Best Accounts Receivable Software

What Is Accounts Receivable Software?

Accounts receivable software automates your accounts receivable process by simplifying data entry, tracking customer payments, and sending billing reminders. You can use it to monitor customer invoices, payment due dates, and cash flow status.

The system also helps keep accurate records of all your financial transactions for tax purposes or other regulatory requirements. Reports generated from AR management software can be used to make data-driven decisions about pricing strategies, inventory management, and marketing campaigns.

What Does Accounts Receivable Software Do?

Accounts receivable solutions help you keep track of customer payments, invoices, and other essential information related to your financial operations. They can also automate your manual processes and reduce your document-tracking workload. It can also help with your approval proceedings like CapEx approval management or operational expenses confirmation.  

Benefits of Accounts Receivable Software

Accounts receivable management software can be a great asset to any business. It offers many benefits, such as.

1. Time and Cost Saving

The automated nature of the software ensures accuracy in your billing process, not to mention the immense amount of data entry it can easily handle. You don’t have to waste valuable resources and time on manual billing processes and manual data entry. 

2. Reduced Credit Risks

Having access to timely information helps reduce risk when providing credit to customers. Accounts receivable programs also allow you to assess your customer’s financial status before extending them credit and build better relationships with existing clients with a history of late payment or bad debt.

3. Seamless Client Communication

With detailed customer accounts information and tracking capabilities, you can reach out directly to customers with personalized messages and updates on the status of invoices or payments owed. Having a reliable platform for customer communications also helps reduce confusion about billing terms, due dates, and other financial matters.

4. Better Control of Resources

The enhanced ability to monitor and track expenses give you a better understanding of where your money is going and how best to allocate resources. You can also make more informed decisions about financial investments at all levels of your organization.

5. Decreased Paper Usage

By automating many accounting processes traditionally done by hand or with spreadsheets, you can stop relying on paper documents. Accounts receivable tools also eliminate the need for snail mail invoices and check deposits, as it allows customers to securely pay via electronic means, such as credit cards or ACH transfers. 

6. Workload Management

Accounts receivable software streamlines the entire AR process of invoicing and collecting customer payments. This frees up time that can be used for more important projects like researching new customer acquisition methods or exploring new markets. 

The software can also automate follow-up actions on overdue payments and provide customized reports on account history and performance at any given time.

7. Improved Cash-Out Position

With accounts receivable management tools, you can receive faster payments. The software also helps maintain strong liquidity levels, enabling you to make investments or take advantage of market opportunities. What’s more, the increased speed reduces the risk of late payments, meaning you’re more likely to get paid faster.

8. Improved Handling of Receivables

AR management software offers various methods for tracking customer payments, such as automated payment reminders and streamlined collection processes. It also helps identify overdue payments and ensure that customers are paying on time.

9. Short Payment Cycles

With an accounts receivable platform, you can get paid faster and more reliably. It also helps maintain a better customer relationship by offering more flexible and convenient online payment options. 

Additionally, shortened payment cycles allow you to avoid late fees or interest costs associated with delayed payments from customers who fail to meet deadlines.

What Is the Difference Between Accounts Receivable Software and Accounts Payable Software?

AR management software is used to process payments from customers, with the ultimate goal of maximizing annual revenue. It helps you keep track of customer invoices and ensures payment terms are met on time. AP software, on the other hand, helps you maintain control over your outbound expenses by tracking supplier invoices and managing vendor payments.

Features of Accounts Receivable Software

Here are several features that make accounts receivable collections software an invaluable asset for any business.

1. Online Bills Payment

When a customer makes a purchase, they enter their payment information into the system, which is then securely transmitted to your company's bank account for verification. Once verified, the funds are added to your balance sheet in real time.

2. Phone Call Management

Automatically records each incoming call made by customers. This includes all the necessary details, such as caller information and the duration of the conversation.

3. Document Management

Allows you to create folders and subfolders for file storage, set different levels of user access privileges, label documents with keywords or tags, and comment on specific documents. 

4. Reporting and Analysis

Gathers data and creates reports, such as sales figures, inventory levels, customer records, and web traffic analysis. The reports are then analyzed to identify trends and patterns in your company’s performance.

5. Reminders and Collections

Reminders allow you to set up automated emails or text messages that are sent when a customer’s payment is due. Collection tools are also available, such as credit checks, debt collection letters, and payment tracking systems.

6. Security and Privacy

Security features include encryption of data transmissions, two-factor authentication protocols, and limited access controls to prevent unauthorized changes or deletion of customer information.

