Accounts receivable (AR) is a sales ledger sub-account in accounting. It records the invoices that you have issued until they are paid. This is a short-term credit that you have extended to your customers.
Your invoice terms might offer customers 30 days, 60 days, or longer to pay. During this period, the value of each invoice needs to be recorded in the accounts. The AR journal is a sub-account of the sales ledger and as each invoice gets paid, it mores out of AR. Those invoices that are in AR at period close are recorded in the balance sheet as a current asset category.
Here is our list of the seven best accounts receivable automation software:
- BlackLine: The best accounts receivable automation software for orchestration. A SaaS platform that includes team management tools as well as data flow automation.
- SAP S/4HANA Cloud: The best accounts receivable automation software for large organizations. Large organizations need a substantial integrated ERP and accounting system and SAP is the world leader in this market. Runs on the cloud.
- Redwood Finance Automation: The best accounts receivable automation software all-rounder. An orchestration system that can thread together all of your operations and accounting software to transfer and transform data. This is a cloud-based service.
- Oracle NetSuite: The best accounts receivable automation software for medium-sized businesses. A cloud-based ERP that covers purchasing, payments, stock control, and invoicing and automatically transfers all of these activity records into the accounts.
- Sage Accounting: The best accounts receivable automation software for small enterprises. This online accounting package includes an invoicing system and it automates accounting as well.
- Invoice2Go: The best accounts receivable automation software for sole traders. This online system generates invoices and tracks payments. The system also includes client management features and forecasting tools.
- Zoho Books: The best accounts receivable automation software with integrations. This cloud package can integrate with payment systems, eCommerce platforms, CRM tools, and productivity utilities.
You can read more about each of our recommendations in the following sections.
Automating accounts receivable
Tracking AR values can be a difficult task if it isn’t automated. Invoices, when raised, go straight into AR and when they are paid, they move out. So, businesses that are very busy and also understaffed can’t afford to leave registering these amounts to a manual process. Transposition errors are common and people who get constantly interrupted by the phone or emails, might lose their place when cycling through a batch of invoices and leave some out.
Likely, you have already issued invoices digitally. Even if you have a busy site, you probably have an invoice printer for those buyers who aren’t paying on the spot. An eCommerce site will also automatically issue digital invoices.
If your digital invoices go into a directory, you just need a software package that can scan through those folders and extract the relevant data from them. An ERP is an even better idea. These systems require invoices to be compiled within the system and they will generate AR journal entries automatically. Theft will also move those invoices out of AR once they are recorded in the system as being paid.
The best accounts receivable automation software
Keeping AR constantly up-to-date with automation will enable you to get exact cash position projections for the near term. You will also be able to get exact turnover figures when analyzing marketing performance.
It is worth automating accounts receivables to get more accurate sales figures and speed up the closing. There are several routes that you could take to achieve the automation aim. One is to throw out your current systems and buy an ERP. This will have the added advantage of imposing working practices on all of your operations team. Another avenue is to buy an orchestration package that will knit together your existing software and automatically generate AR journal entries. We found some great packages for both of these options.
What do we look for in the best accounts receivable automation software?
When looking for the best accounts receivable automation software, we prioritized the following factors:
- SaaS systems – A cloud-based system is preferable because it can operate on transactions that take place on multiple sites – even small businesses might operate several branches. SaaS platforms remove the need to install software and retain technicians to maintain it.
- Full accounting systems – Specialized AR systems are rare because it makes more sense to get a package that can automate all of your accounting functions in a unified system.
- Cash Management – A service that can examine bank accounts, as well as unpaid invoices, creates a good basis for forecasting and planning.
- Security – This needs to be implemented both in protection from snoopers and hackers and also action tracking by employees, which requires the facility of individual user accounts.
1. BlackLine
The best accounts receivable automation software for orchestration
BlackLine is a cloud platform that coordinates third-party software to move data between them. A great extra feature of the BlackLine system is that it creates a team management environment as well.
The BlackLine system executes its processes to transfer and transform data between business processes and onto the accounts. This automates much of the work that data entry and accounting staff would otherwise have to perform. However, there is still a requirement for human involvement because transactions still need to be approved and some events require judgment to finalize. These incidences are why the BlackLine system has its team management tool.
The BlackLine system is also able to spot irregularities in the accounts and anomalies in the data. Some tasks can’t be performed by a computer and might need human contact with a customer. An example of this is when a customer disputes an invoice. If left to the computer, that invoice will be stuck in AR if the invoice is never paid. So, BlackLine raises a task with a team member to investigate why this invoice is overdue.
Similarly, if the numbers don’t add up, BlackLine will identify the transactions that are the source of the problem and inform a team member. This task list and team management feature become particularly important at closing when decisions can’t be put off any longer.
2. SAP S/4HANA Cloud
The best accounts receivable automation software for large organizations
SAP has the biggest market share in the ERP market. There are several different ERPs in the SAP stable and we recommend the cloud-based S/4HANA system.
