Optimizing Your Order To Cash Performance With Automated Cash APplication & Tracking


Effective accounts receivable management is critical skill for any finance executive. Automated cash application tracking can streamline account activities and reduce the manual effort required to ensure the timely and accurate processing of payments and receipt of cash. In this article, we will discuss the value of automated cash application tracking for order to cash (O2C) performance and will provide step-by-step guide on how to get the most out of it.

The O2C process has become increasingly more complex over time, with added pressure from customers to process payments quickly and securely. The growing global market, burgeoning customer service expectations, and ever-changing payment trends have shifted the responsibility for accuracy and cash flow optimization to the office of the CFO.

Using manual AR processes to track and allocate customer payments can create added inaccuracies due to tedious clerical tasks, manual entry errors and slow invoicing processes. Automation in this area can provide competitive advantage over manually-driven processes and will help to streamline the O2C cycle.

An automated cash application tracking solution can provide several advantages to finance executives managing the O2C process. This technology can automate the reconciliation of information between invoices, payments and customer accounts and effectively help to ensure prompt processing of payments. An automated solution can also help identify and resolve customer disputes, reduce customer call time and support an uptick in service levels. Additionally, it can promptly identify out-of-terms payments, resulting in reduced payment delinquency and increased cash flow.

Automated cash application tracking provides the capability to quickly capture payments and to accurately reconcile transactions against customer accounts, ensuring cash collection efficiently and without delay. Here are some of the steps to deploy and use an automated cash application tracting solution for O2C optimization:

1. Ensure data accuracy: Make sure that all customer data is accurately loaded into the system and is properly aligned with customer payment records.

2. Set up payment tracking mechanisms: Configure the system to track payments from customer accounts, including customer remittances, deposits and payments received.

3. Analyze customer accounts: Utilize customer analytics technology to identify opportunities for increasing customer satisfaction levels as well as identify potential customer disputes.

4. Automate the cash application process: Establish automated rules to quickly reconcile customer payments against invoices and customer accounts.

5. Monitor accounts receivable performance: Leverage dashboard reporting that can provide the ability to monitor customer accounts payables (AR) performance, such as days sales outstanding (DSO) and cash collection collected.

6. Generate customer statements: Utilize the system to generate customer statements, outlining payments received, customer delinquencies and customer disputing.

7. Identify opportunities for improvement: Utilize the system to identify opportunities for improvement, implementing customer service process improvements as well as payment optimization initiatives.

By leveraging automated cash application tracking for O2C optimization, finance executives can increase customer satisfaction by providing more accurate and timely customer invoice processing and payment posting. Automation of the O2C process can also reduce operational expenditures and enable finance teams to gain better visibility into cash collections, ultimately increasing customer satisfaction and improving the bottom line.