The Role of AI in Cash Application

Artificial intelligence is now an integral part of what makes accounts receivable software work and cash application solutions in particular. A/R departments often turn to cash application software at a point when they see a need to replace manual processes with automated ones and realize they are using their talent to complete mundane tasks or spending valuable resources on identifying manual errors that result in payment processing delays.

The Significance of Autonomous Cash Application Solutions

The traditional cash application process cycle is a cumbersome process that involves many manual steps that leave room for significant human error. It has also become more complicated as globalization, cross-border payments, and increase in the number of payment methods and channels have made it more challenging for organizations to match payments to invoices.

As a result, companies that implement this process manually allocate time and resources to verify the reliability and accuracy at each step.

Cash application automation eliminates the need to manually match, check and verify at each step of the process, improving efficiency and accuracy and enabling businesses to more easily scale their accounts receivables operations. This can offer your business a significant competitive advantage, especially as it receives payment confirmation in real time, and has the potential to reduce write offs and reduce disputes. In addition, a more productive and accurate cash application process can help your A/R team become more productive by reducing errors, getting more done, and concentrating on high-impact strategic tasks.

The Benefits of AI in Cash Application

To automate the cash application process, many businesses turn to cash application software, which focus specifically on improving and streamlining cash application. Those looking for a more holistic solution that manages additional aspects of accounts receivable may instead consider reviewing accounts receivable automation software that includes cash application solutions with AI as part of its offering.

Regardless of the choice in technology, businesses benefit from:

• Automated payment matching. AI-driven algorithms ensure that the correct invoice is matching to the corresponding payment –  even when automated cash information is  missing or incorrect. This can be applied at different levels to manual, semi-automatic and automatic payments.
• Reduced operational costs. By automating the many steps required in the manual cash application, you reduce the resources needed to verify each step and identify and fix any errors. You can then allocate those resources towards other tasks that provide more value.
• Improved customer satisfaction. Automated matching of payments and the elimination of human error means less potential for disputes, resulting in faster payment processing.
• Adaptation to changing business needs. Since it can handle larger volumes of data than a manual team at any given point, AI can help you scale your cash application and business as a whole. It also uses the data to continuously improve over time, so that it easily integrates new practices into its processes without the need for traditional manual reconfiguration which leads to errors and inefficiencies.
• Access to real-time processing of data. Having real-time processing of your payments processing enables more accurate accounts receivable records without the need to rely on manual efforts. It also makes it much easier to scale your cash application process.

How Businesses Leverage AI for Cash Application

In light of the evolving payments landscape and challenges of the traditional cash application process, businesses have turned to AI to streamline the cash application process.

Use cases include:

• Real-time processing. Organizations use AI to process payments in real-time, resulting in quicker reconciliation, more accurate financial records, and an improved cash flow. More accurate financial records also lead to businesses proactively managing their cash flow and other enhanced decision making.
• Robotic Process Automation (RPA). Organizations also use RPA in accounts receivable along with AI to automate repetitive tasks and work to handle exceptions and complex payments. In some cases, it even applied new business rules to update their accounting systems.
• Automated data extraction. AI helps automate the process of finding information from different forms of remittance and payment formats, significantly reducing reliance on manual data entry and minimizing errors.
• Predictive Matching. Organizations can use AI to accurately predict which payments match the corresponding invoices and forecast payment patterns. This speeds up the cash application process, whereas in the past, verifying discrepancies or missing information using manual processes would slow the payment process down significantly.

How Gaviti Helps You Automate Your Cash Application

Gaviti’s invoice-to-cash A/R management and automation platform streamlines and optimizes the A/R process along the entire lifecycle. Its comprehensive solution includes customer invoice distribution, disputes and deduction management, credit monitoring and management, and cash application.

The cash application module includes:

• Automated payment matching. Automate the process of matching customer payments with corresponding open invoices. Leverage remittance information provided by customers to intelligently identify and match payments to the appropriate invoices. Since 95% of payments are matched automatically, all you’ll have to do is approve the match.
• Automatic cash application via the payment portal. Match customer payments to invoices with 100% accuracy when your payer attributes the payment to the corresponding invoice using Gaviti’s Self-Service Payer Portal. This accelerates the payment process while saving time and reducing human error.
• Remittance-based matching. Ensure accurate payment matching and payment reconciliation with the use of remittance information such as invoice numbers and payment references. At the same time, you’ll also gain improved visibility into your cash position.

• Single and multi-bank connectivity. Get automation and reconciliation capabilities from both multiple banks and match payments to any of them. This allows you to consolidate collections data and streamline A/R processes, regardless of the number of currencies and banks your company uses.
• Real-time visibility and reporting. Gain real-time visibility into the status of unpaid, unmatched and applied invoices and how they impact your A/R performance. Apply insights from these data reports to optimize collections strategies, reduce DSO, and improve your cash flow.

Want to learn more about Gaviti’s AI-driven algorithms for accurate payment matching? Speak to a specialist today!

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