Cash Application Automation Software for a Better Payments

ABCAdda | Updated Jun 13, 2022

The Cash application automation software is used at the final step in the cash cycle process; This is when a business applies payment to a customer’s unpaid balance. Some might say that this is the most important step because payment processing signals the end of a successful sale.

The order-to-cash process begins when a customer places an “order” (or commits to buying a product or service) and then moves on to credit management – when they request a line of credit instead of paying in full.

Notes move to accounts receivable processes – when it’s time to pay for purchases. The use of cash occurs when the income is completed – it is recognized revenue (something sold) and recognized revenue (recorded in the ledger that paid it).

What is a cash application automation, and How does it work?

The cash application automation is a part of the claims process, where payments are matched against the correct invoice, and the money is issued for use in other parts of the business.

When applying payments for cash, incoming automated payments are compared with correct information about transfers, invoices and customer accounts. Accounts receivable processes (AR) teams must coordinate this within their enterprise resource planning (ERP) system.

It sounds simple and obvious, but there are many challenges associated with using cash that can make it difficult for AR professionals. This includes working automated separate from their transfers, working with different types of transfer formats, and short-lived processing payments, to name a few.

The specifics for the automation of the cash application process vary from company to company. This is partly because companies have differences in customer volume, invoice volume, invoice delivery, and accepted payment methods.

This cash application block diagram shows how fast the process can be by introducing more variables, such as Additional payment methods and transfer types can be tricky.

Your business can accept automated payments in any of the following combinations:

  • Bank transfer
  • OH
  • Credit and Debit Card
  • check and bank lockbox
  • Other electronic transfers such as Corporate Trade Exchange (CTX)

Meanwhile, the associated money transfer board (which tells your team what the payment was for) might arrive in the form of:

  • Email
  • image or PDF
  • excel worksheet
  • The web portal (as bill payment system)
  • Electronic Data Exchange (EDI)

With more variables, you are more likely to run into problems.

What makes a cash application challenge?

Requesting cash flows involves providing invoices, receipts, and money transfers from various sources such as email, EDI, bank files, key box files, etc., in multiple formats, in multiple languages, and multiple currencies.

Some of the biggest challenges associated with the cash application process include:

  • Collecting data from emails, documents, bank files, and supplier portals is very inconvenient
  • Comparing invoices to cash receipt applications is often complex and time-consuming, involving several rules
  • Entering and publishing data across multiple ERP systems is very intrusive and error-prone

With so many payment methods and remittance information available in various methods and formats – often in unstructured documents such as PDF, Word, or image files – capturing this information is a major challenge when applying payments for cash flows.

In addition, some transfer details may be incomplete during reconciliation, complicating the process and requiring contact with the customer for clarification. More detailed comparisons require references to other customer information (e.g. orders or internal customer orders, including invoices).

In addition, customer history can provide important information. They all require human intervention in a critical effort to match payments and fees properly, and they demand cash.

Cash application automation software is the solution.

By now, you know the drawbacks of the manual cash allocation process, but you may be wondering – what is the alternative?

What is cash application Automation software?

Cash application automation software is the process of reconciling all incoming payments with appropriate invoices/client accounts and wire transfers. Without this comparison and publication of money in ERP, funds are not available for business purposes.

How does cash application automation work?

Cash application automation refers to the use of software to facilitate the process of matching invoices and incoming payments with unpaid receivables. Cutting-edge POS automation solutions are equipped with machine learning, robotic process cash application RPA, optical character recognition (OCR), and artificial intelligence (AI).

Do you remember all the referral sources? Cash application RPA automation software searches through all of these file types, collects them and matches them against the right invoices and customer accounts.

Why does the cash application process need to be automated?

Due to the time-consuming and error-prone nature of manually using cash is one of the steps in the ordering to payment process that can benefit significantly from automation. The complex process of requesting a cash allocation process can undermine free cash flow when a company cannot make payments as quickly as possible.

On the bright side, for businesses and organizations that accept payments, technology has given businesses an edge in automation, making it easier to compare incoming payments from customers.

Cash application automation can digitally capture payments from multiple sources, compare them to appropriate invoices, and send information to the sales ledger and summaries to the general ledger. All of this is done without the need for a single person or team of people.

Here are the three main benefits of an auto cash application.

  • Faster automation of the cash application
  • Smarter automated cash handling
  • Scalable auto cash application

What are the steps in the cash application process?

