Accounts Receivable Automation Software for a Faster Payment

ABCAdda | Updated Jun 05, 2022

What is accounts receivable automation? This post looks at how it can help you eliminate time-consuming billing tasks and get paid on time. If you already know the basics, feel free to jump right into our tips on what to consider when choosing an AR automation provider on the topic.

Generating, sending, or uploading invoices manually to the customer portal is inefficient and can occur due to human error. Automate this process and free your claims team to focus on higher-value work.

Finance and accounting professionals in many industries benefit from using our accounts receivable automation software as it simplifies processes and virtually eliminates the potential for costly human error.

Before that, let us see What are accounts receivable?

What are accounts receivable?

Accounts receivable or AR is money owed to a company for products or services that have been issued but not yet paid for. Accounts receivable automation is sometimes confused with overdue bills, a company’s money to pay for purchases. Claims are cash inflows, and maturity dates are cash flows.

While some companies require a full deposit before a product or service can be provided, most only require a deposit. Some companies do not want any form of payment at all.

Delayed customer payments are listed on the balance sheet and require tedious data entry. If you don’t have a good system in place, these records can quickly spiral out of control, and the company can suffer losses.

3 Type of Account receivables

3 Type of Account receivables. Accounts receivable can be broken down into three categories to understand better what you do.

Accounts receivable can be broken down into three categories to understand better what you do.

  1. Accounts receivable: This is the amount payable for all purchases on credit. They are often operated within 2 months or 60 days and are considered a current asset.
  2. Receipt Note: Receivables are funded in the form of written promises or notes payable. It states that the customer owes the company a certain amount of money and is a written promise to pay a certain amount of money by a certain date. Notifications due after one year or more are fixed assets; less than one year are still considered current assets.
  3. More claims: Other receivables include advances on salaries, loans to employees and interest on banknotes. Therefore, they bear different financial risks to the company and are presented differently in the financial statements and records.

Now let us see! What is accounting software automation?

What is accounts receivable automation software?

Most people agree that being paid on time is critical to your operation. However, businesses of all sizes and industries often face invoicing bottlenecks. Slow and tedious distributions and non-compliance with customer billing requirements take time from your accounts receivable team, which directly impacts your cash flow.

This is where Accounting software automation comes into play. Accounts receivable automation software is simply a way to automate repetitive and time-consuming tasks for your claims team. It can also help you increase the likelihood of invoices being approved instantly for your customers to pay faster. This helps you save time and avoid common invoice errors caused by human error or ignorance of the customer’s invoice requirements.

Why automate your AR system?

Collecting data manually is very time consuming and time-consuming. Using automated accounts receivable systems places a burden on technology. While many consider automating the death book system, it is an opportunity to learn a new skill and lighten some of the workloads.

Automated accounts receivable systems are an opportunity for business leaders and accountants to earn more money – less work and stress for better results. You have a winning formula for accounts receivable when you have better, more efficient accountants and identical systems.

Automated programs can create invoices, send reminders, and create lists based on simple data entry. They can be integrated with various payment methods such as credit cards, bank transfers and payment gateways.

  • 1. Simple and easy: Automating your accounts receivable system takes time to format documents and duplicate jobs. During initial setup, data from your accounting system is automatically downloaded to the accounts receivable management software, and the two-way integration keeps both systems up-to-date, eliminating the need for manual data entry.

Account information can be provided automatically for your digital documentation, eliminating the need for account information to slow down the payment process.

Using AR collection management software, you can also download multiple customer reports and payment history with a button instead of including lengthy data collection sessions.

  • 2. AR software: accounts receivable management software installed to automate your account can also be useful in other areas. While it speeds up your workflow and affects cash flow, it can also be used at a managerial level.

Managers can monitor their teams by account to see if they work effectively and make changes.

Although most accounting programs have an element of automation, the accounts receivable automation process is usually sold as a separate product that offers advanced features. Integration of existing systems is also critical to the success of accounts receivable automation.

