Cash application is often overlooked in the AR process because it’s the last step in the cycle, and for many companies a tedious, time consuming task. However, there are a number of reasons why cash application deserves more attention and should be automated.
Why Cash Application is Important and should be Automated
The cash application process is important because of the need for a timely and accurate picture of individual customer accounts and accounts receivable in total.
If cash application is delayed or inaccurate, it can tie-up credit lines and delay customer orders, sales and cash flow, and unfavorably affect customer experience. It also can skew total AR KPIs and make it difficult to know the status and quality of AR.
Cash application can also be a serious drain on your team. Whether applying cash or electronic payments, matching payments with remittances can be very tedious and time consuming because of inconsistent channels and formats, and incomplete or inaccurate master data. Manual cash application is also an error-prone process compounding the inefficiencies and time drain.
With your AR team working remotely manual cash application becomes even more trying. The individuals and information needed to correctly apply payments are not readily available, delaying the process and increasing opportunities for application errors.
Accounts receivable automation with an automated cash application process can help to keep cash application timely and accurate, and reduce the drain on your AR team. Orders and cash will flow unimpeded, and customer experience will be enhanced.
AR Automation of Cash Application Process
AR automation with artificial intelligence (AI) cash application technology can automatically match payments and remittances with open invoices using invoice numbers, account numbers, purchase order numbers, and bill of lading information. Advanced AI cash application solutions can even learn to recognize inconsistencies in a customer’s remittance behavior, that if not identified would result in a cash application deviation requiring further investigation.
With collections automation and automated cash application your team can process more payments, reduce unapplied cash, and free-up customer credit lines to keep orders, sales and cash flowing. The time saved can be used more productively to contact priority collection accounts and increase collections
Accounts receivable and accounts payable cloud-based solutions with customer/vendor portals and digital processes keep vendors and customers connected whether they work remotely or not.
With a connected accounting solution for your accounts receivable and accounts payable teams to coordinate work with customers and vendors, you can go digital and enjoy the benefits of office automation.
Lockstep Collect, a leader in cloud-based connected accounting solutions, can help you boost productivity and optimize cash flow with:
- Automated Communications
- Customer Self-service
- Collections Activity Management
- Reporting & Forecasting
Lockstep is an experienced software partner that can help you increase efficiency and accelerate cash flow.
If you would like to learn more about how you can benefit from connected accounting solutions, please contact Lockstep or visit us at www.lockstep.io