The Risk Of Not Automating Cash APplications
AUTOMATING CASH APPLICATIONS
Organizations understand the need to streamline the order to cash process, yet resist automation. Automation has unmatched potential to save businesses tremendous amounts of effort in accounts receivable-related activities such as cash application. Cash application automation systems reduce manual processing, eliminate data entry issues, and provide unified platform for greater finance visibility. Despite these benefits, many companies continue to avoid the software. This hesitation, however, is extremely costly and can lead to multitude of risks.
Accounts receivable teams remain vulnerable when manual methods are employed to process and apply cash. Manual data entry, account reconciliation, and document collection all have the potential to suffer from errors, incorrect information, and lost files. This can lead to significant manual processing inconsistencies, denied payments, and negative customer experience. Inadequate logging and filing can cause missing invoices, wrong amounts, duplicate payments, and slow transactions.
Cash applications automated software eliminates manual processes and manual data entry errors by utilizing rules-based recognition technology and optical character recognition. This vastly improves accuracy in matching payments as well as reduces auditing time, minimizing frauds while eliminating manual processing errors. This allows users to find, manage, and quickly apply cash and money. Also, with the use of an automated system, users can monitor accounts balance before and after entering cash, ensuring accuracy and correctly applied funds.
Moreover, automated systems can eliminate the need for human intervention when determining how to apply payments. Automation can create standardized workflows with reports alongside visibility into trends and patterns, allowing the finance team to better understand how payments were applied. This can significantly save an organization countless amount of time and money. Further, automating the process enables user to quickly identify discrepancies in documents and make necessary adjustments accordingly.
In addition, automating cash applications brings non-financial advantages. With self-service portals for customers, paperless processes, and automated document delivery, customers have more transparency around their accounts and the ability to access their documents quickly. This can lead to improved customer experience and long-term customer loyalty.
With numerous tangible benefits, the risks associated with not automating cash applications are simply too high. Executives should strongly consider switching to automated accounts receivable software to reduce costs, limit errors, and improve customer relations. The investment in the the software solution pays returns in the form of greater accuracy, improved controls over cash transactions, and better customer service.
