The Perks of Automating

Blog | February 20, 2014

Reading time: 3 min

Chief Financial Officers (CFOs) are starting to realize the benefits of automating their company's cash application process. Beyond experiencing cost savings, these organizations are also enjoying Day Sales Outstanding (DSO) reduction, improved exception handling, more focused team and scalability. Read on to learn the perks of automating.

Seeing beyond credit and collections

To achieve a best-in-class cash application process, take advantage of the perks of automating that are available today.

For instance, instead of using desktop scanners to scan checks at various branch locations, all of that data can be electronically transmitted, paired with remittance documents, and matched to your open invoice file by 9:00 a.m. each morning. Automation also eliminates bank fees associated with lockbox data entry and reducing your teams' time spent managing cash application exceptions and mismatched payments.

Automation also boasts an 80-90% match rate which minimizes the time spent managing exceptions and applying cash appropriately to customer invoices. Buyers receive up-to-date statements, reflecting all of their payments without having to prove that a check cleared four days prior.

Reaping benefits of DSO Improvement

According to Book of Numbers™ research from The Hackett Group, (NASDAQ: ANSR), a typical $10 billion company can generate more than $35.8 million/year in bottom-line savings by achieving world-class DSO performance.

By automatically matching payments to open invoices, you increase the performance of your cash management system. Once you've removed the unapplied cash and subsequent adjustments from the process, your cash collection timing will improve, your DSO will decrease, and your cash availability will improve.

For example, by using Billtrust's Cash App Connect capabilities, Crop Production Services, a leading North American full-service agricultural retailer, increased their cash availability by more than $3.5 million through reducing DSO. It also saved on lockbox and courier fees.

Exception Handling

Although 100% match rates is the goal, even the best systems will require staff to manage payments that are challenging to auto match

Having a user friendly portal that applies logic to support this process can save a company significant time and resources. Be sure to do a thorough review of the solution a vendor offer to solve this important challenge.


In a modern business, nothing stays the same for long. Businesses have new customers come on board, customers make changes to their payments preference or payment format, and organizations grow through acquisition. A cash application partner needs to be nimble enough to keep up with ongoing changes.

Look for a cash application provider that offers a fully hosted solution and is not reliant on IT updates every time a change occurs. There is a difference between providers that can integrate with an ERP versus one that is writing code to update an ERP for changes.

Adding new customers should take seconds for your cash application team without any need for professional services or additional costs.

Hackett Finance Practice Managing Director Mark Krueger notes, "The message for typical CFOs is both clear and disturbing. To survive, they cannot wait any longer to close efficiency gaps and implement effectiveness-increasing strategies. Because every day they wait they're leaving opportunities on the table which can have a material impact on their company's profitability."