Cash APplication Risk: Considerations When Choosing Order To Cash Software
Cash Application Service
it is harsh truth in the businesspace: when there’s an order to cash process, the lack of cash application risk analysis can lead to significant cost and future liability. Such analysis makes it necessary to consider the long-term benefits of an effective order to cash software in order to reduce risk exposure.
The proliferation of digital-first companies has increased the volume of cash transactions. As such, it is essential to have an effective cash application process that accurately and efficiently captures cash payments, integrates them with the payable system and reconciles the accounts. Automating the process through order to cash software is the only way to ensure reliable system.
Despite the number of tools available, there exist several risks in not using software for cash application. Let’s take look at few of the hidden costs that come with manual cash application:
Error Risk: Manual cash application is dependent upon manual entry of data and is thus prone to error. An error in cash application can lead to the misdirection of payments or errors in balance reconciliation. This can create issues in payment processing and can even lead to disputes with customers or suppliers. Order to cash software automates the cash application process, dramatically reducing the error rate.
Margin Loss: Cash applications done manually by finance staff can often lead to delays in payment processing and result in margin loss. With order to cash software, payments can be processed more quickly and precisely, improving working capital optimization.
Maturity Risk: Cash application erodes its own value over time. Delays in reconciling accounts due to manually intensive verification processes can leave business vulnerable to account misdirection, invoice fraud, and transparency issues. Automated reconciliation through order to cash Softwarestreamlines the process and ensures accuracy and compliance.
From C-Suite to Accounts payable, automated cash application is an important tool to reduce risk, maintain compliance, and enhance payment processing. Investment in reliable order to cash software can be daunting decision, however, careful research and analysis of the provider and product offering can lead to reduced costs and pro-active financials. Automating the cash application process has risen up the priority list of essential processes, with potential savings and liabilities of millions of dollars at stake. The benefits of going digital with cash application cannot be disregarded; digital-ready companies are uniquely positioned to take advantage of the opportunities.
