The Hidden Financial Risk Of Skipping Cash APplication Automation
BENEFITS OF CASH APPLICATION AUTOMATION
For C-Suite finance executives who are responsible for assessing operational efficiencies in their organizations, the failure to take advantage of cash application automation software presents significant financial risk. The slow and manual processes of manual, paper-based cash applications can lead to all sorts of problems, notably missed payments or an unmanageable workload for invoicing and collections personnel. These manual processes can ultimately lead to increased risk of errors, higher labor costs, slower cash flow, and an inefficient use of staff resources.
Without automated cash application software, invoice processing and collections can be highly manual, error-prone task. Invoices must sometimes be compared to payment information manually, which leaves room for human errors. Manual processes also require staff member to understand the different payment options, such as check, wire transfer, or Electronic Funds Transfer (EFT). slow cash application process can lead to complications, such as the receipt of late payments, duplicate payments, partial payments, or lost payments. In some cases, duplicate payments can be especially difficult to identify and refund, resulting in costly error.
Manual cash applications also take more time to process, halting any potential gains in order to cash cycle time?the speed of moving an order from invoice to payment. Slower cycle times can impact cashflow and put stress on the entire organization. This may also result in lost business, missed opportunities, or both. More importantly, these processes waste staff resources; personnel could be doing much more productive tasks or working on strategic initiatives instead.
Fortunately, cash application automation is available to meet the demands of organizations that have grown far beyond the capabilities of manual systems. Making use of such automated order to cash solutions reduces the possibility of mistakes made by staff, as well as the potential for lost payments. Automated best practices also allow organizations to fix their order to cash process to move invoices faster and make sure payments are collected in timely manner, leading to significant operational benefits for organizations.
In summary, finance executives need to consider the hidden financial risks associated with manual, paper-based cash applications. Automated software solutions can simplify the cash application process, resulting in greater accuracy, faster cycle times, and improved cashflow. Ultimately, investments in automated cash application software can make all the difference in protecting and strengthening an organizations bottom line.
