AccountsReceivable.ai
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Collections & dunning

AR deduction management software: accounts receivable deductions management that catches short-pays as the cash lands

A deduction is a short-pay: the customer sends less than the invoice and leaves you to work out why. On most teams that gap gets noticed late, weeks after the payment posts, when someone reconciling the account finally spots that a $9,400 invoice cleared at $8,900. By then the reason is cold, the backup is buried in an email, and the $500 usually gets written off because chasing it costs more than it is worth.

AccountsReceivable.ai catches deductions at the moment of cash application. When a payment comes in short, the agent matches it to the invoice, records the shortfall as an open item instead of closing the invoice, and separates the disputed amount from the balance you should still be collecting. It keeps chasing the collectible part across email, SMS and live AI calls, and routes the coded deduction to your team with the invoice and payment attached, so nothing quietly leaks to write-off. Flat monthly fee, no percentage of what it recovers.

Works inside QuickBooks, Xero & NetSuite Flat monthly fee · no cut of collections

Connect · chase · apply cash · DSO down

Collections Desk

Your books

Collected / wk

Outstanding

AR aging

Current · 30 · 60 · 60+ · paid

Open invoices

Agent worklog

Live

Put this AR on autopilot to watch the agent chase, collect and reconcile.

Dunning sequence

1 Email
2 SMS
3 Call
4 Promise
Paid

Live, interactive · no card, no connection needed

DSO → collected invoices cleared

Flat monthly fee · we never take a cut of what we collect · works inside your accounting system

QUICKBOOKS XERO NETSUITE

Flat fee no cut of collections

Bank-grade security

Why it works

What your team gets with deduction management

Caught at cash application, not at month-end

The agent spots a short-pay the moment the payment posts, while the reason is still fresh and the remittance is still attached. That is the difference between recovering a deduction and writing it off because the trail went cold.

Dispute split from collectible

A short-pay does not freeze the whole invoice. The agent records the deducted amount as its own open item and keeps collecting the undisputed balance, so one coded line does not park thousands of dollars in limbo.

Nothing leaks to write-off silently

Every deduction is logged, routed and aged like any other receivable, with the invoice and payment attached. Your team decides what to accept and what to fight, but the decision is deliberate rather than a default that happens because nobody looked.

What it handles

Chased, collected and reconciled on autopilot

The agent syncs your invoices, chases each one across email, SMS and phone, applies incoming payments to the right invoice, reconciles your ledger, and predicts when every customer will pay.

  • Detects short-pays automatically as incoming payments are applied
  • Records the deducted amount as an open item instead of closing the invoice
  • Keeps chasing the undisputed balance by email, SMS and live AI call
  • Routes each coded deduction to your team with invoice and remittance attached
  • Ages and reports deductions so recurring offenders and patterns surface
  • Flat monthly fee, no per-user seats, no cut of what it recovers
ON EVERY INVOICE In order
  1. 01 Sync Reads the open invoice, its terms and the billing contact from your ledger.
  2. 02 Chase Escalates from email to SMS to a live AI call as the invoice ages.
  3. 03 Track Logs replies, disputes and promise-to-pay dates against the invoice.
  4. 04 Apply Matches the incoming payment, reconciles the ledger and closes the invoice.
Nothing sent without your approved tone

How it compares

Where deductions get handled, and where they leak

The same short pay treated four ways. The rows below the first two are where recovery rates are actually decided.

What happens to a short pay Manual spreadsheet Accounting system alone Specialist CPG deductions tool AccountsReceivable.ai
Detected when cash is applied Only if someone notices Rarely, invoice stays part paid Yes Yes, automatically
Disputed amount split from collectible balance Manual No, invoice stays open in full Yes Yes
Undisputed balance keeps being chased Usually stops Usually stops Depends on the tool Yes, chasing continues
Remittance and invoice attached to the item Manual No Yes Yes, attached automatically
Routed to an owner with a due date Email thread No Yes Yes
Retailer portal chargebacks pulled automatically No No Yes, this is its core job No, this is not what we do
Aged and reported like other receivables Manual Partly Yes Yes
Credit memo written back to the ledger Manual Manual Depends on ERP project Yes, two-way sync

Swipe the table sideways to see every column

Why AccountsReceivable.ai

One agent that runs the whole receivables job

Not a reminder tool, not a six-figure suite, and not an agency that takes a cut. Chase, collect, apply cash and forecast in one place, on top of the accounting system you already use.

Chases every invoice

The full dunning sequence runs on autopilot across email, SMS and live AI phone calls, polite and on-brand, so no overdue invoice slips through.

