For many finance teams, cash flow surprises seem to strike at the worst possible times. Even with detailed forecasts, unpredictable inflows and outflows can disrupt operations, stall strategic initiatives, and create ripple effects across the organization.

The root of these challenges often lies in outdated AR systems. A recent report found that 59% of U.S. businesses attribute poor cash flow and forecasting capabilities to manual processes, which not only slow down collections but also create bottlenecks, making it nearly impossible to predict and prevent cash flow gaps.

Adding to the urgency, a survey revealed that 25% of mid-market companies experience cash flow shortages at least once a quarter and predicted in 2024 alone, over 90% would turn to external working capital to fill the gaps. But external funding, while seemingly a quick fix, often comes with hidden fees, restrictive terms, and delays that complicate recovery.

The question is: What if you could address cash flow challenges in-house, eliminating the need for costly external solutions?

Why External Capital Isn’t Always the Answer

When businesses face cash flow shortages, external capital can feel like the only option. But in practice, it often comes with downsides that are hard to ignore:

• Hidden Costs: Beyond interest rates, external funding often includes personal guarantees and restrictive terms that limit flexibility.
• Operational Delays: Loan approvals and fund disbursement can take weeks, leaving teams scrambling to manage cash flow in the meantime.
• Strategic Limitations: Dependence on outside funding can prevent teams from seizing time-sensitive opportunities.

Instead of relying on external capital, finance teams can turn to a more sustainable solution: optimizing their Accounts Receivable (AR) and Cash Flow Management processes to drive faster inflows and build greater cash flow predictability.

The Root Cause: Inefficient AR Processes

For most companies, cash flow surprises don’t happen in a vacuum—they’re a symptom of inefficiencies in AR management. Three common challenges stand out:

1. Manual Collections: Teams spend hours on repetitive tasks like chasing payments through emails, calls, and spreadsheets.
2. Lack of Visibility: Without real-time insights into AR aging or payment behaviors, it’s nearly impossible to predict cash flow gaps before they occur.
3. Reactive Management: Teams stuck in “firefighting mode” are always playing catch-up instead of staying ahead of potential issues.

To take control of cash flow, finance teams need a proactive, scalable approach that aligns inflows with outflows and reduces friction in the AR process.

How Companies Are Staying Ahead of Surprises

Leading companies are turning to automation to overcome these challenges and transform their cash flow management. By automating workflows and leveraging real-time data, finance teams can prioritize collections more effectively, reduce manual workloads, and plan with confidence.

Accelerating Cash Inflows

For example, Couchbase has achieved remarkable results by automating their AR processes. With better visibility into payment behaviors and proactive management, they’ve reduced DSO by 10 days while maintaining near DSO/DPO parity—all without adding headcount.

“Tesorio lets me be proactive in managing cash. Couchbase hasn’t raised capital in three years because we have better cash flow performance and can live off what we bring in.”
– Greg Henry, CFO at Couchbase

Reducing Aged Receivables

Veeva, another leader in cash flow management, reduced their 90-day aged receivables by 50% after implementing AR automation. This change didn’t just free up working capital—it gave their team the flexibility to adjust collections strategies on the fly.

“The payment date prediction feature has helped improve the accuracy of our collection forecasts. I can review things daily, weekly, and make changes as needed.”
– Michael Renner, Senior Manager of Accounts Receivable at Veeva

Scaling with Confidence

For businesses managing high-volume AR portfolios, automation isn’t just a nice-to-have—it’s a game changer. Managing thousands of invoices manually is not only time-consuming but prone to delays and errors that can disrupt cash flow.

“Tesorio helps our global accounts receivable team manage a large A/R portfolio—$100,000,000+ with more than 10,000 open invoices every month. With Tesorio, we have seen increased cash flow each month, while reducing past-due A/R,” said Will Young, Senior AR Manager at Smartsheet.

This kind of operational efficiency not only ensures a healthier cash position but also allows teams to focus on strategic priorities, rather than firefighting overdue payments.

Staying Agile If Surprises Arise

Even the most carefully managed cash flow systems can face unexpected disruptions—market volatility, customer delays, or unforeseen expenses. What sets resilient finance teams apart is their ability to respond quickly and strategically to these surprises.

At Finquery, leveraging Tesorio’s AR and cash flow management tools gave the team the visibility and control they needed to navigate surprises with confidence:

“At Finquery, Tesorio helped us reduce our DSO from over 70 days to 36 days, freeing up cash flow without increasing headcount. When disruptions arise, this visibility gives us the agility to respond quickly and strategically,” said Justin Smith, CFO at Finquery.

With Tesorio, Finquery was able to:

• Maintain real-time visibility into their cash position.
• Adjust payment schedules to preserve liquidity during uncertain periods.
• Prioritize collections for high-impact accounts and address potential gaps proactively.

This combination of real-time insights and automation didn’t just reduce DSO—it ensured Finquery could handle surprises without disrupting long-term goals or increasing operational strain.

Three Steps to Master Cash Flow

AR and cash flow management is more than just tracking inflows and outflows—it’s about optimizing processes that ensure predictability, flexibility, and control. Here are three actionable steps to help finance teams stay ahead:

1. Automate Workflows: Replace manual, error-prone processes with automation to accelerate collections, prioritize high-value accounts, and free up your team to focus on strategic cash flow initiatives. This not only improves AR efficiency but also ensures cash inflows are predictable and timely.
2. Gain Real-Time Insights: Leverage tools that provide live forecasts, visibility into AR aging, and customer payment patterns. Live insights into your cash position allow you to align inflows with operational needs and make data-driven decisions to avoid disruptions.
3. Adopt Proactive Strategies: Use predictive analytics and real-time cash position monitoring to stay ahead of potential shortfalls. With a clear view of liquidity, finance teams can dynamically adjust strategies—speeding up or slowing down payments to meet targets, improve working capital, and avoid reliance on external funding.

The Path to Financial Agility

Cash flow surprises don’t have to be inevitable. By addressing inefficiencies in AR and cash flow management and embracing automation, finance teams can not only reduce their reliance on external capital but also position their organizations for long-term success.

The results? Faster inflows, improved predictability, and the freedom to focus on what matters most: growth.

Are you ready to leave cash flow surprises behind? Let’s connect to explore how AR automation can help your team take control and stay ahead of the curve.