How AI is rewriting the playbook for working capital management: a TL;DR for finance leaders

Working capital management is at an inflection point.

European businesses now spend 73 days a year – over 25% of the working year for a full time employee – chasing payments, at a cost of €275 billion to the economy (Intrum). Despite the availability of better-suited software, almost half of finance professionals still rely on Excel for debtor management (Onguard).

After years of tech investment in product development and customer-facing teams, the back-office financial operations teams of accounts payable (AP) and accounts receivable (AR) are ripe for innovation. A new wave of AI solutions are making it possible for AP and AR to catch up after years of neglect.

This is the short version of what’s changing — and why it matters. (For a more in depth exploration, download our white paper here.)

The make-or-break moment for AP and AR

Working capital teams are facing the same structural problems they’ve had for years, but under more external pressure than ever. Transaction volumes are rising. Liquidity is tighter. Market volatility is higher. CEOs expect AI-driven cost savings with limited to no tech budget. And finance teams are consistently asked to do more with less.

Accounts payable: stuck in manual mode

AP teams continue to battle with:

• Manual processes – 60% of AP professionals still manually key invoices (IFOL)
• Payment fraud – 65% of organisations report payment fraud, costing ~5% of revenue (Gitnux)
• Disputes and data errors – 33% of supplier statements contain discrepancies (Fiscal Technologies)
• Late payments and missed discounts due to slow processing
• Incomplete data – 20% of invoices contain missing information (Pegasus)

Accounts receivable: cash flow under pressure

AR teams face equally persistent challenges:

• Late payments – 40% of B2B invoices in the UK and 47.5% in France are paid late (Business Money, Atradius)
• Inefficient processes – 70% of companies report inefficient AR workflows (Zipdo)
• Manual dispute handling – 75% of SMBs manage disputes manually (PYMNTS & Amex)
• Bad debt – over 10% of invoices are never paid (InvoPilot)
• Limited trade credit offerings, preventing conversion of one-time, low value orders into large, loyal accounts

The real root causes

These problems stem from two fundamental issues.

First is a chronic underinvestment in technology. Only 14% of business leaders expect finance teams to use AI agents in the next 12 months (CB Insights), even as CEOs and investors demand automation-led cost savings.

Second is the contradictory workload of working capital management teams. AP and AR professionals are asked to perform repetitive, high-volume tasks while also making complex, high-stakes decisions. Context switching of this magnitude can:

• Reduce cognitive capacity by up to 20%
• Require 20+ minutes to refocus
• Cut overall productivity by as much as 40% (Reclaim.ai)

The mindset shift: from reaction to anticipation

Traditionally, working capital management is reactionary. Teams act after something goes wrong, relying on static credit data and periodic reviews.

Automation is driving a fundamental shift.

With agents handling individual cases, humans move up the stack – from firefighting to prevention, from cases to systems, from hindsight to foresight.

The result is more predictable liquidity, fewer surprises and better control of working capital.

Where agentic AI delivers value

The practical application of agentic AI in working capital falls into two areas:

1. Enhancing judgement and decision-making

Late payments cost:

• £11bn annually in the UK (DBT)
• €275bn per year across Europe (Intrum)

AI agents now go beyond traditional credit scores by continuously analysing:

• Payment behaviour and disputes
• News and market signals
• Social media and employee sentiment
• Review platforms like Trustpilot

This enables earlier intervention, safer credit decisions, and the ability to extend payment terms to a far wider pool of customers – often up to 80% of orders, compared to 10-20% with traditional approaches.

2. Absorbing volume and flagging edge cases

AI is exceptionally well suited to high-volume operational tasks such as:

• Invoice matching
• Cash application
• Data reconciliation
• Collections workflows

Research shows a 27% reduction in errors when AI handles data-heavy processes such as these (Zebracat).

Meanwhile, humans refocus on:

• Strategic decision-making
• Complex disputes
• Relationship management
• Refining agent behaviour and controls

The measurable impact

Cost savings in AP

Manual invoice processing costs £4-£25 per invoice in the UK. With automation, this drops to £1.50-£4 – that’s a 60–80% reduction (AccountingWEB).

Additional benefits include:

• 120%+ ROI in year one (Documation)
• 72% reduction in fraud and errors (CFOtech)
• Up to 90% fewer duplicate payments (IntelliChief)

Liquidity gains in AR

Meanwhile, AR automation can deliver:

• 10-20% reductions in DSO
• First-year ROI as high as 384% (IDC)

What does this mean in reality? For a business generating £5m per month, cutting DSO from 60 to 50 days can unlock £1.6m in additional working capital.

Revenue uplift

Automated credit decisioning doesn’t just protect cash, it drives growth. Merchants implementing automated trade credit report conversion rate uplift of ~40%, driven by faster, safer approvals and better offer rates.

What this means for finance leaders

Agentic working capital management isn’t theoretical, it’s already reshaping financial operations.

But the biggest challenge isn’t technology. It’s skills, mindset, and change management. The most successful CFOs will:

• Start with clearly scoped pilot projects
• Define decision boundaries and outcomes
• Invest in data quality and AI literacy
• Empower teams to learn by doing

The bottom line: AP and AR are no longer back-office functions. They are becoming strategic intelligence engines aligned with liquidity goals, informed by real-time data and driven by decisive action.

Download our new white paper to learn how AI is rewriting the playbook for working capital management – and what you stand to gain from automating your AP and AR workflows.