The Hidden Risk Of Not Automating Cash APplication


Cash application automation software can prove powerful asset to any business. This type of software enables firms to optimize their collections and receivables management processes, from order-to-cash (OTC) flow to in-depth analytics. However, failing to utilize these technologies can lead to host of hidden risks for your organization.

Not taking advantage of cash application automation introduces uncertainty into cash-flow and financial forecasts. Without automation, manual processes are prone to human error and delays, resulting in staff losing track of customer payments and applying credits to the wrong accounts. Additionally, absent automation, lack of timely payment insight will be more difficult to detect, leaving opportunities for bad debt to erode financial performance.

Cash application automation software elevates the visibility of accounts receivable data and streamlines the collections process. Completely automated order to cash (OTC) flow enables the business to rapidly clear customer invoices, reducing Days Sales Outstanding (DSO) and increasing the velocity of cash into the organization. Additionally, by automating payment cycle, organizations can identify and act on payment differences, including discrepancies, unfiled credits, and underpayments.

Advanced cash application automation software capabilities provide organizations with even greater control over their order-to-cash processes. Predictive analytics feature integrates customer data to estimate and forecast payments and when customers are likely to pay. Plus, predictive analytics can detect missed payments and cash inflows allowing organizations to take prompt action and instantly rectify issues.

Without automation, the allotted time and money spent on processing payments and the effort required to maintain accurate customer information can be prolonged and costly. The combination of automated cash application processes, predictive analytics and decision-making, data visualization tools, and artificial intelligence all renders mistakes virtually thing of the past.

In short, the failure to leverage advanced cash application automation increases the risk of missed invoices, bad debt, inconsistencies, and inaccurate accounting entries. By contrast, automation can help to streamline your operations, reduce labor requirements, and improve the overall accuracy and completeness of data. Financial executives are wise to thoroughly investigate all available options before making the decision to automate cash application.