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These delays can make it more difficult to get an up-to-date and precise view of your receivables, making it harder to determine which accounts genuinely have overdue payments and which are yet to have their payments processed. This creates a domino effect resulting in an inaccurate overview of your accounts and overall business revenue. For businesses like https://1investing.in/ Danone, which have operations in multiple countries, an SSC often utilizes different service providers in each country for various functions such as scanning, banking services, e-invoicing portals, and ERP systems. To navigate this uncertain economy it’s vital that move away from just transactional tasks and assume more strategic decision-making roles.

  1. Achieve high AR automation and payment matching rates up to 99%, powered by Serrala’s artificial intelligence (AI) cash application solutions.
  2. It also comprises
    reviewing payments made by check, credit card,
    electronic fund transfer (EFT), automatic clearing
    house (ACH), and many other payment methods,
    matching them to open invoices and marking
    them as paid.
  3. Request a demo of our automation suite and take the first step toward your financial evolution.
  4. FS² AutoBank is also embedded in SAP, which means you can post and update data in SAP in real-time.

This means happier team members, carrying out more fulfilling work, that has a bigger impact on the financial health and prospects of your business. When manually performing cash applications, it becomes necessary to allocate personnel to meticulously analyze a nd input remittance data, especially in cases where the information is either missing or difficult to decipher. To mitigate such challenges, numerous businesses opt for receiving payments via checks, as these often come with an accompanying remittance advice. Cash application is an integral part of the broader accounts receivable (AR) process, as it effectively allocates incoming payments to their respective customer accounts and outstanding invoices.

If the supplier’s cash application process is slow, it delays the credit replenishment for the buyer. Due to the excessive amount of time it takes your accounting team to correctly match payments to invoices, the cost of manually processing invoices is significant. Not to mention if an error is made,the length of time it takes to correct this mistake raises costs substantially.

This digital landscape introduces fresh complexities and obstacles for organizations to navigate, demanding innovative strategies and robust systems to effectively manage and reconcile incoming payments. By proactively addressing these challenges, businesses can ensure accurate cash application, minimize discrepancies, and maintain strong customer relationships. Before automation, almost 100% of Cash, Collections, Credit, and Deductions work was performed manually. That meant the analysts had to go through the entire cash application process with precision to handle specific errors.

Less Time Spent Obtaining Remittances from Different Sources

If a customer notices recurring errors, it can potentially jeopardize the relationship between the parties involved. Now, let’s explore some of the main challenges that organizations commonly face when adopting a shared services approach. We have successfully led numerous cash application transformation projects for order-to-cash organizations spanning various regions and industries. Now, let’s examine a specific case study to gain a deeper understanding of how our expertise can benefit you.

Regularly monitor KPIs and promote continuous improvement

This blog helps you understand the role of technology in eliminating manual, tedious tasks, improving FTE productivity, and applying cash faster. Otherwise, it’s just this big, convoluted batch of miscellaneous payments in accounts receivable. It’s like a closet full of presents — you have to check the names of the presents to know who to give them to before opening them. Advanced automation in cash application—This has become
increasingly sophisticated, using modern technologies such as
robotic process automation (RPA), artificial intelligence (AI), and
other machine learning capabilities. To learn more check out The Ultimate Guide to Cash Application, which includes our cash application software checklist.

What used to take Haas Door all day, now takes minutes with advanced cash application

Other benefits include enhanced accuracy, security, affordability, visibility into financials, improved customer service, and scalability. Additionally, it improves DSO, working capital, and impacts credit, collections, and dispute processes through customer behavior analysis and crucial information provision. Automating cash application processes involves implementing advanced technologies that identify, retrieve, and match payments and remittances from a variety of sources as detailed above.

On average, B2B businesses dedicate 15% of their staff to supporting cash application or reconciliation full time. The most advanced cash application automation solutions are equipped with capabilities like machine learning, robotic process automation (RPA), optical character recognition (OCR), and artificial intelligence (AI). This helps you achieve straight-through processing for incoming payments, as they can get matched to the right invoices without your cash application team having to intervene. There are many benefits of implementing an automated cash application solution within your AR function. It’s also keyed in electronically, making it easier to manage and share with the cash application team.

