“Revenue is vanity, profit is sanity, but cash is king.”
Cash flow is what keeps businesses afloat as well as fuels their growth. Hence, managing cash, especially during an economic downturn is even more important to field any unprecedented requirements and ensure sustained working capital. Business leaders cannot predict a likely economic downturn with a crystal ball. Though it is suggested that the key to limiting risks in a recession is to be proactive rather than reactive due to market turbulence and the possibility of financial instability.
Cash Application analysts must put in a lot of proactive effort to gather and consolidate all the remittances that are submitted on web portals or attached to emails. Companies often have a number of sellers who send payments through several channels. As a result, AR matching becomes a problem and requires a lot of your:
- Additional time to go over each transaction
- Money to efficiently operate and segregate data from different sources
Imagine getting all the remittance information at hand as soon as the payment arrives without having to go through the pain of remittance aggregation from customer portals and emails for each and every customer. Amazing right?
Let’s walk you through the journey of America’s leading collision repair company, Caliber Collision
which faced some similar bottlenecks and won against them consistently, and achieving a 95% invoice hit rate and a 95% straight-through processing.
This blog hopes to answer some important questions that Cash Application analysts have been looking for :
How to deal with a huge number of ACH payments per day?
How to ensure accuracy and reduce the possibility of errors?
How to secure time, money and productivity altogether?
To better articulate our response to these ‘Most Common’ questions by analysts, let's take a look at how we helped one of our clients overcome cash application challenges.
The story of Caliber Collision
Caliber Collision was plagued with similar issues. The company had more than 1 million payments that were made annually.
The company used 10 different processes for ACH payment reconciliation.
The payments got accumulated from different insurance companies and they had to be operated manually.
The company had 5 coordinators
and 3 analysts
who were appointed to gather remittances from insurance portals and emails, and update the data into spreadsheets using formulas to map open AR.
WHY IS CASH APPLICATION A NIGHTMARE?
Cash Application has been a huge hassle since companies became EFT (Electronic Fund Transfer) heavy. The collection of remittances has been really difficult, as they never came in with the right invoices. The remittances were sent either through emails or uploaded on the web portals. Ergo there were few major challenges faced by analysts :
Manual reconciliation of payments with bank statements from bank portals which required a lot of attention from cash analysts that could have been used for higher-value tasks such as credit and collections.
Manual logging of web portals more than 500 times a day to recover the remittances and manually upload the data into the database for AR matching.
Loss of time and productivity as data was aggregated, uploaded and consolidated manually into spreadsheets.
Visible human errors as the whole process was very cumbersome and redundant.
HOW AUTOMATION LED TO A GOODNIGHT’S SLEEP
“Old ways won’t open new doors”
The introduction of automation into the Cash Application process was a milestone.
The work of analysts and coordinators in managing Cash Application processes was better optimized, and they were able to devote their time and effort to overseeing high-value tasks for a change. Some of the major turning points were :
Automatic retrieval of bank files from the server which lowered the manual effort to a huge extent.
Auto-download of remittances from the portals using bots which saved a lot of time and productivity of the cash analysts.
Automatically capture information using an AI-based data aggregation engine which reduced the chances of human error and saved up to 12 man-hours per day.
Automatically link payment to remittance using an AI-enabled AR-matching engine which made the process swift, simple and ten times less cumbersome.
“HighRadius has really been a game-changer that helped us eliminate manual and non-value added tasks.”
| Senior Director of Treasury
At HighRadius we believe, customers and employees together make a happy kingdom.
Thus today, employees at Caliber Collision have a stable work-life balance
and the company has been a constant guest of :