Cash Application Automation

Cash Application Automation uses software to automatically match customer payments—such as ACH, wires, checks, cards, and lockbox deposits—to open invoices in accounts receivable. By doing so, it streamlines the process and reduces the need for manual effort. Beyond that, it boosts accuracy, accelerates payment processing, and enables scalable, reliable cash application operations.

The system uses invoice references, payment amounts, customer identifiers, and remittance data to apply payments directly in ERP or accounting systems. Transactions that cannot be matched—such as partial payments, short payments, or missing remittance information—are flagged as exceptions for manual review. This allows teams to address them promptly, maintaining accuracy and completeness in accounts receivable.

This automated process reduces errors, minimizes manual effort, improves cash visibility, accelerates reconciliation, and helps lower Days Sales Outstanding.

Cashbook’s Cash Application solution improves traditional automation by centralizing and streamlining the accounts receivable process with ERP and bank integrations. It automatically imports customer master data, AR invoices, exchange rates, and bank statements. Additionally, the system reads electronic remittances from emails and various file formats, including Excel, PDF, and EDI.

Using flexible, configurable matching algorithms, Cashbook auto-matches up to 95% of incoming payments to open invoices and bank records. It automates coding and posting directly in the ERP system. The system flags exceptions—such as short payments, deductions, or unmatched remittances—for quick and efficient review. Full audit trails and real-time cash visibility improve financial control and reduce Days Sales Outstanding.

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Cash application automation leverages rules-based matching, machine learning, OCR, and bank and ERP integrations to identify and apply payments efficiently. The system continuously learns from historical payment patterns and remittance behavior, improving match accuracy over time. As match rates increase, teams spend less time on manual intervention, allowing them to process payments faster and run cash application operations more consistently and at scale.

By automating the cash application process, businesses benefit from faster cash posting, improved cash flow visibility, fewer errors, and reduced manual effort.

Moreover, it helps lower Days Sales Outstanding (DSO) while simultaneously accelerating reconciliation. In addition, it delivers more accurate, real-time accounts receivable reporting, which is particularly valuable for companies with high payment volumes or complex payment environments. As a result, businesses can improve cash flow management, enhance operational efficiency, and ultimately make more informed financial decisions.

Cash application automation addresses challenges like high payment volumes, multiple payment methods, missing remittance information, and partial payments. By automatically processing routine transactions and flagging exceptions, it reduces revenue recognition delays and frees finance teams for strategic work.