Product Code: 70385
The Accounts Receivable Automation (A/R Automation) Market is expected to register a CAGR of approximately 12.69% during the forecast period (2020 - 2025). As the companies are increasingly making credit sales, accounts receivable management plays an integral role in helping the businesses complete their order-to-cash process.
- Accounts Receivable Automation helps maintain the cash flow of the company by providing a quick and accurate stream of invoices to customers and help the company maintain stable growth in the future. Maximum adoption is expected to be witnessed amongst the small and medium enterprises due to the increasing needs for these businesses to automate their processes as it helps them optimize their costs to a great extent.
- Also, various solution providers are exclusively providing A/R automation solutions for SMEs to integrate these solutions seamlessly into their existing processes. For instance, in May 2020, an A/R Automation specialist, HighRadius, launched the RadiusOne A/R Suite for midsized businesses. It provides simple user experience and faster time-to-value, which helps mid-sized businesses to make Accounts Receivable automation a key catalyst for business growth.
- With the growing adoption of technologies like cloud computing, AI, digitization, and Automation in several industries, the demand for automating the order-to-cash cycle is also increasing. A/R automation is also evolving to support several digital payment methods, like credit/debit cards, Paypal, Paytm, and many others, to help the companies expedite the process of payment from their customers.
- Moreover, due to the global coronavirus outbreak, companies, especially the small and medium-sized businesses, are facing issues in collecting cash from their customers on a timely basis, resulting in a lag in cash flows due to a slowdown in A/R collections. Hence, these companies are actively demanding automation solutions like sophisticated work-from-anywhere accounts receivable solutions. This enables them to continuously and effectively monitor the risk of their entire customer portfolio and perform active collections.
Key Market Trends
BFSI Industry Expected to Exhibit Significant Adoption
- The retail industry is rapidly adopting automation in various processes, such as returns processing, workflow management, customer support management, accounting and finance, ERP management and marketing, and consumer behavior analysis. Also, it has been estimated that more than USD 2 trillion can be saved in a global workforce by automating almost half of the tasks performed by humans, especially in an emerging industry, like retail.
- Rapid growth in the e-commerce industry is an essential factor in the growth of the A/R Automation market, as online sales largely support and augment credit sales, further increasing the demand for effective accounts receivable processes.
- Online sales in the United States are expected to double, by 2023, reaching approximately 20 to 25% of the overall retail sector. According to The Census Bureau of the Department of Commerce, the estimate of US retail e-commerce sales for the fourth quarter of 2019, adjusted for seasonal variation, was USD 158.0 billion, which was an increase of 2.6% from the third quarter of 2019. Within the United Kingdom (UK), retail plays an essential role in shaping the economy and employs nearly 3 million people.
- In June 2019, HSBC launched Digital Accounts Receivable Tool (HSBC DART) simplifies and automates the flow of information between HSBC corporate clients and their customers in the receivables process. HSBC DART is expected to improve the supply chain, cut down on manual tasks, and enhance working capital efficiency for sellers. Such innovations and initiatives are expected to boost the adoption of A/R Automation tools in the Retail Industry.
North America Expected to Dominate the Market
- North America is expected to command a prominent share of the market over the forecasted period, owing to the increasing usage of the Accounts Receivable Automation solutions in the end-user industries, such as retail, IT and Telecom, BFSI, and healthcare.
- Also, the region's prominence in these industries, combined with innovation in the A/R automation space, is further expected to boost the market growth. To foster innovation in the market, solution providers are collaborating with global players to enable them to expand their foothold and provide A/R automation solutions in the region.
- For instance, in June 2020, GoCardless, providing recurring payment solutions, partnered with YayPay to enable YayPay to integrate GoCardless's global network with its A/R offerings to provide direct debit payments to its expanding base of customers in North America and Europe.
- Due to the recent outbreak of COVID-19, the human resource crunch observed by enterprises in industries is expected to further influence the adoption of A/R automation solutions during the next two years, thus, driving the demand for such solution vendors.
The competitive landscape of the Accounts Receivable Automation Market is moderately fragmented owing to the presence of significant market players globally. The market players are viewing strategic collaborations and acquisitions as a lucrative path towards expansion and strengthening their global foothold. The solution providers are also making several innovations in the market to enhance the value of their solutions and enhance their customer base. The small and medium solution providers are also seeking funds from various sources to strengthen their R&D capabilities and emerge as a strong player in the market.
- March 2020 - Fuji Xerox expanded its partnership with the A/R automation provider Esker, to expand its Esker Accounts Receivable solution to the Asia-Pacific. This will enable the company to expand its global presence and strengthen its foothold globally.
- February 2020 - Genpact partnered with HighRadius to provide improvements to enterprise accounts receivable and jointly provide digital automation solutions powered integrated with advanced machine learning and artificial intelligence.
- November 2019 - DadeSystems, a fintech startup that offers accounts receivables automation solutions for organizations, raised a USD 9 million growth funding to grow its suite of solutions, collectively referred to as DadePay.
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Table of Contents
- 1.1 Study Assumptions & Market Definition
- 1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
- 4.1 Market Overview
- 4.2 Market Drivers
- 4.2.1 Improve Business Efficiency by Improving Cash Flow and Reduce Costs and Accounting Cycle Time
- 4.2.2 Increasing Adoption of Technologies like Cloud Computing and AI
- 4.3 Market Restraints
- 4.3.1 Complex Procedure of Invoicing and Payment Management
- 4.3.2 Privacy and Security Concerns
- 4.4 Industry Attractiveness - Porter's Five Forces Analysis
- 4.4.1 Bargaining Power of Suppliers
- 4.4.2 Threat of New Entrants
- 4.4.3 Bargaining Power of Buyers/Consumers
- 4.4.4 Threat of Substitute Products
- 4.4.5 Intensity of Competitive Rivalry
- 4.5 Assessment of Impact of Covid-19 on the Market
5 MARKET SEGMENTATION
- 5.1 By Component
- 5.1.1 Solution
- 5.1.2 Services
- 5.2 By Deployment Mode
- 5.2.1 On-Premise
- 5.2.2 Cloud
- 5.3 By Size of the Organization
- 5.3.1 Small and Medium Enterprises
- 5.3.2 Large Enterprises
- 5.4 By End-user Industry
- 5.4.1 BFSI
- 5.4.2 IT & Telecom
- 5.4.3 Media and Entertainment
- 5.4.4 Healthcare
- 5.4.5 Transportation & Logistics
- 5.4.6 Other End-user Industries (Travel & Tourism, Food & Beverages, Government, Manufacturing)
- 5.5 Geography
- 5.5.1 North America
- 5.5.2 Europe
- 5.5.3 Asia-Pacific
- 5.5.4 Latin America
- 5.5.5 Middle-East & Africa
6 COMPETITIVE LANDSCAPE
- 6.1 Company Profiles*
- 6.1.1 SAP SE
- 6.1.2 Oracle Corporation
- 6.1.3 SK Global Software
- 6.1.4 YayPay Inc.
- 6.1.5 Kofax Inc.
- 6.1.6 Workday, Inc.
- 6.1.7 Netsend (Corcentric LLC)
- 6.1.8 HighRadius Corporation
- 6.1.9 Qvalia AB
- 6.1.10 Vanguard Systems, Inc.
- 6.1.11 Bill.com, LLC (Size of the Organization)
- 6.1.12 Comarch SA
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS