Accounts Receivable Automation: Everything You Need to Know

MHC Team    November 16th, 2021

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From the moment you generate a customer invoice to the final reconciliation of payment received, your accounts receivable is a process primed and ready for automation to step in and streamline your workflow.

What is Accounts Receivable Automation?

If accounts receivable (AR) is the full process of how you invoice customers and accept payments for products and services, accounts receivable automation is the transformation of that process into a streamlined system where each step is triggered and taken care of by digital actions.

Imagine the lifecycle of an invoice in your business. First it must be created or generated to include all relevant information related to the transaction of charging money for a product or service provided to your customer. Then it must be sent or transmitted to the customer in a timely manner with reminders and even escalations sent thereafter if payment is not received. Once you do receive the customer’s payment, the invoice must be reconciled with the remittance – along with any other supporting data and documentation – to wrap up the process.

By automating as many steps in your accounts receivable process as possible, you can entrust the mundane and repeating tasks usually taken care of by your team to a digital system that does automatically what your human team would do manually.

Features of AR Process Automation

ELECTRONIC INVOICES – Paper invoices, once inserted, sealed, and metered for delivery, typically arrive within three to five days when the mail system is running smoothly. Emailed invoices arrive instantaneously, cutting back your turnover time by three to five days and kicking off communication with your customer. Not only does accounts receivable process automation save on delivery times, it also eliminates postage costs.

CUSTOMER COMMUNICATION– Invoices aren’t the only way you can communicate with customers throughout the accounts receivable process. In addition to sending invoices, AR clerks can electronically send support documents straight from the automation solution and upload communications from customers back into the workflow. Customers appreciate consistent communication and may respond by remitting payment faster.

SYSTEM SNAPSHOTS– Rather than piecing together separate documents related to a specific invoice, your accounts receivable automation solution ties together all the information needed for AR and customer service. Each workflow view contains supporting information including invoice details, customer information, communication history, bills of lading (BOL), shipping documents, payment options, comments, and aging tasks – all easily accessible at every step of the process.

ORGANIZED CONTROL– An automation solution for your accounts receivable system is configured the way your team needs it to be. The process is organized to be intuitive to anyone needing to access it, which improves visibility and control. Your AR clerks can create and categorize workflow information to see invoices by age or by client based on what they need to accomplish.

RELEVANT REPORTING – Your accounts receivable team often must provide insights to colleagues outside of the accounting department, which is why automation reporting is so helpful. The AR team can easily and quickly set filters for ad-hoc reporting and export required data to a variety of formats including Microsoft Office Excel spreadsheets.

How the Accounts Receivable Automation
Process Can Work

Up until now we’ve been envisioning the various steps an invoice takes from start to finish in your company. Now is our chance to take a closer look at each task in your accounts receivable workflow and how automation can take a specific invoice through seamlessly.

Every invoice that enters your accounts receivable automation system becomes a specific workflow task that is tracked by the invoice’s age. Automation users can create defined tables that allow for built-in collection policies that consider the client and the age of the specific invoice. Once those defined tables are created, an invoice that enters the automation system might follow a path like this:

1. SEND THE INVOICE. The automation system transmits the invoice electronically to the correct customer without requiring a manual touch or edit. The email message itself can be configured based on the type of invoice, the customer, or other criteria determined by your business.

2. LATE NOTICE. The system sends a late notice email to the client, which includes a copy of the open invoice. The messaging in this late notice can be customized, just as the initial email was, to meet the needs of the users while prompting the client to take specific action. Again, invoices are tracked by age, and the AR automation system may be configured so that this initial late notice goes out on Day 31 or on whatever date or time your company chooses.

3. 45-DAY NOTICE. As the system continues tracking the invoice’s age, additional automatic notices can be sent as each new late milestone arises.

4. 60-DAY NOTICE. With each late notice that is triggered and sent to the customer, each providing them with the invoice for their convenience, your messaging can be adjusted accordingly to prompt action.

5. CREDIT HOLD NOTICE. The accounts receivable automation system also allows for credit hold warnings and then eventual credit hold flags in your ERP system. Two-way communication means that the ERP can also push credit hold flags to the accounts receivable automation system, enhancing overall communication and versatility through seamless integration.

6. COLLECTION EMAIL. Ongoing collection emails can also be sent by your automation system. If the initial notice and contact fail to prompt the client to take action, the style and cadence of these collection emails can be customized. Customer replies to these messages are directed to a group mailbox specifically for collecting and addressing AR issues. Users are able to drag and drop the email into the workflow for tracking purposes.

Throughout the entire invoicing process, AR clerks can monitor the workflow and invoice: taking action, making notes and comments, and sharing the open invoice with other team members as needed until the payment is received or otherwise resolved. The automation system can be configured to trigger follow-up calls at certain intervals after the initial notice goes out. For different invoices and workflows, this process will take varying amounts of time, but the AR automation system can help your users manage the entire process.

Benefits of Accounts Receivable Automation

By now your imagination may be running at full speed, thinking about all the ways your business and teams can improve upon your current accounts receivable processes. There are indeed many benefits that automation can bring to your AR process.


Simply by reducing the repetition and need for manual tasks, an automated accounts receivable system can speed up processes and put hours back into your team’s days. When they can focus their brain power on improving your business while the automation handles tasks in the background, your company can see real benefits in your bottom line.


Like a well-oiled machine, your AR team partnered with automation in their processes can run smoothly together. Tasks are handled the same across the board, which leads to less confusion and more method that works for everyone’s benefit.

cut cost
Amplify Accuracy


When a single customer pays invoices late or not at all, that’s bad enough. When multiple invoices aren’t getting paid, your business might have trouble bouncing back even when they catch up. By relying on automation for consistent sending of invoices and reminders, you can reduce your DSO rate and help your business stay afloat.


Automated systems follow routines which inherently make errors harder to happen. In fact, AR automation can detect errors faster and better than the human eye – especially when they’ve been staring at numbers and spreadsheets all day, every day – and thus serves as the perfect quality checker for every step of your accounts receivable process.


Company culture is a serious factor in whether or not employees decide to stay with an employer. When you can add automation to your accounts receivable team, you demonstrate that you value their talents enough to free up their time to innovate and improve the business. Automation isn’t about replacing people; it’s about supporting them by shouldering the most boring yet vital parts of their jobs.


You may not think that asking customers for their money is a great experience, but if we know anything about customers it’s that they like things to happen now. By letting your automation system run triggered communications for your accounts receivable, you’re staying in constant and timely contact with your customers who will never be left wondering why they aren’t hearing from you or if you tend to let things fall through the cracks.

Customer Service

Automating Your AR Team Into the Future

Automating yet another element of your workflow can only serve to free your team up for tasks that guide your organization closer to their ultimate goals. Given the number of activities within the accounts receivable process, automation is a vital step in moving your entire team closer to a fully automated workflow process – revolutionizing the dynamics and performance of your entire company. MHC has the solutions to get you there. Schedule a personalized demo to see just how MHC can advance your accounts receivable process.

Team MHC

Team MHC consists of a multitude of roles, functions, and expertise within MHC. With extensive combined experience in accounts payable and customer communication management, Team MHC has a unique insight into how to empower people using solutions that streamline processes while enhancing customer communication. Working alongside field experts in various industries and company sizes, Team MHC has garnered impressive thought leadership knowledge that we are excited to share with our readers. Including Aragon’s 2022 Women in Tech winner Gina Armada, CTO Dan Ward, VPs of Finance and Customer Service, and other talent that runs the spectrum of technology ability, Team MHC offers a mastery of skills to benefit our customers and prospects alike.


Get to Know MHC!

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