Operating a business with outstanding customer payments tied up in clunky, paper-based processing costs time and money. According to an IOFM survey, almost half of all organizations lose the equivalent of 16+ days per year chasing late customer invoices. Even worse – the Association of Financial Professionals estimates that around 2% of all B2B invoices end up in the hands of customers who never intend to pay them.
Thankfully, accounts receivable (AR) automation delivers transformational working capital efficiency gains. Leading solutions condense traditionally disjointed AR tasks like invoicing, sending payment reminders, cash receipting and reporting onto a single intuitive platform. Adoption is surging with 61% of businesses now leveraging AR automation – rising to 76% over the next two years.
This guide will explore the top 10 accounts receivable software tools to seamlessly improve collections and accelerate cash flow. With options tailored to companies from promising startups to billion-dollar global conglomerates, uncovering the right solution for your needs is now simply an exercise away!
Jump Ahead:
Core Capabilities to Look For
Centralizing collections on autopilot with accounts receivable platforms typically encompass five foundational pillars:
1. Invoicing & Billing
Creating, delivering and tracking customer invoices is simplified. Bulk generate recurring invoices based on set schedules. Encrypted cloud storage keeps documentation safe while enabling anytime, anywhere access across devices.
2. Payments & Cash Allocation
Accept instant online payments via credit card, ACH or wire transfers. Automated posting across integrated accounting systems like QuickBooks and NetSuite means you stay Cash Flow Positive!
3. Activity Tracking & Reporting
Detailed visibility into AR performance through overview dashboards and drill-down reporting filters. Track metrics like days sales outstanding (DSO), bad debt ratios, disputed invoices etc.
4. Collections Management
Automated or tailored reminders via email and SMS ensure customers are nudged to pay before invoices become delinquent. Role-based tiered support helps recover delayed or disputed payments.
5. Process Workflows
Customizable rules unique to your business orchestrate steps like sending past-due notifications, credit status reviews, payment write-offs etc.
Beyond these table stakes, differentiation emerge around factors like:
- Integrations: Do out-of-the-box connectors or open API exist for your tech stack?
- Configurability: Is tailored customization available for unique processes and workflows?
- Analytics: Are reporting engines and dashboarding powerful enough for data-driven decisions?
- Omnichannel: Does the solution consolidate online and offline payments in one unified interface?
Now let‘s explore the top 10 leading options across the accounts receivable automation spectrum.
Top AR Software Recommendations By Business Size
Startups
As a lean startup or bootstrapped small business, optimizing working capital efficiency from onboarding new customers to collecting outstanding receivables is critical. Easy-to-implement cloud-based solutions require minimal configuration provide the best returns here over complex systems requiring heavy customization.
I recommend QuickBooks and Invoiced here to save time from manual reconciliation hassles and consolidate invoicing with core accounting on one automated platform.
Small Business
With established processes but limited internal bandwidth due to a modest accounts receivable staff, solutions promoting collaboration and transparency across teams make an impact. Buyers in services-focused industries like marketing agencies, law firms and contractors fall under this bracket.
My top picks are Melio for the intuitive interface and Chaser for making collections engaging for both staff and customers.
Midsized Firms
Scaling transaction volumes, overseas expansion and managing working capital across business units raises complexity. But bespoke platforms are still overkill necessitating robust but configurable solutions.
I would shortlist Bill.com for the end-to-end order-to-cash automation capabilities coupled with lower deployment barriers or Plooto for the flexibility afforded by open APIs.
High-Growth & Large Enterprises
For extensive accounts receivable portfolios, global operations and complex systems integrations, powerful enterprise-grade solutions become a requirement. Capability to model scenarios like the impact of dynamic discounting on cash flow using predictive analytics is an emerging differentiator.
My recommendations here include Sage Intacct for making short work of intricate multi-entity setups or BlueSnap to rapidly consolidate volumes across global payment modes.
Getting Implementation Right
While capabilities play a pivotal role, deriving full value hinges on change management during onboarding alongside sustained utilization. Here are 5 best practices to ace accounts receivable software implementation:
Pilot Before Wide Rollout
Limited launches allow testing integrations and tailoring workflows without high visibility hiccups. monumental shifts rarely succeed in one abrupt swoop.
Realign Processes to Software
Instead of force-fitting configurations to exactly mirror existing workflows, analyze if smart out-of-the-box capabilities can directly streamline operations.
Incentivize Adoption
Whether through initial training or ongoing performance metrics, ensure teams leverage the solution to eliminate lingering manual efforts.
Continuous Analysis
Ongoing monitoring instead of one-off audit checks allows leveraging reporting dashboards to drive efficiencies.
Communicate Changes
Keep key external stakeholders like customers informed on updates to invoicing, payment methods or collections processes.
The Future of Accounts Receivable Technology
While AR workflows have seen encouraging innovation recently, they have plenty of headroom left given how long paper-based techniques lingered. Two massive opportunities are early detection of troubled invoices using artificial intelligence and bridging online and offline payments on converged platforms.
Predictive Analytics & Machine Learning
Historical data fuels algorithms predicting likelihood of on-time payments for prioritized follow-ups or adjusting credit terms through scenario analysis on expected cash flow impact.
Omnichannel Payments
Supporting newer payment methods like mobile wallets, cryptocurrency alongside credit cards and ACH while maintaining back-end connectivity with legacy accounting systems delivers a seamless merchant and customer experience.
As fueled by the proliferation of connected cloud solutions and insights from Big Data, accounts receivable management promises to get a lot smarter very soon!
Wrap Up
Ditching manual accounts receivable drudgery for automated order-to-cash workflows translates cash tied up in stale spreadsheets to fuel business growth. The top 10 software recommendations and implementation guide above focused on needs varying from lean startups to big corporations should help identify the best-in-class solution tailored to your unique requirements!
Over to you – what accounts receivable bottlenecks can your company eliminate today?