Privacy features, on the other hand, control how account receivable information is used within your organization by enforcing policies that restrict access only to authorized personnel with specific roles.

7. Mobile App Support

Allows you to log into your account, view invoices, enter payments received, and track payment statuses through a mobile application. 

8. AI Predictive Cash Forecasting

Scans customer payment patterns and historical data and then combines them with current market information to accurately predict future payments. It also pulls relevant information from multiple sources, including past orders and customer credit records.

9. Invoice Dispute Management

The disputing process usually begins when a customer finds a discrepancy on their invoice and contacts the business to clarify it. After receiving notification of the dispute, AR management software immediately flags and records it in its system for easy tracking by both parties.

How to Choose the Right Accounts Receivable Software

To make sure you select the best accounts receivable software for your organization, here are some essential tips to help guide you in making your decision.

1. User-Friendly Interface

Consider whether the software enables users to easily navigate menus, personalize fields according to their company's needs, and efficiently manage data. The goal is you should be able to get up and running without needing much training or technical support from accounts receivable software companies.

2. Multiple Payment Options

An ideal solution should be able to process credit cards, debit cards, e-checks, and even cryptocurrency payments. This means customers can pay quickly and securely with the method they prefer. 

3. Mobile Friendly

This makes it easier to send invoices and follow up with customers in a timely manner. You can also keep your financial records organized as all information is stored in one place for easy retrieval when needed.

4. Comprehensive Dashboards and Reports

AR management software should give you instant visibility into all aspects of your account receivables, including current balances, aging buckets, cash flow projections, customer metrics, and invoice data—all from one convenient place. This will help ensure payments are made on time while still providing customers with great service.

5. Customization

See if the system allows you to create custom reports and payment schedules or link customer data with other software, such as invoicing, inventory, or financial management. The goal is you should be able to customize the software according to your specific needs. 

6. Online Invoicing

With an online invoicing system, you can create, send, and track electronic invoices easily. Customers can also pay their bills directly from the system without manual processing or paperwork.

7. Automation Follow-Ups

The software should allow you to set up reminders and notifications that will be sent automatically when invoices are due or overdue. It should also include options for sending emails or text messages and tracking customer responses.

8. Integrations

The integration capability will depend on your needs or existing systems. For example, you may need a tool that can integrate with payment gateways or invoicing platforms. Or the software should be able to connect with your current accounting software to streamline your financial processes. 

9. Implementation

First, ask how long it will take to set up the software. Then, see if there are any costs associated with the implementation. Some companies may offer a free initial setup, while others charge additional fees. Finally, make sure you understand who provides support during implementation and who’s responsible for system configuration. 

10. Security

The AR program should have these capabilities: strong encryption, access control, and frequent updates and patches. You can also look for additional security measures, such as external audit trails or real-time monitoring systems to keep track of who has accessed your data and when they did so.

11.  Scalability

If your business is growing rapidly and you need more staff to manage your accounts receivable process, you’ll want software that can handle increased transaction volumes without crashing or slowing down. 

Or maybe you're adding new features, such as automated billing and automated payment systems. These are all things that you should be able to do with scalable software in place.

12. Cost

Some programs may offer basic accounting solutions at no additional cost, while others may require extra fees for more advanced features, such as seamless integration with other accounting software or customization options. Some suppliers may also charge setup and installation fees. 

Top 5 Accounts Receivable Software

Accounts receivable software simplifies the process of tracking invoices and generates reports related to receivables. Here’s a list of the top 5 popular accounts receivable software that you can use to manage your finances:

1. Best for Freelancers and SMBs: Melio

2. Best Cloud ERP System for Finance: Sage Intacct

3. Best for Nonprofits and Small to Large Businesses: SoftLedger

4. Best for Small to Large Corporations: Oracle NetSuite

5. Best for Freelancers and Small Businesses: FreshBooks

1. Melio

Why We Choose Melio

The leading cloud-based financial management solution for freelancers and small-to-medium-sized businesses. It can sync with your existing accounting software. And the solution has powerful expense-tracking capabilities. 

Key Features

• Payment scheduling
• Multiple payment options
• B2B payment transactions
• Payment approval workflows

Pros

• Great customer support
• Free ACH transfers
• Ability to use a credit card

Cons

• Processing of business payments can sometimes be delayed
• Batch processing of payments can be improved

Pricing:

Contact Melio’s team to get custom pricing. Offers free trial. No setup fee. 

