Complete guide to collaborative accounts receivable software

Collaborative accounts receivable (AR) software fills a gap that traditional automation doesn’t. While automation can streamline repetitive AR tasks, it often falls short when it comes to communication across teams. Yet, in many businesses, accounts receivable involves more than just finance - it includes sales, account managers, and customer support as well.

That’s where collaborative AR tools make a difference. They bring all the teams involved in collections together on a shared platform, making it easier for teams to work together. This tool can significantly reduce invoice disputes, make teams more efficient and improve customer experience.

In this guide, we’ll explore the key features and benefits of collaborative AR software for small businesses and self-employed people in the UK, as well as how to integrate it successfully into your processes.

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What is collaborative accounts receivable software?

Collaborative accounts receivable software is a tool that allows different teams to work together on the collections process - from tracking invoices to following up on payments and resolving disputes.

Getting paid on time sometimes requires help from sales, who know the client best, or customer service, who may be handling an ongoing issue. Collaborative accounts receivable software allows all these teams to work together in one place, reducing errors such as double follow-ups, missed updates, or unclear responsibilities.

For example, if a customer hasn’t paid because they’re waiting on a revised contract, the sales team can leave a note directly in the AR platform. The finance team will see it instantly and avoid sending a reminder until the issue has been resolved. This saves time and improves the customer’s experience.

While collaborative accounts receivable software also automates AR tasks such as delivering invoices, sending collections reminders, and cash application, it’s different from traditional AR automation in that it encourages communication and collaboration across teams.

Key features of collaborative accounts receivable software

Let’s take a look at the key features:

Shared customer timelines and centralised communication

When you use collaborative accounts receivable software, everyone, including finance, sales, and support team members, will be able to see all customer interactions from one place. This includes all emails, notes, invoice updates and payment history. There’s no need to constantly bug employees for updates or reach out to customers when another colleague has already done so.

Task assignment and internal notes

Collaborative accounts receivable software eliminates the need for back-and-forth emails, which can often be confusing and difficult to follow. This software lets you collaborate with other teams within the platform. You can easily access tasks, leave notes and tag your colleagues.

Automated reminders and workflows

Like traditional AR automation tools, collaborative AR software can also send reminders and follow-ups. But unlike those traditional tools, they let you personalise reminders and responses based on your team’s preferences or customer history.

Centralised dashboards

These software tools provide dashboards to help you track overdue invoices, task progress, and who is handling what. You can monitor metrics such as Total Outstanding Receivables and Days Sales Outstanding (DSO), as well as view customer-specific metrics and AI predictions for incoming payments.

Customer portals

Some collaborative software tools offer self-service pages that allow customers to log in, view their outstanding and paid invoices, ask questions, raise disputes, and track their payment status in real-time. This improves transparency with customers and reduces the amount of queries or disputes customers raise with support.

Multi-user access and permissions

Since these tools encourage collaboration, they support multi-user access across all departments. You can set custom permission levels to determine which team members should have access to specific information, especially sensitive financial data.

Integrations with accounting and CRM tools

Collaborative AI software integrates seamlessly with tools like Xero, QuickBooks, NetSuite, and Salesforce, so updates sync across your finance and sales systems.

Benefits of using collaborative accounts receivable software

Here are some of the main benefits:

Improved team efficiency

Collaborative accounts receivable software closes the communication gap by allowing teams to leave notes, tag colleagues, and assign tasks on the same platform. This makes teams more efficient in invoicing, sending reminders and resolving disputes.

Faster collections

Collaborative AR software leads to faster collections by eliminating communication delays among team members, providing real-time updates and sending personalised follow-ups to customers.

Reduced invoice disputes

Invoice disputes are one of the most common challenges in AR. Collaborative AR software tools significantly reduce invoice disputes by automating manual tasks, streamlining communication across teams, and communicating with customers.

Accelerated cash flow

When used appropriately, collaborative accounts receivable AR features like automated reminders and workflows, centralised communication and shared customer timelines naturally lead to improved cash flow management.

Better customer relations

Collaborative AR tools make all customer communications and payment history available across teams. This helps resolve disputes more quickly, leading to a better customer experience. Additionally, these tools help build transparency and trust by providing customer portals where customers can view their payment history, track payments, and easily raise disputes.

Scalability

As your business grows, collaborative AR software helps you manage more accounts receivable tasks, such as invoicing and payment reconciliation, without the need to hire additional staff. By automating and streamlining these processes, it helps reduce operational costs over time.

How to choose the right collaborative accounts receivable software

To choose the right collaborative accounts receivable software, you need to identify your team's needs and look out for tools that have the features to meet those needs.

