From Float to Funds: Cutting Lag Time to Speed Up Cashflow

Every day of delay in receiving usable cash impacts your company’s ability to operate with confidence. In accounts receivable (AR), that delay — known as float time — is the gap between when your customer initiates payment and when those funds actually become available to you.

Float can take many forms: 

• mail float from slow invoice delivery
• processing float from lockbox services & manual posting
• availability float when funds sit in transit before clearing

Throw in some internal lags from reconciliation and credit approvals, and even strong businesses can find themselves waiting weeks for cash that should already be working for the organization.

Why does reducing float matter? It directly improves cashflow, liquidity and the average collected balance — three levers that determine whether a business has to rely on short-term borrowing or can fund growth from within. According to Gartner, CFOs are under mounting pressure to strengthen working capital. That makes eliminating unnecessary float not just an operational win but a financial resilience strategy.

Traditional AR processes often introduce more lag than they remove. By addressing the root causes of float and moving toward streamlined, digital-first practices, you can shrink lag time from weeks to days — accelerating receivables, reducing DSO and strengthening your overall financial stability.

Breaking Down Float Time in AR

Float is rarely the result of one issue; rather, it builds up across several delays throughout the AR cycle:

• Mail float: slow invoice delivery or customers still relying on paper checks; each postal delay adds days to receivables
• Processing float: lag from lockbox services, manual data entry or batch bank processing
• Availability float: the transit period between when a payment is posted & when it’s cleared so the funds are usable
• Internal float: manual bottlenecks like invoice errors, lengthy approvals, reconciliation lags or poor AR aging schedule management

But there’s one solution that can reduce every type of float — eliminating manual touch points and adopting faster, more efficient processes.

Why Reducing Float Strengthens Your Average Collected Balance

Every day that cash inflow is delayed has a measurable impact on your company’s financial health. By cutting float, you can:

• Accelerate collections, reducing DSO & improving the AR aging schedule
• Increase the average collected balance, putting more cash to work, faster
• Avoid costly borrowing, freeing liquidity to reduce reliance on short-term credit lines
• Reduce risk, improving financial resilience with fewer write-offs & stronger credit control

Reducing float isn’t just about speeding things up, it’s about making the balance sheet stronger, more predictable and less dependent on external financing.

5 Ways AI-driven Automation Reduces Float

1. Accelerate Invoice Delivery

• Pain point: Delays in sending invoices cause longer mail float.
• Solution: AI-powered invoice delivery ensures accuracy, complies with global e-invoicing mandates and respects your customer’s preferences.
• Impact: Enjoy faster delivery, lower costs and reduced DSO. Toshiba, for example, achieved $342,000 in ROI after automating their invoice delivery.

2. Enable Faster Payments

• Pain point: Restricting customers to checks or limited payment terms delays cash inflow.
• Solution: Self-service portals like Esker’s offer ACH, cards, direct debit and support for 135 currencies. Options including autopay, early payment discounts and the use of AP portals incentivize faster payments.
• Impact: Transforms float from days into hours, with real-time visibility into payment processes.

3. Simplify Cash Application

• Pain point: Manual reconciliation slows fund availability and leaves cash stranded.
• Solution: An AI-powered cash application process automatically matches payments to invoices, even with complex scenarios like short pays or lump sums.
• Impact: You get immediate visibility, faster access to funds and smoother customer experience. True Alliance, for example, eliminated manual cash allocation processes, achieving faster reconciliation and improved overall efficiency. 

4. Strengthen Credit & Collections

• Pain point: Risky credit extensions and manual collections delay recovery.
• Solution: Automated credit approvals, real-time monitoring and AI-driven collections prioritization help AR teams focus where it matters most.
• Impact: Experience reduced DSO, fewer write-offs and stronger customer relationships. In fact, AAH Pharmaceuticals reduced their credit application processing time by 83%.

5. Improve Deductions Management

• Pain point: Customer deductions and disputes create significant delays, often tying up cash for weeks or months. Many AR teams struggle with visibility into the root cause of deductions, leading to revenue leakage and extended Days Deductions Outstanding (DDO).
• Solution: An automated deductions management process streamlines the capture, validation and resolution of deductions. AI-driven recognition technology identifies the reason for the deduction, links supporting documents and routes cases through configurable workflows for fast resolution.
• Impact: AR teams gain real-time visibility into the deductions pipeline, prevent “deduction creep” and free up cash faster. By resolving disputes quickly and accurately, businesses protect margins and improve customer relationships.

How End-to-End AR Automation Helps

When viewed as a single cycle, AR is highly interdependent. A delay in invoicing or collections ripples through the entire process. Esker’s Accounts Receivable Suite removes these bottlenecks by:

• Connecting credit, invoicing, payments, cash application, collections & deductions in one platform
• Providing unified dashboards for real-time visibility into float, AR aging schedules & average collected balance
• Enabling collaboration across departments to remove bottlenecks & cut lag time at every stage

The result? Float time shrinks from weeks to days, accelerating cashflow end-to-end.

Best Practices for Reducing Float

1. Audit your AR cycle to identify sources of mail, processing, availability and internal float.
2. Move away from paper by digitizing invoicing and payments. Instead, run e-adoption campaigns to convert customers from mail-based invoice delivery to electronic delivery like email, AP portals, and Edi.
3. Encourage digital adoption with early payment discounts and self-service portals.
4. Automate cash application to instantly allocate payments and reduce availability float.
5. Leverage predictive analytics to optimize collections strategy and strengthen credit control.

How to Start Reducing Float in your AR Process Today

1. Measure your current float time across all categories.
2. Identify top bottlenecks — invoice delivery, payment posting, collections or deductions.
3. Pilot automation in one process to start, such as invoicing or cash application.
4. Expand to end-to-end AR automation for maximum impact.
5. Track KPIs like DSO, CEI, DDO and average collected balance to measure results.
6. Leverage a solution provider, like Esker, to help identify customers who may receive a printed invoice, but accepts email invoices from their vendors. (Or on the flip side, pays by paper check and pays others with ACH). 

Reducing float time is about more than faster payments — it’s about unlocking working capital, strengthening liquidity and building long-term resilience. By cutting lag time across invoicing, payments, cash application and collections, you can accelerate your average collected balance and reduce your reliance on borrowing. With AI-driven automation, float time can shift from weeks to days, helping AR leaders meet the CFO’s mandate for stronger, more predictable cashflow.

Ready to reduce float time and unlock working capital? Discover how Esker’s AI-powered accounts receivable solution can accelerate cashflow across every touchpoint- watch an on-demand demo of our solutions now.

Why Esker?

Esker is more than an AR automation provider — we’re a partner in financial transformation. Here’s why finance leaders choose Esker:

• End-to-end visibility across credit, invoicing, payments, collections, deductions & cash application
• Global compliance with e-invoicing regulations in 60+ countries
• AI-driven intelligence for predictions, automation & real-time insights
• ERP integration with any system, supporting hybrid environments
• Scalability to grow with your organization & handle complex global AR needs
• Collaboration tools that break down silos & unite finance teams

Esker enables CFOs, controllers and AR managers to keep valuable funds from “floating” away.

Ready to get started? Get a free, personalized demo of Esker’s AR solution now.