Step 1: You will receive payment and transfer: You usually receive a translation consultation when you receive a payment from a client. This way, you can find out which invoice the payment applies to.

Checks can include information about the transfer on a line of records or on accompanying documents (usually just below the check).

However, electronic payments are not that simple. For ACH, EFT, bank transfer and virtual cards, money transfer boards are provided separately in several possible formats.

In some cases – whether a check or an electronic payment – can make payment without the associated wire transfer.

No automatic cash app

Your business is likely to accept a combination of different payment methods. With a manual cash receipt application, your accounts receivable specialist (AR) has to retrieve payment and remittance information from each source. As your customer base grows, it becomes increasingly difficult to retain them.

Transfers can be in the post, email, excel, electronic data interchange (EDI) or bill payment portal (AP). The latter option has grown in popularity recently, with big companies like Walmart and Amazon developing their online money transfer sharing portals.

If a payment comes in without bank transfer information and you can’t auto-match it to an invoice by dollar amount, you may need to contact the customer for clarification.

With auto Cash application automation software:

Cash app custom card ideas software can pull transfers from various sources, so you don’t have to collect them yourself. The platform can also provide data points for invoice numbers, dates and dollar amounts for easier matching. Since there is no standard format for transfer tips, this is very useful.

Wire transfers are also called illegible – we are talking about blurry images, missing marks and illegible handwriting. Cash application automation software can analyze, normalize, and collate payment and remittance data.

Advanced AI software equipped with artificial intelligence (AI) can remember these odd formatting issues and fix them for future payments. If you receive a payment without a transfer tip but have been paid by that customer previously, the AI Cash in-app software can match it to the correct account based on data such as the number at the bottom of the check.

Step 2: Adjust the payment with the appropriate invoice: Even when the payment arrives by wire transfer attached, it is still difficult to auto-match the right payment to the right invoice. For example, you may receive a single payment that includes multiple charges – in some cases, more than 40 to 50.

You may also find that the payment amount doesn’t exactly auto-match a single bill. This usually happens because the customer is underpaid due to a discount or a problem with their order.

When payments arrive without a translation consultation, dealing with partial payments and payments that include multiple invoices becomes more difficult.

No automatic cash application

If a customer pays without a clear explanation, you need to understand why by asking your team or contacting the customer directly. This will likely involve a series of emails, direct messages, and phone calls. The same applies to payments made on multiple invoices. If you can’t easily see which payment applies to which bill, you need to set a research limit and work!

Since this pay discrepancy is common, your team could spend hours searching for answers.

With the auto cash app

With automation software, you can compare large amounts of payments and open invoices – without human intervention. Cash app custom card ideas software has grown significantly in recent years, allowing for a match rate of over 90%.

In cases where one-on-one matches are not possible (such as paying multiple bills), the AI software can guess which bill is being paid. He will work through possible combinations of invoices considering the credits available to the customer.

And if you’re still not sure how to implement payments, the easiest way to ask is with software that offers collaboration across platforms. This allows you to leave comments directly on invoices for your colleagues or customers to respond to without interrupting your workflow. No need to make calls or send emails.

Step 3: Post payments in your ERP: The last mile of the cash application posts a payment in your ERP, signaling that the accounts receivable record is no longer open.

No automatic cash application

This can be a challenge without a cash application solution that integrates directly with your existing system.

Using cash manually often involves switching between multiple Excel spreadsheets and your ERP, which is not the most efficient way to work. By having your team update all ERP records manually, you also introduce more opportunities for error.

With the auto cash app

The best solution for cash app auto payments applications is tightly integrated with your ERP. This allows you to send payments automatically as soon as they match. Integration with your ERP also helps with the more difficult match types we described earlier. The software can make assumptions based on data such as current open invoices, payment history, and available credit.

And the best? Integration with your ERP allows you to complete the cash app checkmark process in one place. No more switching between countless open windows.

What are the benefits of an automated cash application process?

