Automating the Cash Application Process for Real-time Visibility and Improved Cash Management Performance

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Cash application is one of the most time-consuming parts of the AR process. This is especially true at a time when companies need to speed up collections and free up trapped cash. It’s so much manual transformation—it’s labor-intensive, time-intensive, and not easily scalable.

Additionally, there is much room for human error. It’s one of the major roadblocks to cash flow performance. As a company grows, the lack of standardization and the different kinds of payments to match up can make this task even more difficult and painful. However, automation offers several benefits that can improve cash management performance.

There is no standardization, as remittance data is either not available or not uniformly structured. And, there’s such a variety of payment types to reconcile. You’re at the mercy of the kind of banking relationship you have, your ERP, and your process for customers providing their information. As you mature, the volume compounds, and this becomes quite painful.

Benefits of Automation

Automation is faster, smarter, and more scalable. It benefits accounting, finance, and ultimately your customers. It helps sales get their commissions without clawbacks from collections not coming through efficiently. You have more real-time visibility into A/R, so you stay up-to-date and can act on better business intelligence faster.

By automating cash application, tedious manual processes are taken out of the equation. This frees up your AR staff to do more important things than just data entry. It greatly reduces the errors that frustrate customers and erode their confidence in your company. Your customers will enjoy a wider variety of payment options, and when their accounts are marked paid faster, their credit is again available, and they can make more purchases.

Your free cash flow improves with cash app automation, as revenue is finalized faster and you have clear and immediate visibility into your accounts receivable.

What You Need to Consider

You’ll experience the greatest benefit from your implementation if you first explore your process, policy, data, and people and make sure they’re aligned. Always look holistically at your entire order-to-cash cycle, end-to-end, and talk about process, policy, compliance, controls, and data attributes.

If you’re clear about the pain points you want to solve, then you can decide which system will work best. From there, you can build a structured quantitative and qualitative business case for purchasing the implementation, defining the benefits and expected outcomes.

By automating your cash application process and overall Accounts Receivable (AR) management, you can eliminate the time-consuming and expensive manual procedures. You no longer need to be concerned about the frequent errors that create frustration among your team and, most importantly, your customers. With greater visibility and increased accuracy, automation helps to eliminate the growing pains that often arise as your business scales.The advantages of automation extend beyond your AR team to benefit your sales and leadership teams. Every member of your company has a stake in your cash flow performance, making automation crucial for achieving success.

When executed thoughtfully, implementing an automated AR solution like Tesorio helps unlock revenue faster and improve cash management, and there’s no downside to that.

If you’re ready to eliminate the roadblocks to improving cash flow performance, request a Tesorio Demo today.