10 Tips on Automating the Cash Application Process


What you’ll learn


  • Learn how automating cash simplifies and accelerates the cash posting process by up to 90%.
  • Discover how automating cash application can help your team perform higher value-added functions.
  • Understand the benefits of automatic remittance data capture and minimize manual exception handling.


Introduction

The cash application process is highly manual, time-consuming, costly, and error-prone. Companies receive many forms of payment (check, ACH, wire transfer) across multiple lockboxes or banks and customers often provide inconsistent remittance detail in a variety of formats (paper, EDI, email attachments, online portals). On top of this inefficiency, the cost of paying the bank to key in data from paper remittances can be very high and only partially address the problem.  Also, as you know, remittance line items can sometimes refer to alternative reference numbers that are not on the original invoice.

Audit and compliance issues arise when a company is sitting on unapplied or improperly applied cash, making accuracy and efficiency all the more critical. Knowing all of this, the Encyclopedia of Credit offers 10 tips/benefits on automatically applying cash:

  1. The use of automating cash application software to process customer payments enables the cash application team to perform higher value-added functions.
  2. A 50% auto cash processing rate would be considered low.
  3. With effort, automating cash rates can climb to 90% or higher.
  4. One benefit is that much of the drudgery of cash applications can be eliminated using auto cash.
  5. Automating cash both simplifies and dramatically accelerates the cash posting process, making possible better credit decisions based on more current information.
  6. Another benefit of automating cash application is that this automation process should result in cost savings including the possibility of headcount reductions in cash application.
  7. Automating cash enables cash application personnel to focus on higher-value activities such as addressing disputes and deductions more quickly.
  8. The benefits of automating cash include the fact that by using auto cash, the cash application handles only exceptions. An exception is a payment that did not post automatically.
  9. Understanding why certain customer payments cannot be matched means that the cash application team can either (a) change their system to improve its auto cash hit rate, or (b) discuss with customers specific changes that would result in a higher auto cash rate.
  10. This is proven technology. It is nowhere near the leading edge.

Learn how Reckitt Benckiser increased their on-invoice hit rate to 98.5% by watching the recorded webinar on, “Cash Application Case Study”.

Never miss an

Update

Subscribe to our NEWSLETTER

Recommendations


  3 min

How did DB SCHENKER Ace The Cash Application Game Using Automation

Abstract

About DB Schenker DB Schenker is a logistics company with about 1,640 crores EUR annual revenue and 72000 employees worldwide. It has expanded to over 2000 locations globally with over 750 warehouses. DB…

  3 min

  59 min

Cash Application Cloud Best Practices Webinar

Abstract

HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company that leverages Artificial Intelligence-based Autonomous Systems to help companies automate Accounts Receivable and Treasury processes.

  59 min

6 RFP Templates for Order-to-Cash Vendor Evaluation

Abstract

An insightful summary of how Fortune 1000 companies & SMEs are evaluating their vendors for digital transformation of their accounts receivable processes.