If managing invoices and chasing unpaid bills is eating up too much of your time, you're not alone. Many small and mid-sized businesses find that handling accounts receivable (AR) manually is tedious and inefficient.
An MSTS survey showed that 75% of full-time AR staff spend around 18 hours a week on collections tasks. The result of these manual processes? Frequent late payments and cash flow gaps. Over half of B2B invoices in the US end up paid late, underscoring how challenging receivables can be without the right tools. This is why more businesses are turning to accounts receivable automation software to streamline their invoicing and payment collection. But with so many automated accounts receivable software options on the market, how do you decide which is best for your business?
In this guide, we’ll walk through the key considerations on how to automate accounts receivable processes effectively by choosing the right AR automation solution.
Why Automate Your Accounts Receivable?
Automating your accounts receivable can be a game-changer for your business. Traditional AR workflows (e.g., manually inputting invoice data, emailing reminders, and posting payments into QuickBooks) are time-consuming and prone to human error. AR automation software takes over these repetitive tasks, which leads to several practical benefits:
- Faster Payments and Improved Cash Flow: Automation tools send out invoices and payment reminders promptly, encouraging customers to pay on time. Many businesses see their average payment times drop when reminders and easy online payment options are in place, leading to healthier cash flow.
- Time Savings for Your Team: By offloading manual data entry and follow-ups, your accounting or AR team can reclaim hours each week. This freed-up time can be spent on higher-value activities like financial analysis, customer service, or strategic planning instead of stuffing envelopes or reconciling records line by line.
- Fewer Errors and Disputes: Automated systems reduce mistakes that often happen with manual processes, such as misapplied payments or incorrect invoice amounts. Fewer errors mean fewer customer disputes and a more accurate AR ledger.
- Better Visibility and Control: The best AR automation software provides real-time dashboards and reports so you always know the status of your receivables. This visibility helps you spot issues early and make informed decisions to keep your finances on track.
Automating AR isn’t just about doing less work — it’s about getting paid faster and more reliably, with fewer headaches.
Key Features to Look for in AR Automation Software
Not every accounts receivable automation software is created equal. As you evaluate options, make sure the solution offers the features and capabilities that will truly solve your AR pain points.
Below are some crucial features and factors to look for when choosing the best software.
Seamless QuickBooks Integration
For small and mid-sized businesses that rely on QuickBooks, integration is a must. The software should sync with QuickBooks (or any other accounting system you use) to eliminate double data entry. For example, when an invoice is created or paid, those updates should flow between the AR system and QuickBooks automatically.
Automated Invoicing and Billing
The platform should allow you to automate invoice generation and delivery. This includes creating invoices (one-off or recurring) using your customer data, sending them via email or customer portal on schedule, and even scheduling recurring invoices for subscription or repeat customers. Look for features like batch invoice processing and templates that save time and maintain consistency.
Online Payment Processing & Customer Portal
Top AR automation tools include built-in payment processing or integrate with payment gateways. This lets your customers pay invoices online via credit card, ACH, eCheck, etc., directly from an embedded link or customer payment portal. A self-service portal improves the customer experience by making it simple for customers to view their account, pay balances, or set up autopay — all of which help you get paid faster.
Automated Reminders and Collections
Chasing late payments is labor-intensive. Good AR software will automatically send payment reminders before and after invoices are due. You should be able to configure reminder schedules — like a friendly heads-up a week before the due date, another one on it, and a past-due notice a week after. Some platforms also escalate collection efforts, like flagging accounts for follow-up calls or offering payment plans, helping reduce delinquent invoices without constant manual intervention.
Cash Reconciliation and Reporting
A critical feature is matching incoming payments to the correct invoices and updating your records. The best software will auto-reconcile payments and even handle partial payments or credit memos accurately. This ties back into your accounting system so that invoices are marked paid and you can easily see which payments are still outstanding. Additionally, robust reporting tools are important to track performance.
Ease of Use and Support
As a small or mid-sized business, you need a solution that your team can adopt quickly without a steep learning curve. Look for an intuitive interface and plain-language workflows — you shouldn’t need an IT expert to use it! Also consider the vendor’s customer support and training resources. Helpful onboarding, tutorials, and responsive support can make a big difference, especially if you don’t have an in-house technical team.
Scalability and Security
Choose a platform that can grow with you. If you plan to expand your operations or customer base, the software should handle higher invoice volumes and more users down the line. Also, since AR involves sensitive financial data, ensure the software follows best security practices to protect your and your customers’ information.
By focusing on these key features, you can filter out solutions that won’t meet your needs. Next, let’s look at the process of evaluating and selecting the right one from your shortlist.
How to Choose the Right AR Automation Software
Once you know what to look for, how do you actually choose the best fit? Here are some practical steps to guide your decision-making process:
1. Assess Your AR Process and Pain Points
Start with an internal review. Map out your current AR workflow — from invoicing to collections and reconciliation — and note where the bottlenecks or most time-consuming tasks are. Are invoices going out late? Are you spending too much time matching payments or following up on past-due bills? Identify the specific problems you need the software to solve. This will clarify your must-have requirements.
2. Research and Shortlist Solutions
With your needs in mind, research available AR automation software platforms. Look for those that check the boxes on your required features. Read reviews or case studies to gauge reliability and results. Make sure any solution on your shortlist can integrate with your existing tools (e.g. QuickBooks, CRM systems, etc.) and supports your industry’s payment types or compliance needs. At this stage, you might narrow down to a few options that appear to fit well.
3. Take Advantage of Demos or Trials
Most reputable software providers will offer a free trial or a live demo. Schedule demos with your top vendors or sign up for a trial account to get hands-on experience. Involve your accounting or AR team members who will use the software daily.
During the demo or trial, pay attention to ease of use: Can you navigate the dashboard easily? How simple is it to create an invoice or connect to your existing tools? Prepare a few real-world scenarios and see how the system handles them. Don’t hesitate to ask the vendor questions about how the software would handle your specific AR scenarios (e.g. “How does it handle partial payments or customer overpayments?”).
4. Compare Pricing and ROI
As a small or mid-sized business, budget is important. Compare the pricing models of your finalists — some may charge per invoice, per user, or a flat monthly fee. While cost matters, remember to evaluate it in light of the time and money you’ll save by automating. The best AR automation software should pay for itself through efficiency gains and improved cash collection. Choose a solution that fits your budget while delivering strong value.
5. Look for a Trustworthy Partner
Finally, consider the vendor’s reputation and support. AR automation isn’t just a one-time purchase — it’s more like partnering with a provider for a long-term solution. Research the vendor’s track record: How is their customer support? Do they have clients in your industry? Are they updating the software regularly with new features or improvements? A company that provides excellent ongoing support, training resources, and listens to feedback will help ensure your AR automation initiative succeeds.
By following these steps — understanding your needs, doing thorough research, testing the software, and weighing the cost-benefit — you’ll be well on your way to choosing the best AR automation software for your business.
Streamline AR and Get Paid Faster
Selecting the right accounts receivable automation software can transform how quickly and efficiently your business gets paid. The ideal solution will fit your workflows, integrate with tools like QuickBooks, and take the busywork out of invoicing and collections. Instead of chasing payments and reconciling books manually, you could have an automated system that handles it for you — saving time, reducing errors, and improving cash flow.
Fortunately, Chargezoom helps automate AR for QuickBooks users and many more. Chargezoom’s platform is designed to handle everything from invoice automation to online payments and reconciliation.
Sign up and make manually slogging through accounts receivable a thing of the past!
