The Impact Of Unmanaged Cash APplication


Accounts receivable automation and cash application are two of the most important processes in any order to cash software. When left unmanaged, they can cause crippling delays in payment processing, customer service issues, bad debt, inaccurate data and significant decrease in financial efficiency and risk. Organisations looking for an order to cash software must assess the potential impact of not employing an automated cash application system.

The Premise

A manual system of accounts receivable automation and cash application can lead to several complex issues that have ripple effect through the organisation. Accurate record keeping, customer service and financial efficiency are impacted when manual system of cash application is employed. Here’s list of the key issues:

Poor Data Quality Accuracy

Manually applying cash and manually keying in every transaction into an Accounts Receivable system requires significant data entry time, and often results in considerable inaccuracies and validation issues. Inefficient allocation processes and discrepancies between payments, invoices, refund and bill of lading data sets can have disastrous implications for customers and the organisation.

Process Inefficiencies Delays

To manually apply cash to an invoice is long, cumbersome process that typically takes significantly longer than when automated. This delays customer payments and increases the tax risk in order to manage the working capital position of the organisation. Furthermore, having too much cash on hand results in inadequate cash flow.

Customer Service Credit Risk

Late payment notifications, invoice disputes, overpayments and unpaid invoices are all customer service issues that can arise when cash application isn’t automated. Credit and collections processes take more time when cash application is handled manually, leading to higher risk of bad debt and lower customer satisfaction.

Risk Mitigation

Organisations that consider an automated cash application system can improve the accuracy and speed of their cash application process, leading to an efficient flow of funds and accurate records. cash application system allows for flexible payment allocations and improved data accuracy, as well as eliminating potential human errors and delays. Furthermore, automation of Cash Application helps organisations increase collections visibility and optimise their working capital position.


An automated cash application system is the best way to gain visibility, accuracy and control of your Accounts Receivable process, while at the same time enabling organisations to improve customer service, reduce their bad debt and keep healthier cash flow. Automating the cash application process is essential for companies who focus on delivering outstanding customer service, obtaining accurate financial data and ultimately, have better return on investment.