How To Choose The Best Accounts Receivable Automation Software

Chasing overdue invoices, managing endless spreadsheets, and juggling manual payment processes can drain your time and resources while also straining customer relationships. For small businesses, these inefficiencies in accounts receivable management can lead to cash flow gaps and unnecessary stress.

AR automation software solves these challenges by streamlining the entire process—automating invoicing, tracking payments, and sending reminders—so you can focus on growing your business instead of chasing payments.

In this guide, we’ll explore how AR automation can transform your operations, the features to look for, and the six best solutions to help your business thrive.

What is Accounts Receivable Automation Software?

Accounts receivable automation software is a tool that helps businesses automate the most critical parts of their accounts receivable process, including invoice creation, payment processing, and payment collection. It’s also valuable when scaling your accounting and finance teams, enabling them to focus on high-value tasks.

Most reputable AR automation tools offer features such as automated invoicing, omnichannel payment acceptance, account reconciliation, and more. These features can help your business maintain a healthy cash flow and eliminate common accounts receivable issues such as overdue payments and data entry errors.

Key Benefits of Using Accounts Receivable Automation Software

Here are some advantages of using the best AR automation software for your growing business:

• Better Cash Flow Management – Accounts receivable automation software enhances cash flow management by providing real-time oversight of outstanding invoices and payment statuses. Automated reminders, faster invoicing, and integrated payment options help reduce delays, ensuring a steady cash inflow. This streamlined process allows your team to focus on resolving disputes and overdue accounts promptly, improving overall financial stability and planning.
• Reduces Manual AR Processes – Good AR automation software allows you to create accounts receivable workflows for critical processes, effectively eliminating repetitive tasks like manual data entry and resulting in efficient AR operations. Your finance team can also focus on valuable tasks like AR and cash flow forecasting.
• Eliminates Errors and Improved Customer Relationships – AR automation tools minimize errors in accounts receivable processes by automating tasks like invoice creation, delivery, and payment reminders. This ensures accurate financial records, timely payments, and a smoother payment experience, ultimately improving days sales outstanding (DSO) and strengthening customer relationships.

6 Main Features to Look for in Accounts Receivable Software

Now that you know the basics of accounts receivable automation software and its benefits, here are some key features you must find when searching for accounts receivable software for your small business:

Feature #1: Automated Invoicing

The first feature you must consider is automatic invoice creation. Your AR automation solution must allow you to create professional invoices in line with your branding or with customizable templates. Being able to track the invoice delivery status in real time and support the volume of invoices your business needs to send daily is also handy.

Feature #2: Workflow Automation

Most modern AR automation solutions allow you to create workflows tailored to your business’s processes and policies. This includes creating an accounts receivable workflow for timely and accurate invoicing, automated reminders, invoice approval, and other critical processes for managing receivables.

Feature #3: Improved Customer Management Tools

Your chosen AR automation tool must have effective customer management features, including a secure, self-service portal where they can access their invoices, process payments, and view their payment history. The portal must also be user-friendly and can accept online payments.

Feature #4: Comprehensive Reporting and Analytics Features

When reviewing various AR automation solutions, it’s critical to look at their reporting and analytics capabilities. This enables your financial team to monitor cash flow and check trends using built-in reports relevant to accounts receivables management, such as DSO, AR aging, etc.

Feature #5: Extensive Integration Support

Another key feature to consider is integration support. The best AR solutions allow you to connect seamlessly with other popular systems, like customer relationship management (CRM) apps, enterprise resource planning (ERP) systems, and accounting software. This lets you easily export data, helping you save more time and eliminate manual data entry.

Feature #6: Data Security and Compliance

An AR automation software that follows the latest security standards is crucial for your business. This includes having bank-grade security and advanced encryption to protect sensitive financial data and customer information. Your chosen AR automation vendor must also adhere to industry standards like ISO and CIS, and allow you to create backups in case of data loss.

6 Best Accounts Receivable Automation Solutions for Small Businesses

Below, we’ve compiled a list of the six best accounts receivable automation solutions for small businesses. Each software has been reviewed based on its standout features, pricing plans, and suitability for different use cases. Explore these tools to find the perfect match for your business and take a significant step toward financial automation and growth.

#1. Envoice

Use Case: Invoicing and bookkeeping automation for small businesses.

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Envoice is a powerful bookkeeping automation platform and expense management tool for various businesses. It uses self-learning AI to automate critical parts of the AP and AR process, such as invoicing and document collection. You can also create tailored workflows for seamless invoice approvals, ensuring you’ll have enough oversight of your company’s spending and cash flow.

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Standout Accounts Receivable Features

• AI-Driven Accounts Receivable Automation – Envoice allows you to automate AR tasks through AI-powered workflows. This allows you to create, send, and sync your invoices with your accounting software, enabling you to get paid faster. You can also create smart rules to ensure every invoice is accurate and delivered to the right client. Our platform also supports all major currencies and cryptocurrencies like Bitcoin.
• Enhanced Collaboration – Envoice lets you and your team collaborate seamlessly through team communications via the Envoice app. Team members can get real-time access to notifications, financial data, and updates, ensuring everyone is on the same page. Our platform also allows you to add your entire team at no additional cost.

Pricing

Envoice offers these pricing plans:

• Essential – The Essential plan is recommended for small businesses looking to automate bookkeeping. It starts at $7/company monthly.
• Business – The Business plan is for growing businesses looking to streamline pre-accounting processes. It costs $14/company monthly.

