This article explains the critical difference between basic automation and true AI-powered solutions, and how the right technology delivers industry-leading straight-through processing that transforms your AR function.
This post was originally published in July 2023 and was updated in July 2025 with additional information on automated cash application benefits, AI-powered features, and ROI measurement.
What is automated cash application software?
Automated cash application software streamlines your accounts receivable process by automatically matching customer payments to outstanding invoices. This technology eliminates time-consuming manual reconciliation tasks, allowing your AR team to focus on strategic initiatives that drive business growth.
While basic automated cash application features rely on rigid, rule-based matching that requires constant programming updates, advanced solutions leverage artificial intelligence and machine learning to deliver superior accuracy and efficiency. For finance leaders managing complex payment scenarios—from decoupled remittances to non-standard customer payment patterns—understanding these distinctions is crucial for selecting automated cash application software that truly accelerates cash flow and reduces operational costs.
Read our blog → 8 ways to turn cash application into a competitive advantage
Why traditional automated cash application falls short
According to recent research, AR teams typically dedicate almost a quarter (22%) of their time to manual cash application, making it the most time-consuming activity within the order-to-cash cycle. While basic automation was a step forward, its limitations are now a significant drag on efficiency.
The limits of rule-based automation
Traditional automated cash application relies on a rigid set of “if-then” rules. This approach is brittle and expensive:
- Constant Maintenance: When a customer changes their remittance format or you update your invoice structure, a developer must manually reprogram the rules.
- High Costs: These programming updates are slow and expensive, costing thousands in annual maintenance fees.
- It Fails Often: It cannot handle common exceptions, such as decoupled remittances or non-standard payment patterns, forcing your team to step in manually.
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How Billtrust’s automated cash application works differently
True AI-powered systems, like Billtrust Cash Application, use advanced machine learning models. Instead of following static rules, our solution learns from your specific data and customer behaviors.
Our custom machine learning model:
- Learns from your unique invoice structure and adapts to any changes.
- Is trained with your open balance data to understand your business context.
- Masters your customer’s unique remittances and buyer patterns, even non-standard remittance information.
- Improves automatically, handling new exceptions without costly programming.
This tailored approach allows the system to master not just your ERP, but the unique way you use your ERP.
A tailored cash application experience
Proactively modeling from remittances and data, trends are identified earlier, resulting in industry-leading straight-through processing rates that improve over time as they learn from your behavior. Higher match rates allow your team to get through their worklist efficiently with fewer exceptions—meaning faster access to cash.
Billtrust Cash Application delivers a tailored cash application experience based on how your team works with your systems and data and provides the flexibility and accuracy that unique processes demand.
For too long, manual cash application has threatened to minimize AR’s value. With AI, though, you’re able to apply cash much faster and ultimately build your organization’s resilience against any economic challenges that come your way.
Benefits of AI-powered automated cash application
Finance leaders who implement advanced automated cash application solutions see immediate, measurable improvements across their entire accounts receivable operation. Here are the key advantages that set AI-powered systems apart:
Transform customer relationships through faster service
When your automated cash application software resolves payment inquiries instantly rather than requiring manual research, your customers experience faster responses to account questions. This improved service quality strengthens business relationships and reduces the burden on your customer service team.
Improve cash flow and forecasting
When cash is applied instantly and accurately, you reduce Days Sales Outstanding (DSO). The predictive insights from an AI system also provide a clearer view of payment timing, leading to more reliable cash flow forecasting and smarter strategic decisions.
Future-proof your AR operations with continuous learning
Unlike static rule-based systems, AI-powered automated cash application continuously improves without requiring IT intervention or additional programming costs. It adapts to new payment methods and customer behaviors automatically, making it a sound long-term investment that grows more efficient over time.
Download our solution guide → Cash application: Maximize straight-through processing
How Billtrust’s machine learning algorithm works
1. Electronic data extraction
AI extracts data from large files in seconds with no human intervention.
2. Precise character matching
Cash Application matches remits to invoices from Open AR data by character matching.
3. Match rate improves over time
Cash Application learns your unique invoice structure and automatically drops junk data. The custom machine learning model is optimized all the time for your business.
Maximizing ROI with advanced automated cash application
Finance leaders need concrete data to justify their automated cash application investment to executive stakeholders. Traditional systems deliver basic processing improvements, but AI-powered solutions provide measurable value across multiple AR performance areas that directly impact your bottom line.
The process begins with intelligent data extraction, followed by confidence-based matching that learns from your team’s actions. As the system processes more payments, the custom machine learning model continuously optimizes itself for your business. This leads to clear gains in key performance metrics. Organizations using this technology typically see processing improvements of up to 40 exceptions per hour compared to manual methods.
ROI indicators that matter most to CFOs:
- Reduction in Days Sales Outstanding (DSO) and faster cash flow realization.
- Decreased manual processing costs and staff time allocation improvements.
- Enhanced cash flow forecasting accuracy for better financial planning.
- Reduced customer service inquiries due to faster payment processing.
- Lower IT maintenance costs compared to rule-based systems requiring programming updates.
Planning for the future of AR automation
The automated cash application technology continues advancing toward more sophisticated AI capabilities. Finance teams benefit from selecting solutions that offer continuous learning rather than static systems that create ongoing programming expenses.
Cloud-based automated cash application platforms provide scalability for growing businesses, while advanced analytics capabilities enable proactive cash flow management. These insights support financial planning decisions that help organizations stay competitive in their markets.
Modern AI-powered systems adapt to new payment methods and customer behaviors without requiring IT intervention, making them a sound long-term investment for finance operations focused on sustainable growth.
Transform your cash application process with Billtrust
Finance leaders are moving beyond manual payment matching and rule-based systems that drain IT budgets and limit potential. The future of AR is not just about automation; it’s about intelligent automation that adapts, learns, and delivers compounding value.
Billtrust Cash Application uses confidence-based AI to automate payment reconciliation while continuously learning from your unique business patterns. Organizations choose our solution to reduce DSO, eliminate costly programming updates, and achieve industry-leading straight-through processing rates.
Download our eBook The Cash Application Advantage to discover how automation and AI eliminate manual cash application headaches, and learn strategies to improve match rates and accelerate cash flow.
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Frequently asked questions
Check out the FAQs for general questions. Find helpful answers quickly to get the information you need.
Can you automate cash application?
Yes, cash application can be fully automated using AI and machine learning technologies. However, not all automation delivers the same results—confidence-based systems that learn your payment patterns perform significantly better than rule-based systems that require expensive programming maintenance.
How does automated cash application reduce DSO?
Automated cash application accelerates your cash flow by instantly applying payments to open invoices without manual intervention. This speeds up your entire order-to-cash cycle, reducing Days Sales Outstanding (DSO) and giving you faster access to working capital for strategic investments.
