Automating The Cash APplication Process To Accelerate Order To Cash Cycle
Automated Cash Application Process
The cash application process is the key to transforming order to cash operations and increasing cash flow efficiency. By leveraging automated cash application technology, companies can improve their management of receivables and increase their visibility of global collections activity. This article outlines step-by-step guide to setting up an automated cash application process for your order to cash operations.
Overview of Automated Cash Application
An automated cash application system can streamline order to cash processing by automatically applying all types of customer payments?from checks to wire transfers to credit card transfers?directly to invoices and orders. The automated process also verifies amount, due date and other critical details associated with each payment, thereby saving time and preventing errors that lead to costly audits and write-offs.
Using this type of solution?which is sometimes referred to as lockbox automation system or automated cash application system?eliminates the manual effort associated with the cash application process and allows companies to manage receivables more efficiently. It also eliminates errors related to manually entering payments and reduces any time discrepancies between payment processing and invoice status updates.
Step-by-Step Guide to Automated Cash Application
1. Analyze Current Processes and Identify Pain Points
Before you begin implementing an automated cash application process, you must assess your current order to cash processes and identifying any areas where there is room to accelerate operations. Knowing this information will also help you determine which automated cash application solution is the best fit for your organization.
2. Setup Database
The next step is to create structured database of your customers, invoices, orders, and other critical information. This database should be integrated with your current systems and applications, so you can easily move data between them.
3. Integrate Cash Application Software with Your Systems
At this point, you?ll need to integrate the automated cash application system into your existing systems. This will enable the application to start collecting and processing payments from customers and automatically apply them to the corresponding orders and invoices.
4. Train Payment Processing Staff
You?ll also need to train payment processing staff on how to use the new system. This training should include instruction on the functions and features of the solution, and the best practices for ensuring the system?s success.
5. Test Your Solution
Once your automated cash application system is in place and staff has been trained, you?ll need to thoroughly test the system to ensure it is operating correctly. This involves running test transactions, verifying data accuracy, and ensuring compliance with internal and external regulations.
6. Deploy Solution
Now you are ready to begin using the automated cash application system for real-world transactions. As you deploy the system, you?ll need to closely monitor payment activity and reset parameters to adapt to changing business needs.
Conclusion
The automated cash application process is key component of any successful order to cash system. By deploying an automated system for cash application, companies can reduce errors, eliminate manual data entry, and improve visibility into their global collections activity. Moreover, an automated system can free up staff to focus on higher-value tasks. By following the six-step guide outlined in this article, companies can quickly and easily set up an automated cash application system that will accelerate their order to cash process.