  • 3. Go out with the old one: Manual systems can hurt cash flow, business growth, achievement of business goals and overall revenue.

Automating the system for your account eliminates the hassle of billing, tracking and recording payments or tagging issues like Invoice and Inquiry Disputes, Stability. The system automatically collects data and, based on this data, can alert you of payment problems or trends in bad credit or unpaid payments.

Manual systems take a lot of time to manage, track signatures and signatures, and create documents and datasheets. Automated systems make everyday work easier and make systems fast, efficient, and easy to use.

  • 4. It’s the little things: Small changes lead to big improvements. With an automated accounts receivable system in place, you will usually encounter fewer problems:
    • Better workflow
    • Lack of human error: Machines rarely have computational errors that affect data
    • Better communication between employees and customers
    • Improved time management
    • Optimized system for better cash flow and liquidity
    • Fast data retrieval

Accounts Receivable Automation Software For A Faster Payment

With manual workflows, you will face delays and difficulties that slow down cash flow

  • Lost or Lost Documents
  • double job
  • Complicated manual process
  • Human error
  • Time-consuming administration
  • Standardize your procedures: An automated system means everyone is on the same accounting page. When all data sources are the same, they all work on the same basis; current information tends to be less confusing.
  • Employee Detention: Employee retention is an unexpected benefit of a simple and efficient business system.

Employees who constantly feel stressed and confused are less likely to stay with the company. In addition, those exposed to repetitive manual tasks such as manual data entry and invoices describing accounts receivable are detachable and prone to human error. In contrast, those who can automate monotonous tasks tend to be calm and have time to enjoy their work, so they tend to perform better and last longer.

Happy employees also lead to happier customers. If you enjoy communicating with someone, you will go the extra mile to give them what they need. Helpful and friendly customer service is very helpful.

Customers don’t have to go from department to department to find simple information with a simplified system. The direct and efficient approach results in better payouts and less delay.

Benefits of AR automation solutions

AR Automation helps you streamline your AR collection management software process, comply with local billing laws, and distribute all of your customer invoices electronically—regardless of your customers’ digital capabilities. You define rules according to the needs of each client, so you can automatically meet requirements and fully support digital workflows. The advantages at a glance

1. Simplify your workflow: Your AR team can focus on handling late payments or forecasting cash flow by reducing the time spent on each invoice and making the entire workflow more efficient. In other words, by freeing employees from the most tedious tasks, they can instead focus on ensuring business success.

2. Easy to meet legal requirements: More and more countries require customer invoicing using systems like Italy’s SDI. And because different countries have different requirements, things get complicated quickly – especially when you have customers in multiple markets.

In this case, several Account receivables automation solutions will help you comply with local laws. It gives you a common basis for all your global billing and allows you to accept payments in different markets.

3. Improve accuracy and customer service: If you increase the accuracy of your customer invoices, it builds trust. Companies that don’t submit the right documents are considered unprofessional and create extra work. With an AR automation solution, it doesn’t matter what format your customers prefer or how it’s developed digitally. They handle it the same way, even if they still want to receive documents on paper.

This is made possible by printing and postal services with automatic sorting and forwarding. Your finance team can focus on other valuable tasks instead of dividing the document into whether to send it as an email, paper invoice, or electronic invoice.

This time-saving feature looks after the individual needs of recipients when distributing invoices and makes it easier for recipients to switch from printed or electronic invoices to electronic invoices as their organization reaches greater digital maturity.

  • Paid Faster internal invoice processing
  • Reduce DSO
  • Paid Faster payment
  • Improved cash flow
  • Safer
  • Improved Accuracy
  • Better customer relations
  • Reduce distribution costs

What to look out for when choosing an Accounts Receivable Automation Software

What to look out for when choosing an Accounts Receivable Automation Software

Once you know the benefits, the next question maybe how to get started. The transition to digital processes doesn’t always come naturally to the average business owner, but many service providers offer advice on assessing what your business needs to automate the claims process. Talking to a service provider will also give you a closer look at your options, as not all providers are created equal.

