Challenges are everywhere when implementing digital transformation in financial operations and accounts receivable, but how do you overcome them? Learn firsthand from financial leaders who have jumped hurdles and turned challenges into opportunities.
During a recent Controllers Council hosted webinar titled "The Digital Shift in AR: Smarter Strategies, Better Outcomes," Joy Mbanugo, CFO at CXAI, Todd Bailey, CBO at X-Golf, and Mike Passifione, VP Payments at Billtrust, shared their experiences and insights on AI-driven automation in finance and accounting, and the challenges they faced when implementing digital transformation projects.
Missed the round-table panel? In this article, you’ll discover actionable strategies to overcome automation barriers, measure success, and leverage AI for a more efficient AR process. Want to watch the recording?
Streamlining AR: Challenges, strategies, and opportunities
While a majority of companies are exploring AR automation, roughly half still haven't yet taken the plunge. That’s according to our webinar attendees.
Webinar Poll: My company has implemented AR automation?
- 43% Agree
- 9% Strongly Agree
- 33% Disagree
- 9% Strongly Disagree
- 7% I don’t know
This highlights both the growing interest in automation and the potential for financial leaders to learn from early adopters.
Addressing problems in month-end billing
Todd Bailey shared one of the major challenges he faced at a previous software company: automating the month-end billing process. This was especially difficult when dealing with usage-based invoices tied to specific customer thresholds: “Initially, we manually collected usage data, processed it, and created highly customized invoices, which was time-consuming and inefficient. Customers often required detailed invoices, including user-level data, as they were reselling to their own clients.”
To address this, he focused on automating the process step by step. Starting small allowed his team to achieve early wins and gradually improve, avoiding being overwhelmed by tackling everything at once. This phased approach proved effective in streamlining the invoice creation process.
Starting small allowed his team to achieve early wins and gradually improve, avoiding being overwhelmed by tackling everything at once.
Advancing from partial to full AR automation
Joy Mbanugo joined her current employer in August 2024 and is working with a partially automated AR process that still has significant room for improvement. Currently, about 40% of the process is automated, with 60% still needing optimization.
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While some tools are already in place—such as an approval system that integrates with the ERP to generate invoices—much of the workflow remains manual. Tasks like email correspondence and forwarding invoices to clients are still handled manually, highlighting opportunities for further optimization. Her goal is to connect tools like the CRM, contracting, approval, and ERP systems through APIs to create a better workflow.
We’re focusing on identifying areas where we can reduce human error, streamline workflows, and make everything more efficient.
Joy Mbanugo
Automation doesn’t stop at invoicing—it extends to streamlining payments and ensuring quick, efficient transactions, says Passifione: “The goal is to implement technology that creates happy employees and customer-friendly tools for easier payments. While invoicing is a key benefit, many suppliers face cash application issues when buyers make payments without sending remittance details. Without proper remittance, payments can’t be applied effectively, which is a common challenge for a lot of suppliers today.”
Automating key AR functions
Webinar Poll: What specific AR functions are automated, or planned to be automated?
- 64% Invoicing
- 28% Credit and/or Collections
- 43% Payments
- 40% Reporting
- 15% Other or not sure
Commenting on the poll above, Mike Passifione highlights the growing importance of leveraging AI and analytics to automate credit and collections processes within the AR space: “Tools like AI-driven reporting and AI assistants provide instant, detailed insights to support credit decisions and prioritize collections. As suppliers embrace these technologies, the value in streamlining these functions continues to grow, and more advancements are expected in the coming year.”
Overcoming automation barriers: prioritization, resistance, and ROI
When asked about the challenges of transitioning from manual processes to automation, Joy Mbanugo shared her experiences from working across five different companies. A recurring issue she faced was the difficulty of prioritization and resource allocation within finance and accounting systems. Often, certain teams or areas of the business are prioritized, leaving others, like back-office functions, underfunded and reliant on manual processes. For instance, Mbanugo recalls implementing a collections tool that still required significant manual effort due to a lack of automation.
Resource allocation and difficulty prioritizing are common problems when automating accounting systems. Often, back-office functions are underfunded and reliant on manual processes.
Todd Bailey knows firsthand that introducing automation isn't always easy. “Whether automating manual tasks or implementing business intelligence solutions, there's always a need to convince and convert people, both within teams and cross-functionally. As a leader, I've had to adopt the role of an internal salesperson—installing the vision across the organization, addressing doubts, and building buy-in across the organization.”
With AI, there's always a need to convince and convert people. Leaders typically take on the role of an internal salesperson, building buy-in and showcasing the vision across the organization.
