Using B2B Cash APplication Accuracy Software With Order To Cash Solutions: A Comprehensive Guide For Executives
B2B CASH APPLICATION ACCURACY SOFTWARE
Picture the scene: an Executive, under the cosh to achieve efficiency in the Order To Cash process, must decide upon solution to drive accurate cash application services. One potential solution that puts forward compelling use case is B2B Cash Application Accuracy Software. But how does it work? What are the management responsibilities? To what extent does it improve accuracy?
This comprehensive guide serves to answer these questions, providing Executive decision-makers with the insight necessary to confidently evaluate B2B Cash Application Accuracy Software and its implementation in the Order To Cash process. By the end of this guide, the reader should have an understanding of the processes and tasks necessary for optimal performance as well as the solutions available to benefit the bottom line.
A Brief Introduction to Order To Cash
The Order To Cash (OTC) process begins when customer places an order and finishes when the company receives its payment. This process can involve various departments (Sales, Credit, Billing, Accounts Receivable) and activities (order verification, credit checks, invoicing, payments collection, etc.). It involves communication between the customers, vendors and bank providers.
The OTC process is key both to sales departments, as it ensures customer orders are securely processed, and to finance departments, as it guarantees that customers are correctly billed and payment is correctly collected. But even when order information is correctly captured and customers are billed correctly, there is still the risk that payments can be incorrectly applied to the customer accounts, making achieving positive cash flow almost impossible and introducing an element of risk in the process. Cash application accuracy is where B2B Cash Application Accuracy Software comes in.
Understanding B2B Cash Application Accuracy Software
B2B Cash Application Accuracy Software is designed to automate various elements of cash application accuracy, driving efficiency and reducing the risk of payments being incorrectly applied to customer accounts. The primary benefit of the software is in its ability to quickly, accurately, and consistently identify customer accounts using simple matching algorithms, amending and validating customer information during the matching process.
It helps to improve cash forecasting by providing improved payment visibility, faster payment processing, and more accurate financial statements. For the Executive, the solution is designed to improve decision-making capabilities, create process efficiency and rise up cash flows.
The Process of Implementing B2B Cash Application Accuracy Software
Step One: System Setup
The first step in the process of implementing Cash Application Accuracy Software should involve defining the different types of payments that need to be managed, such as checks, wire transactions, credit cards, and bank transfers. The information should be obtained from the bank providers and other payment vendors.
The working capital position of each customer should also be identified. This can be done via credit check with the customers? creditworthiness being taken into consideration, and with consideration toward the companies payment policies and any specific payment instructions.
Step Two: Automate the Cash Cycle
This involves being able to analyze disparate data points across multiple payment sources, such as ERP systems, customers? accounts, vendors, and bank information. The software should be able to collate all the relevant payment information from different sources and identify discrepancies within the data.
Step Three: Data Matching
Credit and debit information from customers and vendors should then be compared, to ensure that payments are accurately and uniquely attributed to the receiving customer or vendor. Furthermore, it is important to assess the data and identify any anomalies or unusual patterns that could indicate fraudulent or incorrect payment activity.
Step Four: Reconciliation
The software should enable customers and vendors to reconcile their accounts and quickly identify payments that have been applied incorrectly. This is crucial in helping minimize the risk of misattributed payments and improving the accuracy of cash-flows.
Step Five: Quality Assurance
The software should perform rigorous quality checks on all data and payments, including the physical processing of payments and the underlying premise that each payment is attributed to an appropriate customer or vendor account. Furthermore, it ishould be designed to identify errors of omission or commission that may be introduced during the processing of payments.
Step Six: Automate Payment Reconciliation
The software should also be able to automate payment reconciliation, thereby reducing the time needed to identify and rectify any errors. it ishould also be able to generate payment reports or other information for use in the OTC process. This can then be used to facilitate decision-making, quickly and accurately identify potential issues, and ensure that the process is conducted with minimal effort and maximum efficiency.
The Benefits of B2B Cash Application Accuracy Software
B2B Cash Application Accuracy Software holds many benefits for the cash cycle of an organization. It aids in improving visibility and accelerating payment processing, enabling businesses to take control of their cash-flow and promptly identify billing errors.
The software also allows for data to be retained, ensuring that payment information is accurately reflected on the organizations books. This helps to eliminate any manual errors and inaccuracies related to the manual booking of payments. It reduces the risks associated with incorrect payments and boosts the accuracy of financial statements.
Furthermore, for the Executive, it provides the opportunity to quickly and easily identify areas of potential misapplication of payments and fraud. Additionally, it can help to ensure compliance with standards within the finance department, such as FASB and GAAP, as it istreamlines the process of verifying, reconciling, and validating payments.
Conclusion
B2B Cash Application Accuracy Software can be viable and beneficial solution in the Order To Cash process. It can quickly and accurately identify customer accounts and attribute payments correctly, thus improving cash forecasting, streamlining the process of payment reconciliation, and reducing the risk of misapplication of payments.
For the Executive, the software provides the insight necessary to confidently manage the OTC process, helping to achieve efficiency, reduce manual errors, and maximize accuracy. Therefore, an organization looking to take its OTC process to the next level should seriously consider the implementation of B2B Cash Application Accuracy Software.