So what should you look for when choosing an accounts receivable solution for your business?

  1. Choose an open platform: One of the main differences between the accounts receivables solutions is how open they are to other similar services. If you don’t know what solutions your current and future customers use, you should choose solutions compatible with other platforms.
  2. Make sure it supports the country you work in: Do you operate overseas, or are you planning to expand into new markets? Choose accounts receivable platforms present in the market as much as possible.
  3. Ensure it complies with local legal requirements: Many countries require that invoices be sent electronically and through a central or local platform. Make sure you can meet these requirements.
  4. Distribution in all formats: Most companies have switched to digital customer invoicing, but the point of Accounts Receivables automation is that you don’t have to care. Make sure your service can send invoices of any format, even on paper.
  5. Seamless integration: AR automation should integrate seamlessly with your ERP without adding a new interface.

What is the standard process for accounts receivable?

Accounts receivable process flow on the account. The standard process for accounts receivable is as follows:

  • Describe your lending practices and communicate them to your customers. Consider drafting and signing a contract/agreement outlining all the purchase terms if necessary.
  • The billing process follows. Invoices require the distribution of payment requests after delivering goods or services. This invoice can be digital or paper and usually includes details of the goods or services, due date, and possible penalties in case of delay.
  • Track all invoices and their related status. Mark invoices as completed when payment is received and send reminders for outstanding customer payments. A hands-on approach can play an important role in ensuring timely payments.
  • Record all AR and separate bad debts.

How can you do accounts receivable process automation on your account?

The most important benefit of debt automation is self-explanatory – increasing your working capital by ensuring timely payments. So, if you’re looking for ways to take advantage of account receivable process automation, here’s a roadmap to follow:

How can you do accounts receivable process automation on your account?

Involve your accounting team: Changing your accounts receivable solution process would be a massive overhaul. Therefore, you need to involve your accounting team at every step of this journey. Consult with them to get an overall picture of the AR processes, review existing processes, discuss common barriers and identify ways to overcome them, and receive team input during the decision-making process.

Write down the goals and requirements: The transformation to account receivable automation will be a slow process that will be implemented gradually. As a result, it is easy to get distracted by all the bells and whistles offered by the automation tools available in the market. Focus on the “musts” before flirting with the “good things.” To avoid extending this schedule further, set clear goals and requirements and stick to them in the first phase.

Choose an AR automation partner: Given that the market is jam-packed with AR automation software solution providers, picking one and picking one can be difficult. When making this choice, keep the following features in mind:

  • Choose an open-source accounts receivable platform that can be customized to meet your business needs.
  • Make sure your service provider has a solid reputation. Ideally, for a wider presence, they should have an international presence.
  • Make sure it meets local regulatory requirements.
  • Make sure it supports invoice distribution in all formats.
  • It should offer seamless integration with your existing digital infrastructure via plug-ins and APIs.

Identify leaders in AR automation: Appoint a team leader to oversee and review the AR automation software process. They will act as a single point of contact to inform stakeholders of all changes affected so far.

They are also responsible for managing the transformation, overseeing the implementation of the receivables automation software solution and reviewing their role in the workflow. Most importantly, they work closely with their decision-making partners to maintain a high level of communication, resolve any issues, and eliminate any confusion.

Start change

Before making any changes, perform a thorough test to ensure full operation. New technology must fit into existing workflows. At this stage, your accounting team will need to undergo training and adaptation to work in the new environment. Once both tasks are complete, your receivables automation software tools and the team will be ready to work from day one!


Account receivable automation ensures your business sends the correct invoices every time. This gives your customers confidence in your company and its AR processes, encouraging them to settle outstanding bills in record time. This double win in payouts and trust will go a long way in growing your business, whatever your field of activity. So use receivables automation software to accelerate your business growth!

In addition to distribution, intelligent business networks and billing accounts receivable platforms can automatically implement content enrichment and digital signatures to meet your customers’ needs or local tax authorities.