Accounts Receivable Automation
Technology that automates invoicing, payment collection, and cash application processes.
What is Accounts Receivable Automation?
Accounts receivable (AR) automation uses software to streamline the entire invoice-to-cash cycle: generating and sending invoices, enabling customer self-service payment, matching payments to invoices, and updating accounting systems. Modern AR automation integrates with ERP and accounting systems, supports multiple payment methods, sends automated reminders, and provides real-time visibility into outstanding receivables and cash position.
Why It Matters
Manual AR processes are slow, error-prone, and expensive. Staff spend hours entering data, chasing payments, and reconciling. AR automation reduces DSO (Days Sales Outstanding), eliminates data entry errors, improves customer experience, and frees staff for higher-value work. For many businesses, AR automation reduces collection costs by 50% or more.
Related Terms
Payment Reconciliation
The process of matching payment transactions with deposits and accounting records.
Embedded Payments
Payment processing integrated directly into software platforms and business applications.
ACH Payment
An electronic bank-to-bank transfer through the Automated Clearing House network.
Recurring Billing
Automatically charging customers on a scheduled basis for subscriptions or ongoing services.
Frequently Asked Questions
Invoice generation and delivery, payment reminders, customer payment portals, cash application (matching payments to invoices), and updating ERP/accounting systems.
Faster invoice delivery, easier payment options, and automated reminders all accelerate collection. Customers pay faster when payment is convenient.
Most AR automation tools integrate with major ERP and accounting systems like QuickBooks, NetSuite, Sage, and Microsoft Dynamics.
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