For payments made by check, the remittance information may be included in the memo line or an accompanying document attached to the check. However, the lack of global operation from these providers results in a lack of standardization across multiple lines of business (LOBs). This inconsistency in processes is particularly evident in supplier payments and invoicing, where different formats are required based on the specific ERP system or country involved. As a result, businesses require an agile and streamlined process that seamlessly integrates with their ERP systems across different geographies. A secure built-in solution like SK Global’s significantly reduces the risk of internal check fraud. Through decreasing the amount of staff exposed to payment information, automating your cash application process heightens security.

Without a streamlined and efficient cash application process, there’s no guarantee that the cash received from customers correlates with what is owed to the business. There is also an impact on your customers and their future ability to transact with you, as well as your ability to utilize the cash within the business itself. Cash application is the process of matching customer payments and remittance info to corresponding invoices. Unless this is done and the cash is posted in the ERP system, the funds will not be available for use.

It involves matching incoming payments to the correct remittance information, invoices, and customer accounts so you can deduct the amounts from your remaining unpaid receivables. Order To Cash (OTC) Softwaresolutions designed for automation of the entire order-to-cash cycle are sometimes the most effective option for implementing automated ar cash application processes. These solutions can incorporate data from variety of sources, analyze the data and enable users to effectively manage customer accounts.

You match payments with the correct remittances,
customer accounts, and receivable invoices,
record the payment and enter it into your ERP. With advanced cash application automation technology, you can harness powerful, high-tech tools to make your cash application process smarter, faster, and stronger. The faster the customer payments are matched and applied to the correct invoices, the more swiftly they can be applied to the appropriate account.

When funds aren’t withdrawn from their accounts in a timely fashion or they don’t receive a receipt, their accounting gets more difficult and their forecasting suffers as a result. In fact, approximately 85% of finance leaders are
still manually matching payments with remittance
information. If you are ready to enjoy all the benefits of an automated cash application process, click the button below to reach out to us – let’s have a conversation. Until you’ve recorded an incoming payment in your accounting systems, you can consider that cash non-existent. By applying payments to their corresponding invoices, you are ensuring the business has a right to those funds. An automated cash application solution should not only follow a set of rules but should also assist in decision-making.


While no two companies follow the same cash application process—because companies vary in nature,
size, volume of customers, quantity of invoices, and delivery and payment methods—there are general
steps common to most. Cash application is a critical component of your
accounts receivable operation and focuses on
matching incoming payments with customer
accounts and the correct open receivable invoices. With a manual cash application process, the time between a sale and the recording of a payment is longer, which can inflate your days sales outstanding. Not all invoices are paid in full, which is why our solution delivers a great customer experience by managing complex payment matching. We recognize whether customers are paying a full invoice, multiple invoices, short-paying, or making a line-item payment, and match accordingly. An integrated cash application solution also enhances customer experience by providing customers with faster updates on their financial accounts with your company.

The up-to-date financial information about the company’s cash position also provides management with data that can be used to drive the company’s operations on a daily basis. With this information, further financial decisions can be made on how cash needs to be utilized for other areas of day-to-day operations or fuelling the growth of the company through strategic investments. By meticulously executing cash application, organizations can maintain a clear and transparent record of their financial transactions, facilitating optimal financial management and decision-making. In this blog, we will look into what is cash application, why is it important, what makes it complex and how to overcome the challenges of cash application automation. Many cash application services will offer similar services, but their efficiency and ability to fit your business is what counts. Today, we’re going to talk about what cash application is and how you can improve your own AR cash application process.

Until cash is appropriately assigned, businesses are unable to utilize it for various purposes. Through robust technology embedded into Microsoft Dynamics 365 Finance and Operations, our AR Cash Application module requires zero additional data entry to match payments or process direct debit file transmission to the bank. Additionally, your business can automatically import payment files from any number of banks and bank accounts. Our module will seamlessly process, map, and apply incoming payments to the correct customer invoice all within your D365 environment.

Cash application plays a critical role in managing the accounts receivable process of any organization. It involves matching incoming payments to the correct customer accounts, invoices, and purchase orders. Manual cash application processes are often time-consuming, error-prone, and can result in delayed or inaccurate posting of payments. This can create a domino effect on other business processes, leading to delayed payments to vendors, inaccurate financial reporting, and strained relationships with customers. Cash application is a process and work stream that exists inside accounts receivable teams worldwide. Cash application is a critical process in managing accounts receivable and cash flow.

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