When it comes to accounts receivable (A/R), a lot of work happens between sending an invoice and seeing usable funds show up in your account. And to keep that invoice-to-cash (I2C) cycle as short as possible, many businesses rely on A/R automation solutions. Unfortunately, when choosing these platforms, finance teams often spend most of their time comparing dashboards, workflows, and flashy artificial intelligence (AI) features, while leaving their business-to-business (B2B) payment processing as an afterthought.
That’s a mistake. The payment layer dictates when cash arrives, how much it costs to get there, and how cleanly it reconciles when it does. Put simply: when you choose your A/R software, you’re also choosing how quickly you get paid. In this article, we’ll look at the three payment models behind A/R software, why embedded payments go further than integrated ones, and the questions to ask before you choose.
What to look for at a glance:
- Where a payment settles determines how much cash application work is left for your team.
- A separate processor means separate fees, a separate record, and an extra reconciliation step at every close.
- The payment methods you accept affect both your days sales outstanding (DSO) and your processing costs.
- International customers pay faster when they can pay in their own currency with a familiar payment method.
- Compliance should come with the platform, not with a second vendor.
Integrated vs. embedded payments: what’s the difference in A/R?
In an accounts receivable context, integrated payments (sometimes called integrated receivables) means your A/R software connects to a payment processor so you can accept payments from invoices and reminders. The term is also common in point of sale (POS), where it describes checkout systems that take payments without a separate app.
Embedded payments go a step further. Instead of connecting two systems, payment acceptance, settlement, and cash application run inside the A/R platform itself. The same record moves from invoice to reminder to payment to match, so nothing is re-keyed and nothing needs to be reconciled across systems.
That single record also carries remittance data as it arrives. Your team can trace any billing or payment anomaly in one place, and reconciliation gets simpler because every document already points to the same source.
Three payment architectures sit behind every A/R software decision
Not every B2B payment solution offers the same capabilities or connects to payment gateways in the same way. Most A/R platforms use one of three models:
A/R software plus your own processor (connection varies)
With this option, the A/R solution doesn’t process payments natively. Instead, it integrates with the B2B payment processor or payment facilitator you bring. Transaction data passes between the two, but invoices and payment details often live in separate systems, which makes cash application and reconciliation more complex. Depending on the tools, the connection may be a true integration or little more than payment links and manual imports.A/R software plus the vendor’s partner gateway (integrated)
For these solutions, the software vendor owns the relationship with a third-party payment processor, and the integration happens out of view. Vendors often market this as embedded finance, and fewer integrations can mean a smoother experience. But settlement and payment data are still handled by a third party you typically have no direct relationship with, and payment issues often get routed through the software vendor as a go-between..A/R software on an owned payment network (embedded)
Here, the software vendor is, in effect, the payment processor. The platform is built to accept and settle payments, so the entire I2C process is handled within a single framework with no third party. The invoice, the reminder, the payment, and the match are all one record. This approach makes cash application and reconciliation the most straightforward and typically yields the most accelerated cash flows.
What changed in 2026: A/R AI can only finish the job when it can see the payment
At this point, virtually every accounts receivable solution now uses agentic AI, including Invoiced by Flywire. But what those agents can do depends on how the platform handles payments. If a third party collects the funds, an agent can’t complete cash application or matching on its own; at most, it can recommend. Conversely, when the agents run on the same platform that settles the payment—like they do with our solution—automation goes further: AI handles the chasing and matching, and your team handles only the exceptions.
Accounts receivable payments are also getting more complex as cross-border transactions become commonplace. According to the 2025 AFP Digital Payments Survey Report, 87% of responding organizations now make cross-border payments, up 9 percentage points since 2022. Cross-border payments require local currencies and B2B payment types, so payment data needs to move smoothly into your ERP, especially as volumes increase.
How businesses pay is changing too. The same AFP survey found checks now account for 26% of B2B payments, down from 33% in 2022. Meanwhile, B2B automated clearing house (ACH) transactions grew 9.9% to 8.1 billion payments in 2025, according to Nacha.
How to evaluate the payments side of A/R software: 6 questions to ask each vendor
Key Insight: Every handoff between the system that asks for a payment and the system that takes it is a chance for cash application to break. When choosing your A/R payment processing solution, ask each vendor to demo a payment going from reminder to posted cash in one record.
Because payments are central to the I2C cycle, they should stay top of mind when choose accounts receivable software. Ideally, payments are embedded in the platform, which makes life easier for your A/R team and for the customers paying you. Otherwise, billing and IT get more complicated over time as you patch gaps with manual processes, standalone cash application software, or other ad hoc tools.
When evaluating which platform is right for your payment processes, ask:
Who settles the payment? Does the transaction run on the vendor’s own network, or through a third-party processor? If a third party is involved, who manages that relationship?
Which methods and currencies can my customers use? Depending on where your customers are located, they may need more than ACH or credit cards. Look beyond where you operate today and choose a platform that supports local payment methods in the markets you’ll grow into.
How are processing fees structured? Every party that touches a transaction takes a cut, so fewer parties usually mean lower costs. Ask for a clear fee schedule so you aren’t surprised by surcharges, FX markups, or who sees the fee line.
Does the payment arrive already matched to the invoice? Does the platform know where each payment came from, or will your team spend time figuring that out?
