Utilizing Automated Cash APplication Systems: A Comprehensive Guide For C-Suite Executives


Automation has been integral in various central business processes, and order to cash is no different. For C-Suite executives evaluating automated cash application systems, this comprehensive guide offers resources for glean an in-depth understanding of how to increase operational efficiency and customer experience.

First, an automated cash application system is technology software that streamlines the daily process for allocating payments to customer accounts. This includes, but is not limited to, incoming payments from customers in various forms including credit cards and checks. Specifically, this payment reconciliation process offers numerous benefits, including:

– Increased Cash Flow: Automated cash application offers quicker customer payment reconciliation, resulting in improved cash flow as customers? payments will have been credited sooner.

– Automation: Manual process of cash application is time consuming, repetitive, and inaccurate. Automated cash application is automated, which eliminates the requirement of manual reconciliation.

– Improved Customer Experience: Customer satisfaction is vital to staying competitive in any market. Automated cash application systems make it easier for customers to pay their invoices, resulting in an improved customer experience.

– Cost Reduction: Automated cash application systems can offer reduced price collection and reconciliation costs since automated applications are less expensive and time consuming than manual efforts.

To succeed in implementing an automated cash application system, it is essential to fully understand the process on step-by-step basis. This includes:

Step One: Data/Document Processing. Automated cash application systems begin with the processing of customer data (such as customer name and invoice numbers) and documents (invoice and payment information). This involves capturing customer information from several sources including emails and vendor portals, as well as the consolidation of both data elements in the same location for easy application and posting.

Step Two: Matching. Once the data and documents have been processed and extracted, the automated system verifies customer data such as customer identity and account numbers. During this step, customer incoming payments are also identified and matched with applicable invoices.

Step Three: Allocation. Following data/document processing and matching, payments are then allocated to the corresponding invoices. This step helps to ensure customer payments are applied properly and promptly.

Step Four: Rejects/Exceptions. At this point, the automated system identifies any exceptions, such as duplicate payments or incorrect invoice numbers. The system also provides the opportunity to review any rejected items and resolve issues promptly.

Step Five: Payment Posting. Upon successful reconciliation, automated cash application systems will post respective payments and invoices to customer accounts.

Step Six: Reporting. The system should provide accurate and intuitive reporting features, such as an open items report and account history report. This allows C-Suite executives to easily monitor account balances, payment activity and payment trends.

It is important to remember that automated cash application systems have the potential to greatly improve the order to cash process, but only if the system is designed properly, as this will help ensure accurate, efficient and secure transaction processing. When making decision about which automated cash application system to use, consider factors such as the scalability, reliability, user-friendliness and cost structures.

In conclusion, utilizing automated cash application systems can help C-Suite executives reduce costs and increase accuracy, resulting in improved customer satisfaction, accurate reconciliation, and improved cash flow. Utilizing the definitive step-by-step guide, C-Suite executives can gain an in-depth understanding of how to identify and acquire an automated cash application system to meet their unique requirements.