In today’s fast-paced environment, it is becoming more evident that adding software to automate business processes is fundamental to the success of an organization. According to a 2022 report from Imaginovation Insider, 66% of companies have added automation to their processes in one or more business functions. With automation becoming increasingly popular, using manual processes puts your company at risk of falling behind the competition.
An excellent place to start your digital transformation is with tedious financial operations. If your finance team is manually applying accounts receivable (AR) payments to the corresponding customer invoices, an automatic AR cash application solution is the perfect fit for your organization.
What does an AR Cash Application solution do?
An advanced AR Cash Application solution will process lockbox files and other types of customer payment files, seamlessly matching payments to the correct customer invoice, account, and remittance information. If your business receives large quantities of high-volume cash receipts the process of manually matching the files to customer invoices is expensive, inefficient, error-prone, and an overall security risk.
10 ways that AR Cash Application Automation can benefit your business:
In a report from PYMNTS.com, 74% of accounting teams reported that problems arose when manually processing invoice information. On the contrary, 60% of businesses that automated invoice and expense management reported a decrease in misplaced invoice cases. With these statistics in mind, let’s take a deeper dive into the advantages of automating your AR Cash Application process:
1. Fewer Mistakes
Manually matching your accounts receivable payments to the correct invoice can lead to time-consuming errors and customer dissatisfaction. Utilizing automation instead prevents some of the common inaccuracies such as decoupled remittances, incorrect discount terms, and missing characters from invoices.
2. Time Savings
Advanced Cash Application solutions will require zero additional data entry to match payments, significantly increasing your accounting team’s efficiency. According to a recent report from PYMNTS.com, among the companies that have deployed AR automation 87% reported faster processing speeds and 79% said it improved the AR team’s efficiency.
3. Improve Cash Flow
Giving your accounting team the ability to match payments more efficiently will increase your cash flow. To rightfully use the money from the customer your accounting department must first validate and associate the payment to the invoice. The quicker payments are matched to invoices, the faster your company can use the funds for other expenses giving your business more agility in uncertain times.
4. Reduce Operating Costs
Due to the excessive amount of time it takes your accounting team to correctly match payments to invoices, the cost of manually processing invoices is significant. Not to mention if an error is made,the length of time it takes to correct this mistake raises costs substantially.
5. Greater Visibility
Automating your AR processes with a solution that is built directly into your ERP, like SK Global’s AR Cash Application module, makes it easy for your business to maintain accurate records of your financial affairs in real-time. Posting on-time and precise cash statements will give your financial executives improved visibility on cash inflows.
6. Ability to Scale as your Business Grows
Manually matching payments to invoices prohibits your company’s growth. Your business may be able to get away with manual cash application now, but as you grow so will your sales volume. Naturally, an increase in sales will cause the number of invoices you receive to rise. Manually matching high volumes of payments to invoices will be increasingly more expensive as your organization develops. For these reasons, it is important to implement an automated solution that is designed to grow with your business.
7. Better Customer Service
If you are receiving customer complaints about mistakes in your cash application procedures, the time for your business to upgrade to a more efficient automated process is overdue. Common payment mistakes like missing discounts or invoicing a customer who has already paid can decrease customer satisfaction and damage your business’s reputation.
8. Centralized Financial Processes within your ERP
Our AR Cash Application module is built-into your Microsoft Dynamics 365 environment, keeping all your accounts receivable data in one centralized system. Consolidating your banking and treasury functions into one platform keeps your accounting and finance teams better informed and organized.
9. Increased Support for your Finance Team
Providing your accounting department with the tools to effortlessly match payments to the correct customer invoices will allow them to focus on more value-added activities. In an article from Business Insider, 49% of office employees reported that they were unable to leave the workplace on time because of the hassle of everyday administrative tasks. Redundant manual entry tasks, like AR payment matching, lead to wasted employee hours and can be easily substituted for more efficient automated options.
10. More Secure
A secure built-in solution like SK Global’s significantly reduces the risk of internal check fraud. Through decreasing the amount of staff exposed to payment information, automating your cash application process heightens security.
Fully Automate your AR Processes within Microsoft Dynamics 365
Through robust technology embedded into Microsoft Dynamics 365 Finance and Operations, our AR Cash Application module requires zero additional data entry to match payments or process direct debit file transmission to the bank. Additionally, your business can automatically import payment files from any number of banks and bank accounts. Our module will seamlessly process, map, and apply incoming payments to the correct customer invoice all within your D365 environment.
We guarantee the coverage of any bank, and any bank specific file format, required to automate your accounts receivable process. Our solution also includes ongoing maintenance across any bank integration type such as BAI2, EDI820, NAI, Symcor, and many more.
For more information on how our AR Cash Application Solution can help your business, contact us today.