Is AR Automation a Non-Negotiable for Small Business Owners?
For years, small business owners have managed accounts receivable (AR) with spreadsheets, emails, and phone calls. While this approach may have worked when client lists were short, today’s pace of business is faster, more digital, and far less forgiving. The question many leaders now face is simple: Is AR automation still optional, or has it become non-negotiable?
The Cost of Staying Manual
Manual AR processes drain time and create hidden costs. Consider a small business with $1.5 million in annual revenue and 150 customers. If the owner or finance assistant spends 15 hours a week on collections, that’s nearly 780 hours per year. At $25/hour, the business is spending almost $20,000 annually just chasing payments.
That doesn’t include errors like missed invoices or duplicate reminders that can harm client relationships. Worse, delayed payments keep cash locked up, forcing business owners to dip into credit lines or delay supplier payments.
Why Automation Changes the Game
AR automation eliminates these inefficiencies by:
- Automating Reminders: Customers receive polite, timely nudges without awkward phone calls.
- Offering Multiple Payment Options: Easier ways to pay reduce delays.
- Providing Real-Time Visibility: Owners always know who owes what and when.
- Reducing DSO: Faster collections improve cash flow and reduce reliance on debt.
A Simple Example
Let’s say the same $1.5 million business has an average Days Sales Outstanding (DSO) of 50 days. By using automation to cut DSO by just 10 days, it frees up $41,000 in working capital. That’s money available to invest in growth, hire staff, or negotiate better supplier terms without taking a loan.
The Bottom Line
For small businesses, cash flow is survival. What used to be a “nice-to-have” back-office upgrade is now a strategic necessity. AR automation saves time, improves accuracy, strengthens customer relationships, and unlocks capital that fuels growth. In today’s competitive environment, it’s no longer a question of if small business owners should automate—it’s when.
Stop treating AR as a cost center. With Nerdpay, automate collections, cut DSO, and free up capital to grow your business. Book a free demo today.
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From startups to growing businesses, teams rely on Nerdpay to keep cash flow nerdishly smooth.
"With Nerdpay, invoicing feels effortless and payments arrive on time. It’s like having an AR sidekick built right into our workflow."
"The automation does the heavy lifting. We save hours every week while keeping client relationships stress-free."
"Nerdpay turned our messy collections process into something predictable. Cash flow finally feels under control."
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