• Understand your needs and define your goals: To know the right tool, you must first understand what you need. Consider your current AR processes and identify gaps, specific pain points and areas that need improvement. These areas for improvement then become your goals.
• Look out for collaboration features: The most significant benefit of collaborative accounts receivable software is that it allows different teams to work together efficiently. Look out for features that aid communication and collaboration, such as shared customer timelines, internal notes, task assignments, centralised communication, and multi-user access with defined roles and permissions.
• Check for smart automation: Smart automation helps reduce manual tasks, minimise errors, and improve the customer experience, ultimately leading to faster collections and a healthier cash flow. Look for software tools with automation features, such as payment reminders, invoice tracking, follow-up scheduling, and real-time updates.
• Ensure it’s secure: Look for collaborative AR software tools that allow you to protect valuable customer data, especially when handling high-value or confidential accounts and working in industries with regulatory or audit requirements.
• Check reporting and dashboards: Finance dashboards help you stay updated and provide a bird’s-eye view of key AR metrics. This helps you to notice changes and respond swiftly. You’ll want dashboards that show overdue invoices, collection performance, team activity, and cash flow forecasts.
• See if it has customer self-service: A good collaborative AR software should also be accessible to customers. Look for tools that offer a secure self-service portal, allowing customers to view and download invoices, make online payments, track payment status, submit disputes, and leave messages. This not only reduces back-and-forth with your team but also provides customers with a smoother and more transparent payment experience.
• Check if it's easy to use and cost-friendly: Prioritise tools that are easy to use and adaptable for even non-finance members. Look for tools with intuitive interfaces that offer onboarding, documentation, or support. Also, compare costs to see which one is more cost-friendly. Or provides the most features for a minimal amount or if the pricing model works for you.
• Free trial and feedback: Starting with a free or discounted trial will help you test the tool and decide if it's a good fit for the different teams. After the trial, you can collect feedback from finance, AR, sales and support teams to make an informed decision.
• Assess Integrations: Accounts receivable are part of a broader financial process. The collaborative accounts receivable software you choose should integrate smoothly with your accounting software (e.g. Xero, QuickBooks, NetSuite), CRM tools (e.g. Salesforce, HubSpot) and your customer’s preferred payment methods.

Best practices for implementing collaborative accounts receivable software

Here are some best practices you can follow to get the most out of collaborative accounts receivable software:

• Set clear goals upfront: Define what you want to achieve with the software. It could be to reduce Days Sales Outstanding (DSO), improve cross-team visibility, or automate reminders. Having clear goals helps you stay focused and know what to look out for when measuring success.
• Map out your current AR workflow: Document how you and your team currently handle AR processes - who sends reminders, who handles disputes, and what tools are being used. This will help you identify gaps and problem areas and act as a frame of reference later to identify any improvements.
• Get cross-functional buy-in: Remember that collaborative accounts receivable software is designed for multiple teams to use. Involve finance, sales, and customer service early in the process. Explain how the tool will help each of them, how it could reduce manual tracking for finance, provide better context for sales, and lower customer issues for support.
• Choose the right tool for your needs: Choose a tool that’s easy for both finance and non-finance teams to use. Verify that it integrates seamlessly with your accounting and CRM systems, supports multi-user access with permission controls, and provides dashboards, automation, and customer portals.
• Clean and organise your data: Before migrating to collaborative accounts receivable software, clean up customer information, invoice records, and contact details. The tool is only as helpful as the data you give it.
• Provide training and documentation: Provide hands-on onboarding sessions for all team members. Show how to log activities, tag teammates, send comms, or check timelines. You can also create internal guides for quick reference. This will ensure that teams can use the tools efficiently and avoid any hiccups.
• Start with a pilot phase: Before going full throttle, test the collaborative AI software with a small group of users or on a segment of customers first. From there, gather feedback, identify any gaps, and adjust your approach accordingly.
• Set up custom workflows and permissions: Customise the platform to suit your internal processes. Assign roles to team members, such as collectors, account owners, and dispute handlers, and set up workflows for reminders, escalations, and follow-ups.
• Track KPIs regularly: Tracking KPIs helps you keep track of what’s working and what requires immediate attention. Monitor key performance indicators, including Day Sales Outstanding (DSO), percentage of overdue invoices, collection efficiency, response time to disputes, and team productivity.
• Keep communication open: Hold regular check-ins after implementing the software to gather feedback, share successes, and address any challenges. Continuous improvement is key to long-term success.

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FAQs - collaborative accounts receivable software

Here are some of the most commonly asked questions:

What is collaborative accounts receivable software?

Collaborative accounts receivable is a type of AR software that enables multiple teams, such as finance, sales, and customer support, to work together on a single platform to manage invoicing, follow-ups, and customer communication. It helps reduce errors and delays, improve communication, and streamline payment collections.

What makes collaborative AR Software different from traditional AR Automation?

While both collaborative AR software and traditional AR automation automate routine AR tasks, Collaborative AR software is particularly designed to support collaboration across teams. AR processes extend beyond a single department and often include finance, sales and support. With this tool, teams can better communicate with each other and avoid common mistakes, such as double-check-ins and invoice disputes.

Do small businesses need collaborative AR software?

Yes. Collaborative accounts receivable software can help small businesses improve payment collections and effectively manage their cash flow. It saves time by automating repetitive tasks, improving team communication and delivering a better customer experience.

Can customers interact with collaborative AR software?

Yes. Collaborative AR software often provides customer portals where customers can view invoices, make payments, ask questions, or track their payment status without having to contact your team directly.

Can collaborative AR software replace accounting tools?

No. Although it helps with automating AR operations, it can’t perform broader financial operations like payroll, budgeting or general ledger management. Luckily, it integrates with popular accounting software, such as Xero, QuickBooks, or NetSuite, to improve your existing workflow rather than replace it.

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