The best accounts receivable software for a small business is the one that keeps the account truthfully and reads three figures from it without help: what is outstanding, what share is overdue and for how long, and how many days the money takes to come in. That is the whole product. The category is sold with far more, collections workflows for enterprise credit teams, automated solutions that promise to chase customers for you, platforms priced for a thousand accounts. This page is about what accounts receivable management software has to hold for a business with a few dozen customers, how to read the three figures, and how to tell account receivables solutions built for that business from ones built for a finance department.
The record every accounts receivable application keeps: customers, invoices, payments, balances
Accounts receivable systems all keep the same four things, and the difference between them is whether a payment is applied against a named invoice or dropped on the account as a lump. Applied payments give a true aging; lump payments give a balance that is right and an overdue figure that is wrong. Ask any accounts receivable application to show one customer's open invoices after a part payment, and buy the one that can.
The three figures, and how the tracker reads them
Outstanding is the sum of open invoices. The overdue share is the part past its due date, by age band. Days sales outstanding is the receivable balance divided by credit sales over the period, times the days in the period, and it is the figure that tells the seller whether terms are being kept. The free invoice tracker on this site reads all three from the seller's own invoices and payments; accounts receivable software keeps the record those figures come from.
Accounts receivable collections software, against what a small seller needs
Accounts receivable collections software built for a credit team assigns accounts to collectors, scores risk and manages promises to pay. A small seller needs the reminder schedule and the statement, which is dunning, and the decision about what to do at thirty days, which is theirs. Accounts receivable automated solutions that go further than the reminder are automating a judgement the small seller should keep.
The accounts receivable technology worth having: the customer's view
The useful part of the newer accounts receivable technology is the shared view: the customer sees the same statement and open invoices the seller does, and pays from it. That removes the dispute about which invoice was paid and cuts the days to collect more than any chaser. The paid record on this site gives the customer that statement and the way to pay from it, and keeps one price for the account rather than per seat.
Questions people ask about best accounts receivable software
What should account receivables solutions do for a small business?
Keep customers, invoices, payments applied to named invoices and balances; produce the statement and the reminder; and read outstanding, overdue and days sales outstanding from the record. Export for the accountant.
How is days sales outstanding calculated?
Receivable balance divided by credit sales in the period, times the days in the period. The free tracker on this site works it from your own figures.
Do I need accounts receivable automated solutions built for credit teams?
A small seller needs dunning, the scheduled reminders, and a decision at the end of the schedule. Collections software built for credit teams is a different product for a different size of business.
What is collaborative accounts receivable?
The customer and the seller looking at the same statement and open invoices, with the customer paying from it, so the record is shared rather than reconciled.