September 26th, 2016

5 Cash Application Goals You Won’t Achieve Without Lockbox Automation

For many businesses, lockboxes offer a substantial benefit for cash management, often freeing up internal resources and providing faster access to customer payments. While this bank-managed service offers great improvements to the in-house and manual methods of processing remittances, new cash management automation technology enables even faster processing, with greater accuracy and dramatically increased time savings.

In particular, there are five important goals for cash management that simply cannot be achieved without leveraging a lockbox automation solution.

1. Increase hit rates at a reasonable cost

A hit rate of 60% is considered high for most organisations using a lockbox. That means at least 40% of the keying services you pay for are incorrect and need to be manually completed  by internal resources.

The lockbox automation solutions from Cashbook use a combination of advanced algorithms to automatically match remittances based on invoice or sales order numbers, as applicable to your organisation. Such advanced automation enables major international organisations like Exide Technologies Ltd. to achieve consistently high hit rates against open AR data.

2. Speed up processing times

Automation technology like the OCR Lockbox Module from Cashbook features advanced intelligence that can recognise patterned behaviour and decrease the time it takes to process regular remittances. For example, when the module scans checks and remittance slips to link the information with the BAI2 file of your bank, the software creates image recognition by customers and stores the image patterns according to the customer.

The Cashbook lockbox software solution quickly learns over time how to handle the types of remittances received and to manage them automatically according to your specifications.

3. Achieve greater accuracy of transactions

Banks will issue fees for incorrectly keyed transactions just as they do for correctly keyed transactions. Therefore any errors not only incur the cost of the time and resources to fix them but additional bank fees too.

The Cashbook lockbox software solution delivers greater accuracy by reducing manual entry and automating the matching, recording and storing of remittance images and information, while also providing higher hit rates and greater confidence in your data.

4. Manage exceptions more efficiently

Without embracing lockbox automation software, organisations will struggle not only to manage exceptions, but identify them. When Exide Technologies adopted the Cashbook automated lockbox solution, they set up matching rules, algorithms and scheduled jobs to suit their unique cash application requirements.

As a scheduled overnight job, Cashbook automatically takes the lockbox file from Exide’s bank and runs it through the customised upload process, matching received payments with open invoices.

When Exide employees begin work the next day, they only need to address the remaining exceptions, which are now easier to work on because of the clear records created by Cashbook.

 5. Improve records for easier auditing

Traditional lockbox services rely on lengthy spreadsheet files and manual entry.  This is an error prone and time-consuming process which is also difficult to analyse and  audits.

Automated services like the Cashbook lockbox remittance automation solution create streamlined, centrally located databases that can be accessed by multiple people and analysed by various criteria, effectively addressing any challenges to providing information needed for audits.

What level of lockbox automation can your organisation achieve?

Whether your customers are domestic, international or multinational, lockbox automation software can improve the efficiency, accuracy and speed of your cash management. Using the automated lockbox solution from Cashbook, Exide Technologies are benefitting from over 99% reconciliation automation, 95% invoice automation in North America and up to 85% invoice automation for European MT940.

Request a demo to discover how your organisation can achieve their cash application goals with Cashbook.

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