Risk Of Not Automating Cash APplication In Order To Cash Process


With modern Finance Executives under constant pressure to deliver new efficiencies, software solutions present an obvious way to automate the cash application process. Automation of the order-to-cash process reduces costs and contributes to agile financial operations. Nonetheless, the risk of not automating the cash application process remains perennial challenge for finance executives looking to maximize their organizations financial performance.

Largely, failing to introduce automation in the order-to-cash process can minimize visibility and impede cash forecasting. Without having reliable information regarding the current status of receivables, organizations risk missing out on potential business opportunities and exposing themselves to unacceptable levels of risk. Automated software for the cash application process can eliminate these uncertainties and improve the accuracy of Cash-on-Cash and Cash-to-Net Income analysis.

An automated cash application process can also enable smart reconciliations and provide comprehensive audit trail. Financial reconciliation workflows are essential for determining discrepancies, verifying the accuracy of statements and generating clear metrics for reporting. However, undertaking this manual can take up to two or three days and require extensive reconciliations. An automated software solution, on the other hand, can generate reconciliations in matter of seconds and provide with an audit trail of the reconciliations and postings.

Furthermore, automated software for the cash application process can simplify the dispute resolution processes and enable automated communications. Disputes can delay the cash application process, and manual processes can add another layer of complexity and delay any resolution. Automated software, on the other hand, can streamline and expedite dispute resolution by managing communications and generating reports.

Thus, leveraging an automated software solution can help finance executives to optimize cash flow, reduce working capital and increase their financial performance. Moreover, automation of the cash application process can improve the bottom line, significantly reducing capital costs, manual processing and employee expenses.

In conclusion, automation presents great opportunity for efficient financial operations, but it also brings about degree of risk. Finance executives must weigh the pros and cons of introducing an automated software solution for the cash application process and analyze its risks and benefits.