For small- to mid-sized manufacturers, the constant focus is on production, quality, and the supply chain. Yet, an often-overlooked area—accounts receivable (AR) and accounts payable (AP) departments—may quietly be costing you money, creating lost liquidity, and hindering growth. Manual processes that rely on messy paperwork, spreadsheets, and email chains create “fire drills” and a constant state of operational stress. Investing in AR and AP automation is the solution to fighting these inefficiencies, delivering the efficiency, transparency, and liquidity you need to truly take control of your capital. 

Manufacturers face unique challenges that directly impact cash flow—long cash conversion cycles, unpredictable supply chain costs, and significant capital expenses. Because cash flow pressures are so intense, any dysfunction in AR and AP processes is magnified. Automating these functions not only reduces debt and improves profit margins but also frees up more cash on hand to invest in business growth and innovation, ultimately enhancing confidence among stakeholders, such as investors and partners. 

When processes rely on spreadsheets and disconnected systems, a lack of transparency into your AR and AP is created, making informed financial decisions nearly impossible. For small to medium-sized businesses, 59% cite cash flow forecasting as their top challenge when relying on manual AR. The high level of uncertainty means you cannot track your cash position, leading to constant chaos and missed opportunities for strategic investments.   

Automating AR and AP gives you real-time insight across accounting operations, allowing you to spot payment bottlenecks, forecast with confidence, and gain greater control over your business’s financial health. 

The overhead costs of manually maintaining AR and AP span further than just labor; it’s also unnecessarily high transaction costs. Manual methods often require processing paper checks and taking debit or credit card payments over the phone, which can increase labor and processing time.  

Automating AR and AP simplifies payment processing. Solutions like ACH and credit card payments lower the fees associated with paper check payments. 

Late payments can choke your business growth. The process of sending paper invoices, matching payments, and managing customer disputes is slow, bothersome, and prone to error. On average, firms without automated AR have a Days Sales Outstanding (DSO) of 47 days, but firms with automation decrease DSO by a week. Without automation, cash remains tied up for longer periods, delaying your ability to invest and grow. 

Automating AR and AP helps you fight back—speeding up collections, delivering a smoother payment experience for customers, and eliminating the “endless chase.” Features like automated invoicing and overdue notifications accelerate collections and ensure faster deposits. 

When invoices pile up and payment schedules are dictated by messy paperwork and manual processing, you lose the ability to maintain full control of your cash flow. This lack of control means payments often slip through the cracks, or funds are not strategically available to take advantage of beneficial vendor terms. The most significant hidden cost here is the inability to capture perks like early payment discounts and bulk pricing, which are essentially free money that reduces your overall liabilities. 

Automating AR and AP provides you with the necessary control by strategically scheduling payments to vendors with expected cash availability, ensuring you can consistently and reliably pay vendors on time, leading to stronger relationships and the best possible payment terms. 

The hidden costs above create a damaging ripple effect: 

• Increased fraud risk: The manual use of paper checks exposes companies to a higher risk of financial loss. Automation helps reduce fraud by eliminating paper checks and securing sensitive AR data with tokenization.
• Weakened vendor relationships: Manual processes increase the risk of missed or late payments, eroding trust. Consistently and reliably paying vendors on time through automation leads to improved payment terms, which in turn benefits cash flow.
• Operational drag: Staff spends less time driving the business forward and more time on administration, which is taxing on back-office tasks and hinders revenue. Seamless, automated workflows eliminate manual overhead. 

Investing in AR and AP automation, such as a NET1 Commerce Suite fully integrated with your ERP, is the best path to financial freedom. Automation strengthens financial health by automating routine processes, optimizing cash flow, and reducing the stress of manual tasks. It ensures you can speed up collections, gain full control over cash outflow, and move from reacting to proactively managing your liquidity. 

Inaction is costing manufacturers more in lost liquidity and manual overhead than they realize. Escape the trap of manual finance today. By automating AR and AP, you put your business back in control, ensuring you are focused on what you do best: manufacturing, innovation, and growth.