Large organizations can’t get by with a few spreadsheets. Accounting for the different markets that conglomerates diversify through can get very complicated. Add in international operations and accounting can get messy if it isn’t properly organized.
SAP offers extensive AR functions linked to its invoice creation and management system. In true ERP style, this service ripples data through from operations to accounts, automating the creation of AR journal entries along with all the rest of your accounting records.
Organizations that use SAP S/4HANA include the US Army, Vodafone, and Toyota, which shows that this system works well for very large businesses.
3. Redwood Finance Automation
The best accounts receivable automation software all-rounder
Redwood can build batch scripts, which you define through a graphical layout that is similar to a process flow diagram. Each step in the diagram needs details that name an application and parameters. Once the diagram is complete, Redwood generates a script and then runs all of those applications in concert, flowing data from one software package to another, according to the flow diagram.
Redwood Finance Automation is a version of the Redwood Business Process Automation system that can interact with ERPs and accounting packages. It can manage the transfer of data into journals and then reconcile accounts back to transactions at closing. That reconciliation activity is an ongoing process that constantly moves transactions through the books.
The AR capabilities of Redwood include the automatic creation of an AR journal entry when an invoice is raised and the movement of that transaction out of AR when the invoice is paid.
The benefit of Redwood is that it doesn’t require you to replace your existing business process and accounting software packages. So, that means you don’t need to disturb current working practices or retrain staff.
BEST ACCOUNTS RECEIVABLE AUTOMATION SOFTWARE ALL-ROUNDER
Redwood Finance Automation is a solid pick because it works behind the scenes to unify all of the standalone systems that you currently use. You don’t need to disrupt your current working practices to get a centralized and automated accounting system.
4. Oracle NetSuite
The best accounts receivable automation software for medium-sized businesses
NetSuite is a cloud-based ERP that is organized into modules. This configuration suits the organization of companies into departments. However, behind the scenes, this system stores all transaction information in a central database and generates journal entries automatically.
The AR module is also a cash flow management system. You can see how much you are owed at any point in time because Oracle NetSuite is the main data entry system for invoice creation. So, as soon as an invoice is generated, it is in the AR journal.
Accounting tasks, such as tax calculation, are taken care of back at the transaction phase, through the interlinking of accounting functions into the business process modules of the package. The system also includes analysis features such as customer statements, aging, and forecasting.
5. Sage Accounting
The best accounts receivable automation software for small enterprises
Sage offers a range of packages from its cloud platform and Sage Accounting is their offering for small businesses. This tool includes two plan levels. The lower edition, called Starter just offers invoicing, bank reconciliation, and customer payments tracking. However, the main Sage Accounting plan gives you full accounting automation as well.
The Sage Accounting system is fronted by an invoice creator but then populates AR journals automatically. You also get bank reconciliation functions to let you know when invoices are paid and that will trip activity in AR cleanup as well.
The full package also manages purchase invoices, so you can get a complete view of your cash position and near-term forecasts. The Sage system is very suitable for small businesses because it is lightweight and doesn’t expect the user to know anything about accounting.
Another great feature of the Sage Accounting system is that, if you catch a promotion, the full plan works out cheaper than the Starter edition. You can try the system with a 30-day free trial.
6. Invoice2Go
The best accounts receivable automation software for sole traders
Strictly speaking, this tool is not an AR automation system. It is a business process support package that offers invoicing and payment tracking. Its AR support comes with its ability to send records to QuickBooks and Xero – so those external systems are the real AR systems behind this package.
Despite not including integrated accounting software, we had to put Invoice2Go on the list because it is a very useful package for sole traders, such as artisans or consultants who have to run a corporate structure while still trying to gain a good income freelancing.
This package includes an invoice generator, payment processing, bank account reconciliation, and payment tracking, a website builder, a messaging system for customer communications, automated timesheets, and an appointments scheduler. The whole system can be accessed through mobile apps, so someone who doesn’t have an office can run the entire business from a phone.
7. Zoho Books
The best accounts receivable automation software with integrations
Zoho Books is part of a library of tools offered by Zoho, which lets you create a self-assembly ERP system. The Zoho stable is also offered in packages that give you an out-of-the-box ERP package. As the name suggests, this is a bookkeeping tool and it pulls in transactions performed in other Zoho packages or third-party tools.
Once you set up your desired integrations, the Zoho Books system will automatically draw in all of the relevant data from invoicing and payment systems to assemble your AR journals and keep them constantly up to date.
The other systems that you can tie into oho Books include PayPal for payment processing and Uber for transport. Zoho offers a long list of business software, including a productivity suite, cloud storage, a CRM, and an HR system, and Zoho Books can integrate with all of them. The Zoho Books system can be linked to your bank account to provide automated bank reconciliation and AR flow through to GL.
You can get Zoho Books by itself or as part of the Zoho Finance Plus package, which includes invoicing, inventory management, subscription management, and expenses tracking. Zoho Finance Plus itself can be subscribed to as part of an even bigger package of business management tools, called Zoho One. All of Zoho’s business support products are available for a 30-day free trial.
