On a balance sheet, you list any invoices you’ve created as short-term assets that will bring realized value to your business. However, various complications can arise throughout this invoice-to-cash (I2C) process that may delay or entirely derail this collection of funds.
Fortunately, both artificial intelligence (AI) and automation can prove invaluable in reinforcing and accelerating this process. In this blog, we’ll explore the impact that these two technologies can bring to your I2C efforts in more detail.
Understanding the invoice to cash cycle
Put simply, the I2C cycle covers those aspects of your accounts receivable (A/R) process that occurs between the initial creation of an invoice and when that debt is finally settled in the corresponding customer’s account within your financial records. Depending on the nature of your business, surrounding industry, and physical location, the actual components of your I2C cycle may vary considerably. However, they routinely at least involve:
- Creating and managing invoices
- Dunning
- Resolving disputes
- Receiving and processing payments
- Applying cash to the appropriate client account
- Complying with regulatory, accounting, and security standards
How AI is revolutionizing the invoice to cash process
Given the importance of these various operations on your overall revenue and cash flow, encouraging their efficiency should be a priority. And in many cases, financial decision-makers have begun to lean heavily on AI to optimize A/R.
These efforts are commonly focused on either augmented decision-making or process acceleration. For example, AI can be beneficial in analyzing existing financial data to build more accurate forecasts for wildly variable operations — like those attached to cash flow. Similarly, this technology can help monitor high-volume workflows to identify abnormalities or errors and even recommend how those issues can be addressed. This might look like AI-powered fraud detection flagging a shady transaction for further review, algorithm-driven cash application, or dispute management.
At the same time, artificial intelligence can be leveraged to support process streamlining and automation, such as using generative AI to create and distribute personalized dunning messages without direct human intervention. Data collected by PYMNTS suggests that among the chief financial officers (CFOs) that it surveyed, 78% had already invested in AI, reporting at least a “somewhat positive” return on their investment (ROI). And among mid-level CFOs, 78% plan to spend more on AI throughout 2025.
Benefits of invoice to cash automation
Whether driven by AI or not, the hallmark of automation is essentially to do more work while consuming fewer resources. And for your invoice-to-cash process — a rather procedurally intense workflow — automation can quickly prove to be one of the most direct and cost-effective improvements you can make. Commonly, these advantages will manifest as:
1. Improved efficiency
Automating key workflows can negate much of the unnecessary time loss associated with more manual processes. Rather than waiting for the following employee to become available to initiate the corresponding action, an automated system can seamlessly drive work — such as an in-process invoice — even outside of regular office hours, only requiring oversight for key approvals. This labor savings can help to drive down costs as well.
2. Increased accuracy
Disputes mean payment delays. While problems with delivering a good or service would likely be more of a logistics issue, many payment challenges center around invoices containing insufficient data.
Even in 2025, many organizations still rely on manual processes to capture sales information and generate customer invoices. And the more physical hands touch a workflow — mainly if they are transcribing information between systems — the more likely you are to introduce human error into your I2C processes. Fortunately, automation can help avoid that.
3. Optimized cash flow
With more timely and accurate operations, you’ll also be able to accelerate the overall billing cycle, meaning that you’ll be converting more “potential” revenue into cold, hard cash in a faster, more predictable manner. The improved insight achieved alongside this stability can let you better leverage your cash position to drive process improvements, technology refreshes, more extensive projects, or whatever else might benefit your organization.
4. Enhanced reliability
Consistency is critical for creating a successful I2P chain. You must always meet or exceed regulatory requirements, industry guidelines, and data security standards. You need your customer touches to be routine and regular — assuming you want to avoid surprising or alienating them. You need to be reliable, like a machine.
When your customers know how you’ll perform, they are more confident to continue their existing financial relationships with you and even recommend you to others.
Key features of invoice to cash automation
Of course, not all automation platforms are built the same. Not every platform will deliver an identical scope of functionality, but some common themes emerge — mainly if you focus on higher-quality solutions.
Artificial intelligence
As we’ve already noted, achieving automation without employing AI is possible. But given the increased prevalence of this technology and its ability to make connections often too subtle for human reasoning, you should look for platforms that have begun to leverage this capability.
Comprehensive integration
When your automation platform can seamlessly pull relevant sales and delivery data directly into your invoice creation efforts, you can bypass the potential for transcription errors. Similarly, when that same platform can transmit the relevant revenue and payment details back out to your accounting systems and general ledger — thanks to back-office integration — you can save time and headaches.
Reporting and auditing
A critical component of the I2C process is ensuring that your operations fully comply with established mandates. Rather than assuming that you are meeting the necessary accounting and security thresholds, you should work with an automation solution that creates precise, digital paper trails for each stage in your A/R workflow. When your efforts are thoroughly and consistently documented, you’re much less likely to experience any hassle from internal or external auditors.
Workflow management
The most labor-intensive phase of your I2C efforts will revolve around the creation and ongoing monitoring of your invoices. But when these efforts can be run via an automated workflow, you can free up your staff to focus on more strategic efforts and more easily avoid unnecessary process delays. Even better, many solutions offer e-invoicing capabilities or dedicated payment portals that empower customers to submit their payments — or potential questions or disputes — quickly and easily.
Customer communications
It bears repeating: consistency is critical for creating a successful I2P chain. When you can outsource your dunning and similar messaging efforts to technology, you can better ensure that these vital touches will be made on schedule. Further, most of these automated communication functions will incorporate multi-channel support, making your messages much more likely to be received and heard.
Cash application
Ensuring that your incoming payments are matched with their corresponding invoices can be challenging, mainly if your business deals with high sales volumes or has multiple statements sent out to any given customer at any given time. However, using AI-powered cash application technology in these cases can help you ensure that these funds are being correctly applied without tying up your staff, even in the case of a duplicate or partial payment.
Anti-fraud measures
Keeping your funds and customers safe should be a priority for every business. Automation can also help limit the reach and potential impact of bad actors outside and inside your organization. Your invoice workflows will ideally include automated validation processes confirming that outgoing records and incoming payments contain accurate data. At the same time, you should also look for a solution that delivers role-based access to users, which helps limit who can manipulate this critical financial information and the overall potential for malfeasance.
How I2C automation works with Invoiced
Regarding I2C processes, our Accounts Receivable Automation software delivers the most value for these critical efforts. Our system boasts streamlined billing workflows and extensive integration capabilities to keep your invoices and data moving seamlessly with little human intervention. At the same time, our Smart Chasing function can accelerate and automate your dunning efforts with multi-channel touches that keep outstanding payments at the front of your customers’ minds.
In addition, our AI-powered Cash Application feature will help ensure incoming funds are correctly routed to the appropriate customer account. And thanks to the global payment capabilities offered by Flywire software, we can now support transactions in over 140 currencies.
Schedule a demo of our software today to learn more.
