Delving Into The Risks Of Not Utilizing Automated Cash APplication Software
Automated Cash Application Software
As finance executive assessing their cash functioning processes, it is important to consider the risks inherent to not utilizing automated cash application Softwaresolutions. The complexities that arise in an Order to Cash process have placed manual methods of dealing with them far below industry standards. While automated cash application software may carry an initial capital expense tag, the money recovered through improved accuracy, greater speed, and increased cash flow makes it worthwhile investment.
Without such solutions, organizations are dealing with manual processes that generate high error rates, leading to duplicates, unpayable invoices, under or overpayments, delayed payments, or unsatisfactory customerservice. Moreover, the manual effort needed to parse through hundreds or thousands of documents adds pressure to the reconciliation process, significantly driving up labor costs. There is also the overhead to track disputes and attempt to recover the money tied up in logistics and paperwork.
In organizations that solely rely on manual methods for the cash application process, days can add up as different teams attempt to locate and apply payments to invoices. These lags can be detrimental to cash flow, as payments could remain unapplied for weeks or months, causing discounts to be missed out on. Furthermore, manual efforts opens the door for fraud and accounting errors, leading to additional costs and time needed to rectify. This lack of visibility also prevents organizations to understand the health of their cash flow situation, making forecasting difficult.
To tackle these issues, automated cash application solutions are designed to help streamline the reconciliation process with accuracy and speed. Cloud-based solutions offer many features such as automated invoice matching, OCR capabilities, and artificial intelligence-driven integrations. These technologies provide comprehensive overview of incoming payments, deductions, and credits, allowing for quicker reconciliations.
Another added benefit is the ability to customize the solutions around user requirements, enabling the business to set up rules and allocations for specific invoices to ensure that the process is quick and consistent. Through automation, companies can expect streamlined processes hampering the need for manual labor and costly mistakes. What’s more, these solutions offer companies the ability to track problems with non-payment, follow up with customers in cases of disputes, and determine if invoices need to be re-submitted.
In conclusion, the risks organizations take by forgoing the investments in automated cash application Softwaresolutions are considerable. At time when the need for streamlined cash flow process is essential, such solutions offer organizations both cost savings and improved efficiency. It is up to the finance executive to weigh the costs and benefits of these systems and make the decision that best suits their business needs.
