Accounts receivable (AR) software is a cornerstone tool in your financial operations in any business. Without a good solution place, your business could face delayed payments, increased errors, and inefficient cash flow management. That’s why choosing the right software is a must.
But in a crowded market with numerous options, finding a solution that perfectly fits your needs can be challenging.
The ideal AR software should streamline your workflows, improve cash flow, and enhance overall productivity.
In this guide, we’ll walk you through essential criteria to consider when evaluating AR software, ensuring you make an informed decision that supports your business’s growth and operational efficiency. From user interface to customer support, we’ve got you covered.
TL;DR
- Accounts receivable software is a tool designed to automate and streamline the accounts receivable processes within a business.
- It’s best to choose an AR software that integrates seamlessly with your accounting software enabling a smooth flow of data between systems.
- Some of the key features to look for include automatic invoice generation, automated payment reminders, online payment processing, and AR reporting.
What is Accounts Receivable Software?
Accounts receivable software is a tool designed to automate and streamline the accounts receivable processes within a business. This includes tasks such as invoicing, payment collection, processing transactions, and maintaining accurate records.
Businesses use AR software to improve the efficiency and accuracy of their financial operations, reduce manual errors, and enhance cash flow management
While specific capabilities can vary from one solution to another, most accounts receivable apps offer features like automatic invoice generation, payment reminders, multiple payment options, and integration with other financial systems, making them a valuable asset for managing receivables effectively.
How to Find the Best AR Softwarre: Criteria for Selecting the Best Accounts Receivable Solution
With so many AR software solutions in the market, choosing a suitable one for your needs could get overwhelming. Yet, your choice could make the difference between chaotic bookkeeping and seamless cash flow.
Here are some factors for you to consider when selecting AR software for your business:
User interface and ease of use
Usability is one of the most crucial factors of good AR software. An intuitive user interface will make it easier for both your employees and clients to use the software whether on the web or mobile app.
A complex user interface makes the learning curve steep. You don’t want to suffer slow user adoption, usability issues, and loss of value just because your clients can’t find the navigation easily.
Investing in user-friendly software that’s easy to use will maximize user efficiency and boost productivity for your team.
You can ask for a demo before investing in the software to gauge its usability and ease of use. Test different aspects of the solution, such as invoice creation, report customization, payment reminders, and payment verification.
Features and functionality
The software solution you choose should offer features and functionalities that suit your specific business needs. On top of automating your AR processes, the software should also provide various customization opinions.
Here are some key features to look for in AR software:
- Automatic generation of invoices and auto payment reminders via email and SMS
- Multiple payment options, such as debit cards, ACH, checks, credit cards, and more
- 24/7 accessibility
- Bank reconciliation
- Custom reports and analytics
- Third-party app integration
- Invoice dispute management
- Security and compliance
Software with a comprehensive list of features will contribute to a more efficient AR workflow.
Integration capabilities
An AR software that integrates seamlessly with your accounting software enables a smooth flow of data between systems. This removes the risk of errors and time consumption that come with manual processes or switching through multiple systems.
Some key systems to ensure that your AR software integrates with include banking systems, ERP and CRM software, and business intelligence tools.
If the integration isn’t smooth, the benefits of AR software will be watered down by the complexity and inefficiency of incompatible systems.
Pricing and scalability
While looking for an ideal AR software to bridge the gaps in your accounts receivable processes, you also want one that you can afford. Transparency when it comes to pricing should be a non-negotiable.
Compare the pricing against the features and offerings to determine the return on investment (ROI). Don’t forget to ask about any extra charges, such as setup fees, transaction costs, fees for upgrades and support, and fees for extra users.
Add up all the short-term and long-term costs to ensure you get a full picture of what you’re getting into.
Also, since you want to invest in software that will serve you in the long term, understand the scalability of the software as your business needs grow.
For example, can the software accommodate a 10% increase in the number of customers or invoices? What about a 50% increase in the average rate of return? If so, will you have to move to a higher-priced plan?
Customer support and training
Your relationship with the software company or vendor shouldn’t end after purchase. They should have measures to ensure you succeed in the short and long term.
An AR software company with a robust customer support and training team helps you resolve any issues that may arise during software implementation and usage.
Evaluate the channels the company uses for customer support. At the bare minimum, they should offer live chat, email, and phone support. Consider how long their customer support team takes to respond, whether they’re available 24/7, and the level of expertise they demonstrate.
Go through online reviews to evaluate the company’s reputation when it comes to customer support and response times.
Bringing It All Together
Deciding on what AR software to use is not something to take likely. Be sure to weigh factors like user interface, features, integration capabilities, pricing, scalability, and customer support. In doing so, you can find a solution that meets your needs and helps your business grow.
Take your time choosing a solution and invest in a tool that enhances efficiency, reduces errors, and supports seamless cash flow management for long-term success.
Request a QuoteFAQs About Accounts Receivable Software
Q: What is accounts receivable software?
Accounts receivable software is a tool that streamlines the accounts receivable workflows by automating time-consuming processes such as invoicing, payment collection, processing, and balancing records.
Q: How does accounts receivable software help businesses?
Businesses that use AR software enjoy streamlined operations, enhanced accuracy, increased efficiency, and time savings. The software also removes any bottlenecks in the AR process, such as consistently high Days Sales Outstanding (DSO).
Q: What features should I look for in accounts receivable software?
You should look for AR software with automatic invoice generation, automated payment reminders, online payment processing, multiple payment options, bank syncing, reports & analytics, and security and compliance.
Q: How much does accounts receivable software typically cost?
Entry-level AR software solutions start from as low as $3.75 to $45 per month. Enterprise-level software with advanced features can cost up to $500 per month. Pricing typically depends on features, the number of users and customers, and the number of transactions.
Q: How do I choose the right accounts receivable software for my business?
You can choose the right AR software by considering the user interface, features, functionality, integration capabilities, pricing, scalability, and customer support.
Q: What are the common challenges in implementing accounts receivable software?
Common challenges experienced companies face when implementing AR software include slow adoption, usability issues, lack of customer support, inefficient data management, invoicing and billing errors, and inadequate analytics.
Q: How can I ensure a smooth transition to accounts receivable software?
The best way to ensure a smooth transition to AR software is by asking for a demo or trial period to get a first-hand experience of the software’s features, functionalities, and capabilities. Receiving adequate customer support and training from the provider or vendor also provides a seamless transition.
Q: What are the security considerations when using accounts receivable software?
Ensure that the AR software complies with security standards like the International Organization for Standardization (ISO), General Data Protection Regulation (GDPR), System and Organization Controls (SOC) reporting, and Payment Card Industry Data Security Standard (PCI DSS).
Also look for encryption protocols, user account access, and multi-tenant security measures.
Q: Can accounts receivable software integrate with other business systems?
Yes. Integrating your AR software with other business systems, such as CRM and ERP software, helps you automate all your business processes, share data across systems, and get all the functionalities you need in one place.
