Sequestering Risk: Forgoing Cash APplication Software
CASH APPLICATION PROCESS IN ACCOUNTS RECEIVABLE SOLUTION
Achieving optimum cash optimization and ensuring accuracy in complex and dynamic order-to-cash process is challenge. To optimize order-to-cash processes without cash application automation software is akin to attempting steeplechase with crevassed hurdles. Finance executives attempting to lower risks associated with no technology efficiencies, often opt for the implementation of cash application software.
Cash application software offers advantages to the cash application process that manual processes cannot. Firstly, automation with cash application software accelerates the reconciliation process. Automation conveniently removes the need for manual keying of invoices and receipts, allowing data to be scanned and reconciled thoroughly and accurately in single step. This significantly reduces keying errors and misapplications, translating to shorter receivables cycles and improved cash visibility.
The usage of cash application software also provides finance executives platform to monitor and optimise the cash apportionment procedure. With automatic interfaces to ERP systems, manual data retrieves, sorting, and screening are minimized. This allows for smoother integration of cash application processes and data.
In addition, finance executives benefit from the automated ability to audit, monitor and achieve consistency in cash application. As the automation need not depend on manual actions, the objective of maintaining accuracy for each payment allocation alignment is attained despite the perpetual influx of data.
In the absence of cash application software, risk of misreading of data, keying errors, or inadequate sorting and allocating of payments looms. This increases the time spent re-working invoice errors while eroding the initiative of achieving short receivables cycles. Inaccuracies and expenses associated with manual processes also readily accumulate. These will gradually lead to an increase in operational costs.
Furthermore, manual cash application processes may also inadvertently not provide traceability of the cash allocation process upon limited resources. Without automation, the required reduction in cash cycle times and exposure to the risks of manual errors is an exercise in futility and financial strain.
Finance executives must therefore remember the sequencing risk in forgoing cash application software. In constantly changing order-to-cash landscape, the implementation and usage of cash application software is acutely pertinent to create efficiencies and efficacies within the accounts receivable process.
