How RPA Makes AP/AR Automation More Accessible for Small Businesses

Many hands make light work, but digital solutions remove the need for hands.

And scaling operational productivity without scaling headcount, particularly within the back-office, is increasingly top of mind for today’s businesses of all shapes and sizes.

After all, among the core processes that directly impact a company’s financial health, the accounts payable (AP) and accounts receivable (AR) functions especially are ripe for innovation and modernization.

For decades, AP and AR processes have remained largely unchanged, relying on spreadsheets, paper-based approvals, and slow, error-prone manual inputs. This approach has left many businesses, particularly small and medium-sized businesses (SMBs), grappling with inefficiencies, cash flow constraints and a lack of real-time financial visibility.

But increasingly, after years of being bogged down by manual work and fragmented workflows, technologies like robotic process automation (RPA) are helping modernize AP and AR departments — with their implementation requiring a minimal technical and labor lift while resulting in a significant productivity lift.

For SMBs in particular, the adoption of RPA is not just a modernization effort; it’s a lifeline toward AP/AR automation that enables more efficient operations, better cash flow management and ultimately survival in a competitive market.

Read more: OCR’s Key Role in Scaling Paperless Invoicing and AP/AR Automation

Understanding RPA: What It Is and How It Works

In an increasingly digital-first world, businesses of all sizes are under pressure to modernize their financial operations to remain competitive.

For many SMBs, the challenge in AP/AR lies in dealing with the volume and variety of documents, many of which are still paper-based or siloed across disparate systems. The PYMNTS Intelligence report “Getting Paid: Digital Payments for Improving Cash Flow and Customer Experience” found that 75% of companies still use paper checks. RPA offers a way to automate data entry, verification, and processing, thus reducing the manual labor and potential for human error associated with these tasks.

Robotic process automation refers to the use of software robots or “bots” that mimic human actions to perform repetitive, rule-based tasks. Unlike artificial intelligence (AI), which can learn and adapt over time, RPA is designed to follow specific instructions, making it well-suited to automating structured, predictable processes.

In the context of AP and AR, this means tasks like invoice processing, payment scheduling, and reconciling accounts can be handed off to RPA systems, freeing human workers to focus on higher-value tasks such as strategic financial planning and vendor management.

The introduction of RPA into AP and AR functions is a game-changer for SMBs looking to modernize without overhauling their entire financial infrastructure. RPA can work within existing systems, acting as a bridge that connects disparate processes and systems into a seamless, automated workflow. This capability is particularly important for SMBs, which may not have the budget to invest in a full-fledged enterprise resource planning (ERP) system but still need to improve their operational efficiency.

See also: Businesses at Risk: The High Cost of Manual AR Processes and What to Do About It

Competitive Edge: How RPA Levels the Playing Field for SMBs

PYMNTS earlier this month examined the challenges facing SMBs, noting that these operations deal with a persistent issue: delayed payments.

Against that backdrop, RPA can help firms automate the extraction of invoice data, verify the information against purchase orders, and process payments according to predefined rules. This not only speeds up the process but also reduces errors associated with manual data entry. For SMBs, this can ultimately mean fewer late payments, better vendor relationships and improved cash flow management.

Accounts receivable management is often an overlooked area of financial operations, especially for SMBs, but it has a direct impact on cash flow. RPA can help automate the sending of payment reminders, track overdue accounts, and even initiate collection processes. By automating these tasks, SMBs can reduce their days sales outstanding (DSO), improve cash flow predictability and avoid the need for costly collection agencies.

Still, despite its benefits, integrating RPA driven solutions is not without challenges. Some SMBs may face resistance to change, particularly if employees are wary of automation replacing their jobs. Additionally, while RPA can handle repetitive, rule-based tasks, it is not a cure-all for more complex financial processes that require judgment or nuanced decision-making.

But at the same time, by automating repetitive tasks, SMBs that turn to RPA for their AP and AR functions can operate more efficiently, reduce overhead costs and improve the speed and accuracy of their financial operations — advantages that were previously out of reach for smaller companies.

For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.