Accounts receivable software features (2025)

Managing incoming payments efficiently is essential for healthy cash flow. Accounts receivable (AR) software offers a range of features designed to streamline invoicing, track outstanding debts, and automate follow-ups.

From real-time reporting to payment reminders, these tools help UK businesses stay organised and reduce manual tasks. In this guide, we'll explore key accounts receivable software features and how they support smoother financial operations.

AR software is necessary for nearly every growing business, but it's important to consider the costs associated with using these systems. Different vendors may charge for these services in different currencies, which can add up over time.

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What is accounts receivable software?

Accounts receivable software is designed to help organisations automate and streamline a variety of tasks related to managing funds owed by their clients.¹ In addition to enhancing cash flow management, it also provides businesses with valuable insights into customer payment behaviour.

Growing businesses benefit greatly from AR automation. Not only does it improve accuracy and cut down on time spent on repetitive operations, but it also enables a smaller workforce to grow and take on more strategic duties. Automated AR software, supported by AI and machine learning, may free up accounting staff members from numerous repetitive tasks so they can concentrate on what really matters: growing the business.²

Whether the goal is to cut the time between invoicing and payment, relieve staff workloads, or deter new hires, AR software increases productivity, lowers expenses, and results in satisfied workers, vendors, and clients.

Why choosing the right features matters

A strong accounts receivable program is essential for expanding companies to maintain accurate and well-organised financial and accounting records. Without it, your business can suffer from errors and have trouble collecting receivables on schedule or at all. You might not have enough money to pay for running costs and daily operations if this occurs.¹

Still, with so many options available, finding a suitable solution for your business may prove to be difficult. It's important to consider your business needs and what exactly you expect from AR automation.

Essential features of accounts receivable software

Accounts receivable (AR) software in the UK needs to provide robust invoicing and collection tools. Implementing software with the following capabilities helps streamline cash flow management and avoids regulatory pitfalls.

Automated invoicing (with recurring billing)

The software should allow businesses to generate professional invoices automatically, using templates with company branding. This includes scheduling recurring invoices for repeat billing cycles so regular charges are sent out with minimal manual effort.³

Multi-currency support (including GBP)

The software should enable issuing invoices and accepting payments in various currencies, with automatic conversion using up-to-date exchange rates.⁴ This capability simplifies accounting for international sales and keeps both foreign currency and GBP records in balance, which is vital for UK companies dealing overseas.

Payment reminders and collection automation

To improve cash flow, AR software should automatically send out payment reminders for upcoming due dates and overdue invoices. Businesses can customise these reminders at appropriate intervals (e.g. 7, 15, or 30 days after an invoice) to gently prompt customers and reduce late payments.³ This helps maintain timely collections without the team manually tracking every overdue account.

Integration with accounting systems and CRM/ERP

Seamless integration is essential so that invoice and payment data flows directly into the company's accounting software or ERP system. A good AR solution will connect with general ledger and financial modules (e.g. Sage, Xero, QuickBooks) as well as CRM tools, ensuring consistency of data across platforms.³ This avoids duplicate data entry and updates the books automatically when invoices are issued or paid, saving time and reducing errors.

Reporting and analytics tools

Built-in reporting features allow businesses to monitor receivables and customer payment trends in real time. The software should provide dashboards and reports such as accounts receivable ageing schedules, cash flow projections from receivables, and key metrics like average collection period.³

Customisable analytics help general business users across industries gain insights into which customers are slow payers and overall AR performance, enabling better decision-making.

Real-time payment tracking and reconciliation

The system should offer real-time visibility into which invoices have been paid and which are outstanding. This often involves linking with bank feeds so incoming payments are automatically matched to the correct invoices.³ Real-time payment tracking minimises manual checking and ensures no payment is overlooked.

Customer credit management (limits and dunning)

Effective AR software aids in credit control by allowing businesses to set credit limits for customers and flag or block new sales if a customer exceeds their limit. It can automatically generate overdue account notices (dunning letters) for past-due invoices, with standardised or custom messages and late fees as needed.⁴ These features help companies proactively manage credit risk and follow up on late payments in a systematic manner.

Multiple payment options & gateway integration

To encourage faster payments, AR platforms should integrate with payment gateways and support various payment methods commonly used in the UK. This means offering customers convenient options like bank transfers, credit/debit cards, or direct debit and capturing those payments within the AR system. Software with multi-method payment support and real-time payment status updates improves the customer experience and speeds up collections.⁵

How to evaluate accounts receivable software features

After you've decided which AR software features are best for your company, you need to thoroughly consider each provider. Take into account whether the SaaS AR provider has experience with your sector, product, service, and company size.

