---
title: "What is Accounts Receivable Automation? - AR Dictionary"
description: "Accounts receivable automation is software that sends reminders, statements and late fees by rule. See what it covers, what stays with the ledger and how it differs from AP automation."
url: https://www.paidnice.com/dictionary/accounts-receivable-automation
---

# Accounts Receivable Automation

## What is accounts receivable automation?

**Accounts receivable (AR) automation is software that sends reminders, statements and late fees by rule, so invoices get paid on time.** It covers the work between "invoice sent" and "invoice paid". On a cloud ledger such as Xero or QuickBooks Online, the ledger creates the invoice and records the payment, and the automation runs the follow-up in between.

You set the rules once: your payment terms, a grace period and customer groups, so key accounts can get a softer schedule. The schedule then runs on its own. It ends when the invoice is paid, can pause until a promised date or while a dispute is open, and hands the account to a person when a customer stops responding.

[Collections automation](https://www.paidnice.com/dictionary/collections-automation) is the chasing part of it: reminders, late fees and escalation. [AP automation](https://www.paidnice.com/dictionary/ap-automation) does the same job for the bills you pay, not the money owed to you. The work is called [credit control](https://www.paidnice.com/dictionary/credit-control) in the UK and Ireland and [debtor management](https://www.paidnice.com/dictionary/debtor-management) in Australia and New Zealand.

For how it works step by step, with examples, read [what is accounts receivable automation](https://www.paidnice.com/blog/what-is-accounts-receivable-automation).

**Related terms:** [Collections automation](https://www.paidnice.com/dictionary/collections-automation), [AP automation](https://www.paidnice.com/dictionary/ap-automation), [Accounts receivable](https://www.paidnice.com/dictionary/accounts-receivable), [Accounts receivable software](https://www.paidnice.com/dictionary/accounts-receivable-software).

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