2. Sage Intacct

Why We Choose Sage Intacct

The perfect and affordable solution for nonprofit organizations and businesses of all sizes. It has a multi-entity management feature. And it has accounts receivable automation tools and workflow capabilities. 

Key Features

• Payroll management
• Cash flow and workflow customization
• Security features and access controls
• General ledger and configurable accounting system

Pros

• Allows attachment with entries
• Ability to pay bills directly on the platform
• Constant adding and updating of features

Cons

• Fixed asset and prepaid modules can be updated
• Very large transactions may take a very long time to load

Pricing:

Contact Sage Intacct’s team to get a custom quote. Offers premium consulting and integration services. No setup fee. 

3. SoftLedger

Why We Choose SoftLedger

The best cloud-based solution for SMBs and large corporations. It provides up-to-date data on accounts receivable and accounts payable. It also includes powerful analytics tools. And the software has an automated reconciliation process. 

Key Features

• Journals and reconciliations
• Primary and secondary ledgers
• Inventory tracking and automated invoicing
• Credit card processing

Pros

• Very engaging and supportive team
• User-friendly software
• Converts FX transactions with ease

Cons

• The cost for extra users can be highly expensive
• The cryptocurrency module is limited to only one currency

Pricing:

$979/month for SMBs. For enterprises, you may contact SoftLedger’s team to get custom pricing. Offers premium consulting and integration services. A setup fee is required. 

4. Oracle NetSuite

Why We Choose Oracle NetSuite

The top accounts receivable software for small to large corporations. It has a comprehensive financial management suite. And it provides real-time insights into KPIs like cash flow and balance sheet metrics. 

Key Features

• Audit trail visibility
• Tax management
• Flexible billing scheduling
• Integrated process workflow

Pros

• Seamless payroll services
• Employee data is easily searchable
• Reports can be customized

Cons

• Financial reporting modules could be simplified
• UI tends to appear a bit clustered for some users

Pricing:

Contact Oracle NetSuite’s team to get a custom quote. No setup fee. 

5. FreshBooks

Why We Choose FreshBooks

The best accounts receivable software for small business owners, freelancers, nonprofit organizations, and public administrations. It has an intuitive user interface. It also allows you to create custom reports and export them in various formats. And the software has project-tracking capabilities. 

Key Features

• Secure, self-serve portal for clients
• Automatic billing of late fees
• Real time tracking
• Comprehensive financial reporting

Pros

• Easy-to-use interface with great templates
• Customizable invoices
• Multiple payment options

Cons

• Some glitches in invoice processing
• Pricing plans can be a bit confusing

Pricing: Starts at $15/month for the Lite plan, $25/month for the Plus plan, and $50/month for the Premium Plan. Offers a risk-free 30-day free trial. 

Accounts Receivable Software Trends

As technology advances, there are several accounts receivable software trends that accounting firms should be aware of.

1. Predictive Cash Forecasting

With this technology, you can create accurate forecasts that allow you to better anticipate customer payments. It also helps you manage your working capital more effectively, optimize credit decisions, and take care of your overall financial health.

2. Electronic Payments

Make it easy to collect payments directly from customers with minimal hassle. The user-friendly interface also lets you set up your accounts, view transaction history, and manage payment options, such as credit cards or PayPal.

3. Process Automation

This enables you to integrate your existing accounting software with cloud-based solutions that are available around the clock. And with greater access to data anytime and anywhere, you can quickly react to changes in customer behavior or payment status without manually updating records or contacting customers directly.

4. Risk Management

The ability to monitor customer creditworthiness makes it easier to accept or deny new customers with confidence. Automated payment tracking can also prevent late payments or delinquent accounts from slipping through the cracks by sending timely reminders when payments are due.

Pricing Information of Accounts Receivable Software

The pricing structure for AR systems varies greatly depending on features, scalability, and integrations available. Entry-level accounts receivable software usually ranges between $9 and $99 a month. 

Enterprise-level solutions, on the other hand, start at $500 a month and usually require obtaining a custom quote from the vendor. These solutions offer advanced functionality, such as accounts receivable automation and reporting capabilities. 

Additionally, subscription-based models may provide lower upfront costs but involve additional long-term fees or monthly payments, which you should consider when evaluating pricing information. Nevertheless, free trials are available for most software. 

Conclusion

The right accounts receivable software can make a difference in your organization's financial productivity and customer satisfaction. Taking the time to understand your business needs, researching the best options, and testing out different solutions are key to finding what works for you. 

With all of the available resources, you can trust that you’ll find an ideal solution for your business. So don't hesitate—get started on finding the best accounts receivable software today!