Register to Envoice today for a free 14-day trial. No credit card is required.

#2. Xero

Use Case: Simple invoicing for startups and freelancers.

Xero is a comprehensive accounting software mainly for small businesses and self-employed individuals. It’s an effective tool for invoice management, payment processing, and client management. It also has built-in reporting features for checking accounts receivable and payable trends, including AR aging, profit-and-loss reports, and cash flow statements.

Standout Accounts Receivable Features

• User-Friendly Invoicing – Xero has an easy-to-use invoice creation tool, allowing you to create an invoice from scratch and add your business’s logo and colors. You can easily search for a specific invoice using various fields and search filters.
• Robust Payment Features – Xero lets you use online payments on your invoices via its Stripe integration. This enables your clients to pay their sales invoices through credit and debit cards and digital wallets.

Note: Xero has limited workflow automation tools on its platform. If you want software to automate your AP and AR processes, consider an add-on like Envoice. Our platform allows you to create workflows tailored to your business needs and seamlessly integrates with Xero. Reach out to us today!

Pricing

Xero has the following pricing plans:

• Starter – The Starter plan begins at $29 monthly.
• Standard – The Standard plan costs $46 monthly.
• Premium – The Premium plan starts at $69 monthly.

#3. HighRadius

Use Case: AR and order-to-cash automation software

HighRadius is an AI-driven AR automation platform for managing accounts receivable. It uses AI for its order-to-cash features, including tools for managing key aspects like collections, deductions, and credit.

Standout Accounts Receivable Features

• AI-Powered Cash Application – HighRadius uses AI for complex cash application processes, making remittance processing and check deposits faster and more accurate. The platform also automates time-consuming tasks like deduction coding and exception management.
• Effective Collections Management – HighRadius has tools for proactive cash collection to avoid late payments. They can send automated follow-ups and past-due notices to your long-tail customers, allowing you to reach them for overdue payments.

Pricing

HighRadius offers a pay-as-you-go pricing scheme. However, you’ll need to contact their sales team to get a custom quote.

#4. BILL

Use Case: Invoicing and AR automation tool

BILL is a cloud-based invoicing and billing platform for multiple businesses. It features tools for automating key AP and AR processes, including invoice management, expense tracking, and payment processing.

Standout Accounts Receivable Features

• Powerful Invoice Management – BILL has robust invoice management features, allowing you to create personalized invoices in the platform and track the status of each invoice when sent to fellow BILL users. However, you’ll need to track each invoice manually when your client doesn’t use BILL.
• Self-Service Customer Portal – Your clients can pay you directly on BILL through their Customer Portal account. The platform mainly accepts online payment methods like ACH, credit cards, or Auto Pay.

Pricing

BILL offers the following pricing tiers:

• Essentials – The Essentials plan costs $45 per user monthly.
• Team – The Team plan begins at $55 per user monthly.
• Corporate – The Corporate plan costs $79 per user monthly.

BILL also offers an Enterprise plan for large businesses needing premium support. Contact their sales team to learn more.

Note: BILL could cost your business more as they charge per user monthly, greatly limiting your team’s collaboration. If you want a budget-friendly and effective bookkeeping automation platform, try Envoice. Our platform allows you to create tailored workflows for your business and add your entire team at no additional costs. Contact us to learn more!

#5. Billtrust

Use Case: Effective cash application solution.

Billtrust is a robust credit management and cash application tool for various businesses. It’s effective for tracking remittances, managing credit applications, and more. Billtrust also has tools for multi-channel invoicing and collection management.

Standout Accounts Receivable Features

• Intelligent Cash Application – Billtrust uses AI for its cash application tools, ensuring strong match rates between incoming invoices and remittances. The software reduces manual processes, resulting in an accurate and faster payment application.
• Streamlined Credit Management – Billtrust makes your credit process efficient by safely collecting sensitive credit information, allowing you to make informed credit decisions. You can also process applications faster through self-service administration tools and workflows.

Pricing

To know more about Billtrust’s pricing plans, contact their sales team.

#6. FreshBooks

Use Case: Accounting software for startups and small businesses.

FreshBooks is a popular accounting software for small businesses, mainly those who send multiple invoices daily. It features robust tools for invoicing, client management, and payment processing.

Standout Accounts Receivable Features

• Invoicing Features – FreshBooks lets you create professional and personalized invoices based on your brand. You can create recurring invoices and send an unlimited amount to various clients.
• Online Payment Processing – You can accept online payments from your clients through FreshBooks Payments powered by Stripe. It lets your customers pay you directly through invoices and multiple online payment options.

Pricing

FreshBooks has the following pricing plans:

• Lite – The Lite plan costs $19 per month.
• Plus – The Plus plan starts at $33 per month.
• Premium – The Premium plan begins at $60 per month.

FreshBooks has a Select plan for enterprises looking for exclusive support and lower ACH fees. Contact their sales team to know more.

Final Thoughts

Modern AR automation software allows you to increase cash flow by reducing repetitive tasks and minimizing errors. Besides considering your budget, you must look for key features like workflow automation and streamlined invoicing to pick the best accounts receivable software solution for your business.

If you want a reliable pre-accounting platform for streamlining your AP and AR processes, choose Envoice. Our platform has robust tools to make your AR process more efficient, like smart invoicing and workflow automation. This reduces errors, ensures faster payment cycles, and improves cash flow management.

Optimize your workflows today! Standardize your AR process and enhance efficiency—implement our workflow solution now. Contact us to learn more!