Additionally, you want to find out if an automation software provider is aware of any laws that could affect your firm. Above all, think about the resources you and your team might have access to, as well as the degree of local and regional support you might receive.¹

VAT calculation and management

UK businesses need AR software that handles Value Added Tax seamlessly. The system should automatically apply the correct VAT rates to invoices and clearly show VAT amounts. It must support multiple VAT codes and calculate VAT on each line item where applicable.⁶ Additionally, the software should generate VAT summary reports and support the preparation of VAT Returns, making it easier to file accurate VAT reports to HMRC.

HMRC-compliant invoicing

Every invoice must meet UK legal requirements in format and content. The AR software should ensure each invoice includes all mandatory details – such as a unique invoice number, your business name and address, the customer's name and address, invoice date, supply (delivery) date, description of goods/services, amounts excluding VAT, VAT amount, and the total including VAT. For VAT-registered businesses, the invoice must also show your VAT registration number and VAT rate for each item.⁷

Making Tax Digital (MTD) compatibility

AR software in the UK should be compatible with HMRC's Making Tax Digital initiative, particularly for VAT. This means the software can keep the required digital records and directly submit VAT returns to HM Revenue & Customs via an approved API connection. MTD compatibility ensures your AR and accounting process remains compliant with the latest digital tax regulations.⁷

UK GDPR data protection compliance

Handling customer financial data means AR software must adhere to UK GDPR standards for privacy and security. Key features include strong data encryption (both in transit and at rest) and access controls to protect personal identifiable information on customers. The software should allow only authorised staff to view or process sensitive customer data and provide audit trails of who accessed or changed records.⁸

Best practices for implementing accounts receivable software

A good system is only as good as its implementation. Here's what you need to do to successfully implement AR software into your business operations:⁹

1. Choose the right software – When evaluating cloud-based accounts receivable solutions, businesses should prioritise tools that align with their specific operational requirements. It's equally important to assess the vendor's customer support quality and overall pricing model.
2. System setup – Once a solution has been selected, the next step is configuring the system according to the vendor's guidelines. This typically involves setting up internal processes like billing and customer accounts and integrating the platform with existing systems, such as accounting software.
3. Train staff – Employees must be properly trained to use the software effectively. This includes understanding how the system functions and how to navigate its features. Organisations should also ensure that staff have access to necessary tools, such as customer service platforms, to manage accounts smoothly and professionally.
4. Monitor system performance – After implementation, businesses should continually monitor the system's performance to verify that everything is functioning as expected. This involves keeping track of customer payments and other key data points, as well as remaining up to date with any industry regulations that could impact day-to-day operations.

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FAQs - Accounts Receivable Software Features

Here are some of the most common questions answered:

What core automation features should I look for?

Look for automated invoice generation, scheduled payment reminders, late-payment follow-ups, and auto-reconciliation of payments. These help reduce manual errors, speed up collections, and free staff for high-value tasks.

Which payment processing options are essential?

Modern AR software should support multiple digital payment methods, such as credit cards, ACH, and eChecks, and offer a unified payment portal for partial/bulk payments.¹⁰

How important is integration with existing systems?

Seamless integration with ERP, CRM, or accounting platforms ensures real‑time data sync, avoids manual entry errors, and creates a consistent financial ecosystem.¹⁰

What kind of reporting and analytics should be included?

The software should offer robust dashboards and reports, such as DSO, ageing, and cash‑flow forecasts, in order to give clarity on outstanding invoices and AR health.⁹

Why is customisability vital?

Customisable invoice templates, workflows and fields allow the software to reflect your brand, credit policies, and operational style.¹⁰

How should pricing and scalability factor in?

Look for clear, transparent pricing, whether SaaS subscription or licence-based, and a platform that can grow with your volume of invoices and customer base.¹⁰

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Sources used in this article:

1. https://www.billtrust.com/resources/blog/what-is-accounts-receivable-automation-software
2. https://www.netsuite.com/portal/resource/articles/accounting/ap-ar-automation.shtml
3. https://stripe.com/gb/resources/more/accounts-receivable-automation-101-what-it-is-and-the-problem-it-solves-for-businesses
4. https://www.acumatica.com/cloud-erp-software/financial-management/accounts-receivable/
5. https://envoice.eu/en/blog/accounts-receivable-software/
6. https://stripe.com/en-pt/resources/more/hmrc-invoices-explained-what-businesses-need-to-know
7. https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat
8. https://www.highradius.com/resources/Blog/gdpr-compliance-in-accounts-receivables/
9. https://www.corcentric.com/a-comprehensive-guide-to-cloud-based-accounts-receivable-software/
10. https://www.billtrust.com/resources/blog/10-questions-when-choosing-accounts-receivable-software-for-digital-payments

Sources last checked on date: 30-Jun-2025