Optimizing Cash APplication Workflows: A Step-By-Step Guide
Cash Application In Accounts Receivable
When it comes to streamlining accounts receivable and optimizing cash application workflows, implementing comprehensive Order-To-Cash (OTC) Softwaresolution can provide powerful boost to any business. OTC software integrates several downstream C2C and P2P functions, such as capturing, verifying, and applying cash or invoices, creating unified platform designed to dramatically improve the accuracy and automate the time-consuming manual process. This comprehensive guide provides an overview of the key features available within OTC solution and the steps to optimize cash application operations.
Evaluating Order To Cash SolutionsThe large selection of OTC solutions can make selecting the right one daunting task. Most offerings provide the same core features, such as invoice processing, data capture, reconciliation, and payments, with the key differences lying in the user interface, associated libraries, and system integrations. Any solution chosen should be able to provide complete centralization of cash application operations and allow efficient tracking of all cash movements.
Once provider has been selected, the next step is to develop the methodology for cash application operations. The decision tree for this process requires the evaluation of customer data, the calculation of available cash, and the comparison of expected and actual payments to make sure all documents are consistent and data is accurate. With the utilization of OTC system, companies now have access to wide range of automated and customizable processes for each step.
Implementing The Solution The entry point for any OTC systems is automated data capture, verification, and alignment. Having preloaded customer documents such as invoices and payments data ready for validation provides the ideal setup for data input. Manual entry of data should generally be avoided as an inaccurate source of information may lead to later errors and misalignment.
Due to the large number of transactions involved in the cash application process, powerful data cleansing engine to remove semantic duplicates is critical. For example, an invoice sent to two different addresses or payment with slightly different language may be duplicate entry. By first validating the data, the OTC system can then use techniques like fuzzy matching, optical character recognition (OCR), and artificial intelligence (AI) to parse out the various records, allowing the cash application functions to work accurately.
Once the basic data capture process is complete, the accountant can leverage workflow functionality and customization to direct the process of managing cash application. By creating and assigning rules of reconciliation based on set criteria, such as customer and invoice data, the system can automatically process and cross-check documents against expected payment and apply it when the expected sum is reached. With the combination of validating accounts receivable documents and confirming expected payments, accounts can be validated faster and with fewer errors.
Using Automated Matching ModelsAnother core feature of OTC solution is the automated matching models that allow for easier, faster, and more accurate ledger updating. The application itself can calculate in real-time the status of accounts receivables and provide updates across their accounting system. By automating the matching process, the accountant can save time and energy that can be better directed to more critical business operations.
In addition, built-in, customizable structure for managing exceptions is available to deal with challenging situations. The accountant will receive notifications whenever payment fails to match the criteria and will be guided through the resolution process. This capability can also be integrated with system?s approval-flow process, so every transaction will follow defined system while also staying within the compliance guidelines of the company.
ConclusionThe implementation of Order To Cash software can be worthwhile endeavor for any business looking to streamline and automate its cash application operations. Leveraging automated data capture and verification models coupled with AI-driven matching and reconciliation allow users to save time and maximize accuracy. Through this comprehensive guide, the executives in charge of assessing new technologies can gain better understanding of the key features and functionalities of OTC solutions and the steps to optimize cash application operations.
