams to quickly detect discrepancies and proactively adjust credit policies and collection strategies. By integrating digital financial planning solutions, businesses can streamline operations and reduce financial risk, ultimately fostering greater financial stability and long-term growth in an evolving market.
Trend No. 2: Investment in AR automation is growing.
AR automation has emerged as a key trend in financial automation, with firms across industries increasingly investing in AR automation software. This shift is driven by the need to enhance efficiency, reduce manual workloads and accelerate cash flow management. A recent Modor Intelligence market study projects that the AR automation market will reach $5.95 billion by 2030, growing at a compound annual rate of 11.84 per cent over the next five years. AR automation streamlines payment processing, accelerates real-time cash application and reduces manual effort, allowing finance teams to focus on strategic initiatives. Moreover, digital tools enhance working capital management and ensure compliance, reinforcing the growing adoption of automation in financial operations.
As businesses continue to embrace digital transformation, AR automation is playing a crucial role in modernizing financial workflows and improving operational efficiency. According to an APQC report, 64 per cent of finance professionals state that their AR function has benefited the most from digital transformation. With the rising demand for seamless financial operations, AR automation is expected to remain a critical investment for organizations seeking to enhance accuracy, reduce costs and drive business growth.
Trend No. 3: Artificial intelligence is transforming debt collections.
AI has revolutionized debt management and recovery, especially as companies have faced increasing challenges with debt collections in recent years. This shift has driven organizations to seek technological solutions that enhance debt recovery processes while reducing operational costs. As a result, AI adoption in debt recovery has grown significantly, with TransUnion reporting that adoption increased from 11 per cent in 2023 to 18 per cent in 2024.
AI is transforming collections management by leveraging predictive analytics to forecast payment behaviours, identify high-risk accounts and proactively address late payments—ultimately reducing days sales outstanding. Machine learning algorithms further optimize collections by analyzing customer data to personalize outreach strategies, improve engagement and accelerate cash recovery.
Additionally, AI-powered digital assistants and chatbots streamline operations by automating customer queries, significantly reducing the workload on AR teams. AI-driven decision engines also strengthen compliance by ensuring regulatory adherence and minimizing risks associated with manual errors. As firms integrate AI-driven solutions into their collections processes, they experience faster cash cycles, lower operational costs and greater financial resilience. With the rapid advancement of AI’s capabilities, its strategic role in optimizing the collections process will continue to expand, improving efficiency and driving innovation in financial operations.
Improved stability and growth
As organizations continue to adopt and integrate these innovations, they can expect to see improved financial stability and sustained growth in an increasingly competitive market.
RSM contributors
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Nubia Siu ReyesAssociate
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