---
title: "What is Accounts Receivable Software? - AR Dictionary"
description: "Accounts receivable software manages what happens to invoices between issue and payment: reminders, statements, late fees and reporting. See what it does and what it is not."
url: https://www.paidnice.com/dictionary/accounts-receivable-software
---

# Accounts Receivable Software

## What is accounts receivable software?

**Accounts receivable software is a tool that sits on top of a business's accounting ledger and manages what happens to invoices between issue and payment.** The accounting system raises the invoice. The software does the work that follows it.

That work splits into three jobs: chasing (reminder sequences, statements and escalation), enforcing (late fees, interest and payment plans) and measuring (days sales outstanding and aging). Most tools are strong at one of the three. It is a different thing from [accounts receivable](https://www.paidnice.com/dictionary/accounts-receivable) itself, which is the money customers owe, and it overlaps with [collections automation](https://www.paidnice.com/dictionary/collections-automation).

A business usually reaches for this software when the accounting system alone is not enough: reminders are sent late, nobody knows which invoices are overdue, and the same customers are chased differently each month. The software puts the follow-up on a schedule, so each overdue invoice gets the same steps in the same order.

It is not the accounting system, which keeps the books. It is not a [collection agency](https://www.paidnice.com/dictionary/collection-agency), which takes over after your own chasing has failed.

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