Accounts Receivable Automation Market Growth Is Estimated To Witness High Growth Owing To Opportunity Of Reducing Costs

Accounts receivable automation involves the use of software to automate and streamline billing, collections, and other AR processes. Account receivable automation helps reduce manual efforts associated with tracking invoices, receipts and payments. It eliminates errors related to manual data entry and provides real-time visibility into cash flow. Account receivable automation solutions integrate with accounting and ERP systems to allow automatic sharing of billing and payment information across departments. This enables organizations to improve invoicing, collections and cash application processes while reducing DSO.

The global Accounts Receivable Automation Market is estimated to be valued at US$ 3817.53 Mn in 2024 and is expected to exhibit a CAGR of 7.1% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity:
Accounts receivable automation provides opportunity to reduce financing costs by speeding up cash collection cycles. By automating repetitive tasks of invoice delivery, payment tracking and bank reconciliations, organizations can streamline their receivables process. This allows faster identification of past due invoices and quicker resolution of billing disputes. Automated workflows for credit checks, automatic reminders and payment plans help improve collection rates. Faster collection cycles allow organizations to reduce accounts receivable balances as well as days sales outstanding. Lower DSO in turn reduces need for working capital financing, thereby lowering interest costs for businesses. Automation tools provide analytics to measure cash application trends as well, which helps identify areas to further reduce collection timelines and costs.

Porter's Analysis
Threat of new entrants: The threat of new entrants is moderate as there are high initial costs for R&D, IT infrastructure and acquiring customers. However, the presence of opportunities for innovative solutions provides scope for new players.

Bargaining power of buyers: The bargaining power of buyers is high due to the presence of many solution providers and substitutes. Buyers can negotiate on price and demand additional services.

Bargaining power of suppliers: The bargaining power of suppliers is moderate since they need to comply with industry standards and buyers have alternatives. However, suppliers of critical technology can influence pricing.

Threat of new substitutes: The threat of substitutes is moderate as manual processes provide alternatives though they are inefficient. Emerging technologies like RPA may also replace certain AR automation functionalities.

Competitive rivalry: Competition is high amongst existing players to gain market share by offering differentiated solutions, partnerships and customer support.

SWOT Analysis

Strengths: Presence of innovative solution capabilities, dedicated customer success teams, partnerships with ERP providers.

Weaknesses: High upfront costs, reliance on third party integrations, changing compliance requirements.

Opportunities: Growing adoption across SMEs, partnerships with accounting firms, cross-selling of integrated fintech solutions.

Threats: Economic slowdowns reducing IT budgets, disruptions from emerging technologies like AI and blockchain.

Key Takeaways

The global Accounts Receivable Automation Market Demand is expected to witness high growth over the forecast period of 2024 to 2031. The market size for 2024 is estimated to be US$ 3817.53 Mn registering a CAGR of 7.1% during the forecast period.

Regional analysis: North America dominates the market currently owing to advanced technologies adoption and presence of major players. Asia Pacific is expected to grow at the fastest rate led by developing countries increasing digitalization.

Key players operating in the Accounts Receivable Automation Market include Aarti Surfactants, Akzo Nobel N.V., Antozyme Biotech Pvt Ltd, ARC Surfactants, Ashland, BASF SE, Behn Meyer, Cargill, Incorporated, Clarient, Croda International Plc, and DuPont Nutrition & Biosciences. They focus on product innovations and partnerships.