Risk Evaluation: The Perils Of Not Utilizing Cash APplication Software


For finance executives who are considering transitioning away from manual cash application system, the risk in doing so should not be underestimated. There are variety of impediments, dangers, and consequences that organizations face when forgoing purchase of cash application software.

The primary danger associated with failing to deploy robust system of cash application software is that of misapplied payments. Without software to automate the process, it is highly difficult for companies to accurately and quickly detect, identify, and analyze the data within their payments. Without an effective system for reconciling remitted payments, organizations are left with inaccurate and disparate records. This can lead to instances of misplaced payments, and thus, an increase of operational costs that represent financial burden. Aside from simply being costly, misapplied payments also result in customer dissatisfaction due to delays in the process and incorrect allocations.

Beyond misapplication, another issue of concern is that of visibility. Manual cash applications lack the capacity to deliver real-time visibility into the payment process. Without ample visibility into their cash flow, it is nigh impossible for executives to make timely decisions, such as investing into expansions or analyzing market growth.

Furthermore, without software in place, organizations risk further losses due to fraud. Cash application software is able to provide enhanced cybersecurity measures, allowing companies to ward off malicious actors. Manual reconciliation processes are highly vulnerable to cyber threats, with employees potentially exposed to credential hijacking schemes.

Finally, lack of software implies that applicable companies must operate their accounts receivable and accounts payable functions in silos. This can result in delays in communication between departments and decrease in efficiency. However, software solutions such as order to cash software are constructed to combine the two operations into single platform, creating an efficient, integrated workflow.

In sum, foregoing cash application software is indeed risky proposition. Split payments, cybersecurity threats, data visibility, and operational inefficiencies are just some of the detriments that unmaterialized organizations may face. Thus, it is of paramount importance for finance executives to recognize the need for software-based solutions.