Passifione agrees with the experiences of Mbanugo and Bailey: “We often hear from our suppliers it’s an IT bandwidth or a cost issue. However, taking a look at your payment processes can reveal significant ROI opportunities. Streamlining and automating payment acceptance can lead to substantial savings—often in the seven-figure range—and improve efficiency. By analyzing payment practices, suppliers can create compelling cases for decision-makers like CFOs to prioritize these changes.”
Payment process automation can come with an ROI upside of more than $1M.
“We’ve found the most success when we shift focus and demonstrate the customer experience improvements our customers will enjoy as a result of these changes,” says Passifione. “This approach consistently breaks through initial hesitation, especially when we can clearly show and quantify the impact from a customer experience standpoint. From my perspective, that’s where we’ve seen significant success with our clients.”
Break down barriers by demonstrating customer experience improvements.
Measuring success in AR automation
How do you measure the success of AR automation? Todd Bailey focuses on key metrics like reducing days-to-pay and measuring process duration before and after automation. “We also translate these improvements into financial terms, showing the cost of investment versus savings," he explains. "Also, in a growing business, it’s not just about saving today, but ensuring processes can scale effectively with increased volume, staying ahead of tomorrow's problems.” For Bailey, however, the true value of automation isn’t just in the numbers. It is in the intangible benefits—like seeing a less stressed team and more smiles during month-end.
Measure process duration before and after automation and study metrics like days-to-pay.
Understanding the key KPIs of suppliers is where it all starts, says Passifione, explaining how Billtrust supports its clients: “We help suppliers achieve their goals. Through a detailed process, we provide AR automation tools that clearly demonstrate ROI. Our focus is on identifying the objectives—whether it's DSO improvement, days-to-pay improvement, or optimizing working capital—and delivering results. Regular check-ins ensure we're meeting these targets and driving success.”
AI and the vision for the future
One of Mbanugo’s key projects this year is focusing on process improvement across all functions, not just finance but also operations. “I’ve been passionate about identifying and streamlining manual processes. Now, working at an AI-first company, I’m exploring how to create and deploy AR and FP&A agents to enhance efficiency—not to replace people, but to help us work faster and smarter.” She mentions the impact of having an AI-powered agent or virtual assistant to improve analytics, automate reminders for overdue invoices, or streamline collections communications in a customer-friendly way. Leveraging AI to personalize AR communications is a key priority for financial leaders.
Webinar Poll: Are you exploring or implementing AI for AR or other functions?
- 8% Yes, we have implemented AI
- 50% Yes, we are exploring or evaluating AI
- 35% No, we have not explored or implemented AI
- 8% Other or not sure
Mbanugo believes the future will involve fully seamless and integrated systems that communicate effortlessly with one another. Across organizations, we might see intelligent agents working together rather than relying on a single tool with AI built into it. Instead, multiple tools—like ERPs, CRMs, approval systems, contracting tools, IT tools, and coding tools—could collaborate to streamline workflows and help companies operate more efficiently across the broader financial environment.
The future will bring fully integrated systems that communicate effortlessly with one another – for broader benefit across the entire financial environment.
Mbanugo envisions a future where everything clicks into place, creating a seamless flow for the entire organization: “In finance and accounting, automation is already making significant strides, especially in accelerating processes like the financial close. Imagine being able to close in just a few days—that's the kind of future I envision.”
It’s not just about automating specific areas; it’s about creating a cohesive, efficient AI system across the board.
Joy Mbanugo, CFO, CXAI
This is precisely the vision Passifione strives to achieve as well. He sees technology, like what Billtrust does, integrate seamlessly into ERP systems as the ultimate source of truth for every supplier. And he hopes for the eventual end of check payments: “While checks are cost-effective for suppliers and merchants, there’s a lot of pain that comes with them, from remittance issues to cash application inefficiencies. Today, there are so many advanced payment methods available.”
Passifione continues: “I firmly believe we’ll eventually strike a balance—offering value to merchants and suppliers comparable to credit cards but with costs closer to ACH or somewhere in between. Technology will undoubtedly drive this transformation, and when it happens, it will be a major breakthrough for the AR world.”
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FAQ
AR automation refers to the use of technology to streamline and automate accounts receivable processes. It is important because it reduces manual tasks, minimizes errors, speeds up invoice processing, and improves cash flow management.
AI can enhance AR processes by automating repetitive tasks, providing predictive analytics for better decision-making, and improving customer communication through AI-driven reminders and personalized interactions.
Common challenges include prioritization of resources, resistance to change, integration with existing systems, and ensuring a positive ROI. Overcoming these barriers often involves phased implementation and demonstrating the benefits to stakeholders.
Success in AR automation can be measured through key metrics such as reduced days-to-pay, improved cash flow, decreased manual errors, and enhanced efficiency in invoice processing and collections.
Future trends in AR automation include increased use of AI and machine learning, seamless integration of multiple systems, enhanced customer experience, and the potential reduction in the use of traditional payment methods like checks.