Here are the five most common advantages of cash app auto payments over manual payments:

What are the benefits of an automated cash application process? 1.Faster payment, 2.Save time and money, 3.Fewer mistakes, 4.Improved scalability, 5.Advanced financial reporting capabilities

  1. Faster payment: Instead of requiring an agent to review all transfer details and match them to the correct invoice, you can let the accounts receivable software do the work. Speeding up the matching invoices process results in faster cash availability and improves your company’s financial position.
  2. Save time and money: How much time, and money can businesses save with automated cash handling software? Turns out quite a lot. Based on our experience, automated cash applications can increase efficiency by up to 75% and reduce AR costs by up to 50%. Instead of giving your employees tedious tasks, you can give them time back to focus on more strategic projects.
  3. Fewer mistakes: The beauty of artificial intelligence is that the more you use it, the smarter it gets. With AI-enabled POS software, your match rate will increase the longer you use the platform. More automatic cash application matches and fewer errors help improve customer experience. Vendors who have dabbled in automation have had a ton of experience: A study by PYMNTS.com found that 75% of companies say automated AR capabilities help them deliver great customer experiences.
  4. Improved scalability: Even if your current business can handle manual cash handling, you limit your future potential. More sales mean more invoices, which means hiring more staff if your processes don’t progress. This can be expensive.

And what if your customer is interested in a new form of payment that your process doesn’t currently support? There are over 200 alternative payment methods worldwide, so it’s only a matter of time before that happens. In this case, it will be much easier to make money from the software.

  • 5. Advanced financial reporting capabilities: When funds are unused for long periods, it becomes difficult for senior financial managers to get an accurate picture of accounts receivable status.

Automation software makes it easy to track which payments are still due and combine all relevant data with the push of a button. The tools equipped with the dashboard help you monitor potential trends at a glance.

Manual versus automatic cash app

There are two ways that the money application process can be done – manually or automatically. In a manual process, a Cash Application Specialist or Account Receivable (AR) clerk makes each payment and transfer, compares it to the related invoice, and checks the customer’s name and number printed on the invoice. This information is then published in the company’s ERP and repeated for the next customer.

The manual approach is time-consuming and not easily scalable. There is also room for human error.

Cash app automation is becoming more and more common so eliminate manuals. Automating cash app receipts helps reduce processing time and significantly reduces the chance of human error. The more complex the application process for an organization, the more pressing the need for automation.

10 Cash app tips and tricks to automate your cash app

Let’s find out what are the key focal points every A/R leader should consider when automating the cash request process to get cash app tips and tricks:

  1. Receive remittances from various sources
  2. Accurate check records to reduce the main entry fee
  3. Automatic transfer and payment connection for electronic payment
  4. Identify customers for incoming payments
  5. Processing and mapping of complex parent-child relationships
  6. Open A/R Invoice Match and Exception Handling
  7. Identification of payment errors and application of the reason code
  8. Publish cash directly to your ERP
  9. AI and machine learning to contextual intelligence
  10. Produce performance indicators and reports

How to get a receipt from the cash app

You can get a quick receipt cash app for web payment once logged in to your Cash App account. First click on the Activity tab, select the payment you need for a web receipt and then click on the three-dot option at the top right corner of the Cash app home screen.

Finally, click web receipts for a quick receipt cash app or view and download web receipts for specific payment activities. The app also allows you to view all receipts or transaction history when making payments.

Steps to get a web-based payment from a cash app and download monthly reports using a computer

Follow the steps below to get an online payment receipt with a cash application.

  • Open a web browser (preferably Google Chrome)
  • Visit the official website of the Cash App.
  • Log in to your cash account with your credentials.
  • Tap Bank Statement in the menu bar.
  • Now click on the download option to download in CSV format.
  • Finally, you can save the file with any place name you want.

Monthly reports are available within the first five business days after the start of the following month. For example, your monthly cash statement for March is available within April’s first five business days.

However, that doesn’t mean you can’t check your transaction activity before or after. Instead, you can review your transactions at any time and, depending on your choice, receive web receipts for your cash payments at any time.

Not sure if you need a cash app solution and eliminate manuals?

If any of the pains mentioned above in manually allocating cash resonate with you, it may be time to rethink your process.

There are several signs that you may need help, including difficulty meeting growing e-payment requests, a stressed-out cash app automation team, and a spate of customer complaints.

By automating the cash application process, you can eliminate these hassles and remove any bottlenecks preventing your business from reaching its full potential.

Conclusion:
Automate the cash application process For accounts receivable professionals, the cash app checkmark often comes with headaches, frustration, and discouragement. A large part of this can be attributed to the fact that many businesses still process the use of cash manually, which is an outdated method. Billtrust offers accounts receivable solutions that can be scalable to fit your business, including cash app automation and more.