How to Automate Accounts Receivable (AR) Collections in Logistics
Late payments are a major challenge in logistics. Operations run on tight margins, and delays in accounts receivable (AR) collections can disrupt cash flow and profitability. Traditionally, staff spend hours chasing unpaid invoices through emails or phone calls.
Introduction
By implementing AR dunning automation, you can automatically send reminders, provide payment links, and escalate overdue invoices without manual effort. This ensures faster collections, improved liquidity, and reduced workload for finance teams.
Step 1: Map the Workflow
- Trigger: Invoice is issued in TMS/ERP.
- Reminder Flow: Schedule reminders at 7, 14, and 30 days overdue.
- Payment Options: Send link to online payment (Stripe, PayPal).
- Escalation: If invoice >60 days overdue, escalate to finance manager.
- Closure: Once paid, mark invoice as closed in TMS/ERP.
Step 2: Choose Your Tools
- Source System: Linbis TMS, QuickBooks, Xero, SAP.
- Automation: Zapier, Make, Power Automate.
- Payment Links: Stripe, PayPal, Square.
- Notifications: Email, WhatsApp (Twilio), Slack, Teams.
- Dashboard: Power BI, Google Data Studio.
Step 3: Build the Automation (Example in Zapier)
- Trigger: New invoice issued in Linbis or QuickBooks.
- Schedule Reminders:
- Day 7: Friendly reminder with payment link.
- Day 14: Second reminder with late fee notice.
- Day 30: Final warning.
- Day 7: Friendly reminder with payment link.
- Escalate:
- If invoice >60 days overdue, send alert to finance manager in Slack.
- If invoice >60 days overdue, send alert to finance manager in Slack.
- Auto-Close: Once Stripe payment received, update invoice in TMS.
Step 4: Test the Workflow
- Issue test invoice.
- Verify reminders are sent on schedule.
- Confirm payment updates invoice automatically.
- Check escalation works after overdue threshold.
Step 5: Optimize
- Segment clients by payment behavior (VIP vs. high-risk).
- Add late fee automation.
- Provide payment plan options automatically.
- Sync with CRM for customer account history.
Benefits of AR Dunning Automation 📈
- Faster Payments: Reduce average days outstanding (DSO).
- Efficiency: Finance team spends less time chasing invoices.
- Improved Cash Flow: Better liquidity for operations.
- Professionalism: Clear, consistent communication with customers.
- Scalability: Manage thousands of invoices automatically.
automate accounts receivable collections Conclusion
Automating AR collections (dunning) is one of the most effective ways to improve financial health in logistics. By setting up automated reminders, payment links, and escalation workflows, companies can reduce overdue invoices and secure predictable cash flow.
Tools like Linbis, QuickBooks, Zapier, and Stripe make it simple to set up workflows that keep payments on track while freeing up finance teams for strategic work.