Cash Application Automation Software

What’s the most important step in the order to cash cycle? Not counting the sales reps, most people will say the last step–cash application. Because until incoming payments are applied, the cash is not available for use. It’s more like an IOU to your business. 

Cash application is the process of accurately matching incoming cash transactions, such as payments and receipts, and reconciling them with outstanding invoices. If done manually, cash application is the very definition of inefficiency. It takes a lot of time and is prone to errors, which then means more time is wasted with efforts to correct the mistakes. 

Accounts receivable teams that use NetSuite or other accounting systems find that they still have to complete many aspects of the cash application process themselves. Most accounting systems/ERPs aren't designed to automatically handle all the complexities that arise with modern B2B payments.

That’s why Payference is such a welcome tool to accounts receivable teams. It helps speed up the cash application step and streamlines overall cash management, increasing efficiency across all the previous steps in the cycle.

In this blog post, we’ll go over the benefits of integrating Payference with your accounting system to help automate cash application and suggest some best practices to help you get the most out of the platform. But before diving into the advantages, let’s see why automating cash application is more important than ever.

The Complexities of Cash Application

Although accounts receivable automation and the increase of electronic payment methods have streamlined many AR processes, these advancements have also added a layer of complexity when it comes to the cash application process. For businesses that accept a range of payment types–checks, e-checks, wire transfers, lockbox service, digital wallets, credit cards and ACH transfers–it can be challenging to wrangle all the payments and compare them to orders that have come in through multiple channels. 

Then there are more issues with invoice matching. Some customers may have decided to make partial payments against one invoice at different times of the month, while others prefer that you access their AP portal for payments. Sometimes there will be one invoice for several orders, and many electronic payments will show up with no remittance advice at all. Many AR professionals still spend more time than necessary with invoice matching and other steps of the cash application process.

Of course businesses that want to stay competitive need to offer their customers appealing options and conveniences, but they also have come to realize that without automating cash application, efficient cash management is hindered. There are far too many open invoices, payment discrepancies that have to be resolved and cash that sits unapplied for too long. 

What is Cash Application Automation software?

Cash application automation software removes the need for manual matching of incoming payments with open invoices. Payference leverages advanced algorithms and machine learning to automate the process for faster, more accurate invoice matching. The result is a significant time savings and reduced errors -- and the integration is seamless. Most of our customers are up and running in a matter of hours.

Leveraging cash application automation software, like Payference, provides substantial benefits:

Increased efficiency–Because Payference removes labor-intensive tasks such as data input, invoice matching and account reconciliation and replaces them with automation, it drastically decreases the time and resources needed for cash application. With streamlined cash application, AR teams have more time and energy for more valuable tasks.

Increased accuracy–Like any process that relies on human effort, manual cash application is prone to errors which leads to discrepancies and delayed financial reporting. Automated cash application minimizes human error. By leveraging intelligent algorithms that are able to precisely match payments with invoices, Payference's cash application tool improves accuracy and ensures reliable account reconciliation. 

Faster cash application–When cash application is completed manually, there are often delays and bottlenecks caused by missing information, errors or any number of the pitfalls mentioned previously. This inefficiency results in slower cash turnaround times. Automated cash application removes the obstacles and ensures that payments are applied quickly to open invoices. This efficiency results in improved cash flow and a better customer experience.

Enhanced visibility–Payference gives you real-time visibility into transactions which enables you to more accurately track cash inflows. With this kind of monitoring capability at your fingertips, your finance team is equipped to make informed decisions and have the confidence to take action on items to optimize cash management.

What Features Provide the Benefits?

Payference was built especially to fill in the gaps in NetSuite and other accounting systems like Sage Intacct, Epicor, and QuickBooks and enhance their functionality. That’s one reason why it can be integrated with such ease. 

Another is because it leverages artificial intelligence (AI) and machine learning (ML) to drive these features:

Intelligent Payment Matching

Using advanced AI algorithms, Payference is able to accurately match incoming payments with the correct outstanding invoices–even in situations when a customer has remitted a partial payment or a payment to cover multiple invoices. This kind of precise, automated payment application reduces the manual task load and improves accuracy.

Automated Payment Reconciliation

By comparing bank statements and payment data with your accounting system, Payference is able to automate reconciliation of accounts. Once again, this feature reduces manual data entry and provides a more accurate record.

Real-time Reporting and Analytics

With real-time reporting and analytics displayed on dashboards that are easy to read and intuitive, finance teams will gain actionable insights into cash flow, collections and other key metrics. Strategic planning and decision making are guided by the most up-to-date data.

Customer Self-Service Portal

Today’s customer is delighted with being able to access their account when it’s convenient for them. Payference allows customers to log in, view their invoices, make online payments through a variety of payment types and check payment history without assistance from your team. This improves their experience, encourages on time payments and frees your team to focus on other projects.

Best Practices Before Implementing Cash application automation software

You want to get the most out of your cash application automation software. Your results will be much better if you take some time to plan and prepare for the implementation. Here are some best practices to consider:

1. Data clean up. Make sure that the customer and invoice data in your accounting system is clean and accurate. Do this by updating and maintaining customer records on a regulate basis. The integration uses the data stored in your system, so the more accurate it is, the more accurate your cash application process will be.
   
   
2. Integration with payment gateways. It’s a good idea to integrate your accounting system with payment gateways for automating remittance information retrieval. This is another way to eliminate manual data input and accelerate the cash application process. 
   
   
3. System Maintenance. Completing regular system maintenance will ensure optimal performance of Payference’s cash application functionality. This includes keeping your system up to date with the newest releases and patches to take advantage of recently added features and improvements. 
   
   
4. Training and Support. Before implementing the integration make sure that you’ve provided ample training to your team as to how to effectively use all of the integration’s capabilities. 

The Payference solution does more than simply enhance the cash application process. It revolutionizes cash management by improving forecasting accuracy, providing real-time data, accelerating collections, reducing errors and eliminating manual tasks. Want to see Payference in action? It’s easy to set up a short, no pressure demo.