Accounts Receivable (AR) is a vital component of maintaining a business's financial health. When AR runs efficiently, organizations improve cash flow, reduce delays, and create more bandwidth for teams to focus on customer relationships and strategic work. When it doesn’t, costs rise and working capital gets tied up unnecessarily.
APQC points to one key metric that reveals the effectiveness of AR processes: the total cost to perform AR per $1,000 of revenue. If that number is higher than expected, it may be time to rethink how the work gets done.
Here are three practical strategies that can help organizations strengthen their AR processes and boost efficiency.
1. Automate the busywork
Manual payment matching, invoice creation, and reconciliation eat up valuable time and leave room for error. Automating these routine tasks speeds up processing, improves accuracy, and enables staff to focus on resolving customer issues instead of managing paperwork.
Pro tip: Start by automating one process, such as matching payments to invoices, and expand from there as you see the results.
2. Bring your AR together
When AR responsibilities are spread across multiple departments or locations, it often leads to duplicated efforts and inconsistent practices. Centralizing AR within a shared team or hub creates consistency, reduces costs, and facilitates easier oversight.
At the same time, organizations can maintain local touchpoints for customer-facing needs. The goal is balance — achieving efficiency in the back office while maintaining responsiveness to customers.
3. Standardize and keep improving
Without standardized processes, every team member may follow a slightly different approach — leading to confusion, inefficiency, and mistakes. Documenting AR procedures, using consistent templates, and creating checklists helps avoid these issues and ensures smoother onboarding for new staff.
Regularly reviewing performance metrics, such as cycle times and error rates, also makes it easier to spot opportunities for improvement and keep the function running at its best.
Learn more in APQC’s 3 Ways to Boost Efficiency in Accounts Receivable Processing