What compliance comes with the platform? Know which standards you need to meet, and confirm the platform meets them. At a minimum, look for Payment Card Industry Data Security Standard (PCI DSS) Level 1, System and Organization Controls (SOC) 2, and anti-money laundering (AML) compliance.
How do payments post to my ERP? Is there a native integration with your ERP? Do syncs happen in real time, and do they run both ways? For cross-border payments, does the platform capture enough data to sort by entity or currency?
Key Takeaway: If your vendor has to pass any of these questions to their payment partner, you run the risk of dealing with a middleman for any transaction-related questions or challenges in the future. However, when the vendor owns the payment network, you get all your answers and support in one place.
A bolt-on payment processor costs more than its fee schedule shows
The real cost of a B2B payments platform isn’t limited to the software subscription. Depending on how much the solution automates, you may also spend on:
Reconciliation labor: If matching isn’t automatic, staff spend hours lining up processor payouts (net of fees) against invoices. Short payments, duplicate payments, and other exceptions make it harder.
Slower cash: Every handoff adds delay to payment cycles and cash flow.
Vendor and compliance overhead: A third-party processor means a second contract, a second security review, and a second support line.
What embedded payments in A/R software should include
| Capability | What it does | Why it matters |
| Owned payment settlement | The A/R platform settles the payment itself | One record from reminder to cash |
| Local payment methods | Buyers pay in a familiar currency and method | International customers pay faster |
| Payment-aware cash application | Payments arrive tied to the customer and invoice | Less unapplied cash and a faster close |
| Bank transfer and wire matching | Wires and transfers match alongside cards and ACH | No manual matching at month-end |
| Built-in compliance | PCI DSS Level 1, SOC 2 type II, and AML compliance come with the platform | Clients don't need their own PCI compliance for payment acceptance |
| Native ERP posting | Payment data syncs to the ERP automatically without re-keying | More accurate, up-to-date ERP records |
Why A/R software and payments should be one decision
Payments are central to accounts receivable, and embedding them in your A/R platform can make a real difference in how quickly and fully you get paid. So, when choosing an I2C platform, look closely at how it handles payments. Will you need your own processor relationship? Can you offer the payment methods and currencies your customers expect? How much does the solution automate, and what does a payment look like as it moves from reminder to close?
The right platform will also depend on your transaction volumes, ERP, reporting needs, budget, and global footprint. Whatever you choose, make sure it covers the full cycle, from invoicing to payment to close.
Invoiced by Flywire: AI-native invoice-to-cash with the payment network built in
Invoiced by Flywire is one AI-native platform to invoice, collect, and get paid faster, domestic or cross-border, integrated directly with your ERP. Our Accounts Receivable Automation software runs on the Flywire payment network, infrastructure Flywire owns end to end. That means we can natively support transactions across 1,200+ local payment options in more than 140 currencies, with PCI DSS Level 1, SOC 2 Type II, and AML compliance built in.
AI is embedded directly in the A/R workflow. Smart Chasing adapts collections outreach automatically, and CashMatch AI handles payment matching, so clients spend on average 70% less time on payment reconciliation. Clients also see an average 60% faster settlement, a 14-day reduction in DSO, and 45% lower payment processing costs.
Our self-service customer portal gives payers one place to access outstanding invoices, make a payment, and manage saved payment methods and AutoPay, plus around-the-clock payment support in 19 languages. Clients report 45% fewer billing inquiries on average. Learn more about our A/R payments and global payments and multi-currency support.
With $37.5B+ moved through Flywire’s network every year, we treat payments as a priority, not an afterthought. Schedule a demo to see it in action.
FAQ
What’s the difference between integrated payments and embedded payments in accounts receivable?
In A/R, integrated payments means your A/R software connects to a payment processor so customers can pay directly from invoices and reminders. Embedded payments go further: acceptance, settlement, and cash application all run inside the A/R platform, so payments post and reconcile against one record.
Do I need a separate payment processor if my A/R software accepts payments?
Not always. Some solutions may require you to maintain your own relationship with a payment processor. Others manage a third-party processor behind the scenes. Platforms with embedded payments run on their own payment network, so there’s no separate processor to manage.
What is the difference between a payment gateway and a payment processor?
Put simply, a payment gateway is a piece of technology that captures payment data at checkout and securely passes it between the parties in a transaction. By contrast, a payment processor is an organization that serves as a transaction handler, providing the necessary infrastructure to route payments through relevant networks, facilitate authorizations, and coordinate fund transfers with banks and card networks. As such, a payment processor will typically use payment gateways to execute their operations.
How do embedded payments reduce DSO?
Embedded payments remove the need to move data between systems, which eliminates transcription errors and the delays they cause. When payments run inside an automated A/R workflow, often driven by AI, there are fewer delays between steps. And because incoming payments are already tied to the invoice and customer, cash application and reconciliation happen in moments.
Which B2B payment methods should A/R software accept?
The answer really depends on what payment methods your current and future customers want to use. For businesses within the United States, you’ll likely want to support the most common payment types: automated clearing house (ACH), credit cards (including virtual cards), debit cards, bank transfers, and alternative payment methods (APM). If you operate internationally, you’ll also want to support local payment methods and currencies, like Single Euro Payments Area (SEPA) transfers in Europe or Bacs in the UK.