Applies the cash

Incoming wires and ACH batches are matched to the right invoices automatically, so your ledger reconciles and you never chase an invoice that already paid.

Cuts your DSO

A predicted pay date for every open invoice and steady follow-up bring DSO down week over week, so more cash lands when you need it.

Good questions

Questions about deduction management

Last updated August 2026

A deduction is when a customer pays less than the full invoice amount and treats the difference as settled. It is also called a short-pay. Deductions come from disputes, shortages, damages, pricing errors, returns or agreed trade allowances. The problem for AR is that the invoice looks partly unpaid while the customer considers it closed, so the gap has to be worked rather than just chased.
Deduction management software identifies short-paid invoices, captures the reason and backup, and tracks each deduction to a resolution instead of letting it sit or drift to write-off. AccountsReceivable.ai does this as part of cash application: it flags the shortfall when the payment posts, splits the disputed amount from the collectible balance, and routes the deduction to your team with the documents attached.
Partly, and it is worth being honest about the line. The agent manages short-pays and disputes on invoices in your ledger: it flags them, separates them and keeps collecting the rest. It does not scrape retailer portals or auto-validate high-volume CPG trade-promotion chargebacks. If most of your deductions are coded trade claims pulled from Walmart or Amazon vendor portals, you want a specialist CPG deductions tool; if they are ordinary B2B short-pays, this handles them well.
Most deduction dollars are lost to time, not to genuine disputes. The longer a short-pay sits, the colder the reason gets and the more likely it is written off unexamined. By flagging the shortfall the day the payment posts, with the remittance attached, the agent gives your team a live, documented item to resolve instead of a stale mystery, which is what turns a write-off back into a recovery.
AR deduction management software finds short-paid invoices, captures why the customer deducted, keeps the disputed amount separate from the collectible balance, and drives each item to a decision. The distinction that matters when comparing tools is whether deductions are detected automatically at cash application or entered by a person after month-end, because that gap is where recovery rates are won or lost.
Five steps: identify the short pay when the payment posts, code it to a reason, gather the backup such as the invoice, remittance and proof of delivery, route it to whoever can accept or dispute it, then resolve it as a credit, a recovery or a write-off. Automation helps most at steps one and three, which are the slowest when done manually.
A deduction is any short payment the customer takes unilaterally. A chargeback is a deduction taken under a specific contractual program, most often retail compliance or trade promotion. A dispute is an objection to the invoice that may or may not come with a short payment. All three end up as an unpaid gap, but they are resolved by different people with different evidence.
Detection and routing can be almost entirely automated. Resolution cannot. Software can spot the shortfall the moment cash is applied, size it, attach the remittance and send it to the right owner within seconds. Deciding whether a deduction is valid is a commercial judgment that needs a person, and any vendor claiming full automation of that decision is overselling.
They inflate it twice over. The deducted amount stays open on the aging report until somebody resolves it, and the invoice it came from often stays open alongside it if the system cannot split the two. Separating the disputed portion from the collectible balance lets the clean part close on time, which is usually the fastest single improvement available.
Ours does, through a two-way sync with QuickBooks, Xero, NetSuite and Sage. Specialist CPG deduction platforms often need an ERP project instead. The question to ask any vendor is whether a resolved deduction writes the credit memo back to your ledger automatically, or whether somebody keys it in a second time.
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More ways finance teams collect with AccountsReceivable.ai

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The collections desk on autopilot, across every channel.

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Dunning management software

A full dunning sequence that escalates email to SMS to call.

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Invoice collection software

Chase and collect unpaid invoices without lifting a finger.

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See every AR use case See AR pricing Back to the AI AR agent

Go deeper

The steps either side of a deduction

HighRadius competitors

Versapay, Billtrust, Quadient AR, Esker, BlackLine, Sidetrade and Serrala compared against HighRadius.

Read the comparison

Cash application software

Deductions surface at the moment cash is applied, so the two steps are really one workflow.

Read the comparison

Collections automation software

Keeps chasing the undisputed balance while the deducted portion is being resolved.

Read the comparison

Integrated receivables software

Where deductions sit inside a full invoice-to-cash platform, and what the suites charge for it.

Read the comparison

Credit management software

Repeat deductors are a credit signal, not just an AR nuisance.

Read the comparison

NetSuite cash application software

Where short pays are detected before they become a deduction case.

Read the comparison

Stop chasing invoices. Put your receivables on autopilot.

Connect your accounting system and the agent chases every invoice, applies the cash and cuts your DSO. Flat monthly fee, and we never take a cut of what we collect.

See pricing

Works with QuickBooks, Xero and NetSuite · bank-grade security · no percentage of collections