Nov 14, 2025
You've implemented AR automation software. Your team promised a 25-40% DSO improvement. Six months later, you're staring at numbers that barely budged: or worse, got marginally worse. Sound familiar?
Here's the uncomfortable truth: most companies chase AR automation for the wrong reasons and measure success with the wrong metrics. The result? Expensive software delivering modest improvements while the real cash flow opportunities slip through the cracks.
Let's separate fact from fiction and fix what's actually broken.
The sales pitch is seductive: deploy AR automation, eliminate manual processes, watch DSO plummet by 30-40%, and transform your cash engine overnight. The research backs up impressive numbers: 93% of companies report their AR automation delivered expected ROI, with 95% seeing efficiency gains through process automation.
But here's what the success stories don't tell you: those dramatic improvements only materialise when companies achieve near-complete automation coverage: 95% of processes automated, 80% same-day posting rates, and 100% team adoption. Most organisations fall drastically short of these benchmarks.
The gap between basic accounting software (which handles invoicing) and comprehensive AR automation explains why 61% of businesses haven't achieved full automation. Manual workarounds persist, creating bottlenecks that negate the compounding efficiencies driving real DSO improvement.
The biggest myth in AR automation? That technology alone drives DSO improvements. Wrong. Automation amplifies what you already have: deploy it onto chaotic processes, and you'll get chaos faster.
Fiction: Install software, DSO drops immediately
Fact: DSO improvements require process maturity, consistent follow-up discipline, and organised billing workflows
Companies achieving meaningful DSO reductions combine automation with stronger credit policies and systematic collection procedures. The technology works best when it supports disciplined processes, not when it replaces strategic thinking.
Here's the counterintuitive reality: optimising DSO might actually be working against your business. DSO is a blunt instrument that obscures critical insights about your cash flow.
Consider this scenario: Your DSO looks healthy at 35 days, but three major customers consistently pay at 75+ days, creating ongoing liquidity pressure. Meanwhile, 80% of your customers pay within 25 days. DSO averages don't capture this nuance.
The problem with DSO tunnel vision:
Smart companies segment DSO by customer type, payment history, and account value. This provides actionable insights instead of misleading averages.
When implemented correctly, AR automation produces measurable, specific improvements:
Operational Efficiency GainsFinance teams see 40-60% reductions in time spent on clerical work, with 87% improvement in overall process speed. Month-end closes accelerate when payments post automatically with complete accounting details.
Dispute Reduction and Faster Resolution
Centralised documentation enables 60-80% reductions in billing-related disputes and 50% faster resolution times. Customers get access to complete transaction breakdowns, reducing payment inquiries.
Predictive Cash Flow Insights
Modern AR platforms provide expected vs. predicted scenarios based on historical payment behavior, confidence intervals around predictions, and early warning signals for at-risk accounts. This matters operationally far more than DSO itself.
If your automation investment isn't delivering DSO improvements, diagnose these common implementation gaps:
Incomplete Process Coverage
You've automated invoice generation but left collections, payment processing, and dispute resolution manual. Partial automation creates new bottlenecks while eliminating others.
Poor Data Quality Foundation
Automation requires clean customer data, accurate contact information, and consistent billing details. Garbage in, garbage out: especially when algorithms are making collection decisions.
Misaligned Team Incentives
Your AR team still gets measured on traditional metrics that don't account for automated efficiency gains. They're optimising for old KPIs while fighting new workflows.
Technology-Process Mismatch
You've deployed enterprise software onto small-scale processes, or vice versa. The solution complexity doesn't match your operational reality.
The most successful AR automation implementations focus on outcomes that actually drive business value:
Cash Forecasting Accuracy
Replace DSO guesswork with data-driven payment predictions. Know which invoices will pay when, with confidence intervals based on historical behaviour patterns.
Resource Reallocation to Strategic Work
Free finance teams from routine collection calls so they can focus on complex cases, customer relationship management, and AR data analysis. Transform accounts receivable from a reactive cost centre into a predictable strategic function.
Customer Experience Improvements
90%+ of organisations report AR automation improved customer experience through flexible payment options, accurate invoices, and better payment reminders. Stronger relationships support faster collections indirectly.
Risk Mitigation Across Operations
Over 90% of companies report AR automation helped mitigate financial and compliance risks across global invoicing operations.
Stop chasing DSO as a vanity metric. Start optimising for cash flow predictability and operational efficiency:
Week 1-2: Audit Your Current State
Week 3-4: Segment Your Customer Base
Month 2: Optimise Process Flow Before Technology
Month 3: Measure What Matters
Accounts receivable automation works: when implemented with realistic expectations and proper process foundation. You'll see meaningful improvements in operational efficiency, payment processing speed, and cash forecasting accuracy.
DSO improvements follow for organisations that achieve genuine full automation coverage and align their credit policies with their technology capabilities. But chasing DSO as your primary success metric often creates false signals and misaligned priorities.
If your DSO isn't dropping yet, the issue likely isn't your automation software. It's incomplete implementation, unrealistic targets, or strategy misalignment. Fix the foundation first, then watch the metrics follow.
Ready to audit your AR automation strategy and identify the real bottlenecks? Get started with Invevo and discover what's actually holding back your cash flow improvements.
